Summer is in full swing on Maui, kids have been out of school long enough to get bored and parents to get a little crazy! Beach parking lots are packed, and if youʻre lucky enough to find a spot for you car, you might be out of luck for a place to relax. Itʻs not often that Maui beaches are reminiscent of a busy California beach, but a nice day in July would be the time. However, the water is still sparkling, and the palm trees are still swaying, so it is still paradise.
Interestingly though, both May and June reported lower visitor numbers to the island. While that certainly had an effect on the lodging industry, spending everywhere else was up, which is made apparent when you're trying to get a reservation at your favorite restaurant! July has seemed busier, but if you're wanting a quick get-away, there are deals to be had, both on airlines and lodging.
The weather has been hovering around 85 degrees and the trade winds have been gently blowing most of the month. Hurricane Calvin passed through, but all we got was a bit of rain and wind.
We know the temperature on Maui is hot, but how is the real estate market. Summer is typically a hotter time for the real estate market. Things are a bit cooler this year with the low inventory and higher borrowing costs. Fed Chair Powell, along with some other powerful financiers, is continuing to increase interest rates, which in turn kicks up mortgage rates. So it has stalled some buyers and sellers. How is that affecting the Maui real estate market? Let's do the numbers.
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere from 2 to 8 weeks before closing.
According to the National Association of REALTORS® home sales were down 20% nationally from June 2022 to June 2023. On Maui the number is a little bit higher.
From January to June of 2022 there were 568 closed home sales on Maui, and from January to June 2023 the number dropped to 374, which is about a 34% decrease.
From January to June 2022 there were 973 closed condo sales, and from January to June 2023 the condo sales dropped to 506, which is about a 47% decrease.
Another way to look at this is that home sales have dropped by one-third and condo sales are off by half. That sounds devastating to the real estate market.
What that shows is the same old story of low inventory. The Maui market has remained strong despite the rising interest rates, but what is selling is a reflection of what is available. And condos, at certain price points, continue to sell as soon as they are listed.
Inventory tells us how many units are available for sale in each category.
June 2022 showed 2.9 months of homes inventory; compared to June 2023, there is 3.7 months of inventory. That sounds like good news for inventory, but when you look at the actual numbers, you see that June has the second lowest number of homes for sale of any month so far this year.
Condo inventory is reflecting a similar illusion. Last June we had enough condo inventory for 1.6 months and we have almost doubled that at 2.8 months of inventory. However, last June there were 150 condo sales, and this June there were only 90 sales. So even through there is more inventory coming to the market, it isn't lasting long, particularly for vacation rentable condos. It is still challenging for prospective buyers to find that perfect property.
One of Aloha Group Maui's pending sales.
SELLING PRICES: average and median sold price
We look at Average and Median prices in all categories. A lot of people like to know the average price; however, we tend to use median for most of our analysis, because the median is less likely to be skewed by outliers of a few very high priced or very low-priced sales.
There have been some discouraging trends nationally with home values; according to the National Association of REALTORS® the median home sales price in May was down 3.1% from a year ago, and that was the fourth consecutive month of declining home prices year-over-year.
We have not seen that on Maui, and the median home sales prices have remained fairly steady. In fact there was a continued increase in home prices across the various neighborhoods on Maui. The low inventory and high demand from both residents and out-of-state buyers contributed to the slight increase. We are still seeing multiple offers and strong sales prices, particularly with condos.
Vacation rental properties are the most sought after property on Maui, and as mentioned, they are sold nearly as soon as they hit the market.
We have a FREE 1031 Exchange seminar on August 10 at the Kahului branch of the American Savings Bank. It starts at 6 pm, and dinner will be served. We will be discussing how to grow your real estate investments through a 1031 exchange, and the American Savings Bank team will provide some insight into loans for investments and how you can use your equity in your home to invest in other properties. Space is limited, so register through our website today. We hope to see your there!
If you would like to learn about a 1031 Exchange now, click here to watch a previously recorded version of our seminar.
If you have any questions about what is happening on Maui or any real estate, we'd love to hear from you.
A Hui Hou!
Get more information and details
To get more information on property and trends, you can search all properties listed for sale at www.AlohaGroupMaui.com. If you can’t find what you’re looking for there, send us an email to email@example.com, and we’ll do our best to get an answer for you. As we get more requests for information, we’ll add new sections to the website, newsletter or both.
About Aloha Group Maui
Aloha Group Maui was founded by L. Lee Potts, MBA, REALTOR® R(B) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA. Our team consists of talented professionals; Cheri Miller R(S), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S), Sarah Twitchell R(S), and Tony Brown R(B). We are businesspeople, and we treat our clients with the same care and service attitude that we would like to receive when we do business. We are in business for pleasure and profit. We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit). Real estate can be highly speculative, and profits are never guaranteed. So if you are buying property in Maui, it’s a good idea to surround yourself with a professional team.
Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization. Lee and Barbara are both licensed under Keller Williams Realty Maui.
Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz). She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.
Copyright 2023 L. Lee Potts
Statistical information in this newsletter is based on actual sales information reported to the Realtors Association of Maui, Inc. While this information is deemed reliable, it is not guaranteed. This newsletter is for informational purposes only and not intended as advice for investment or any other purposes. Real estate is considered to be highly volatile, and purchasers and sellers of real estate should always seek expert outside advice before investing.