Aloha From Lahaina Lee

Maui Real Estate Advisor - September 2024 Edition

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What's on Everyone's Mind Right Now?

The Economy.

Right now, the biggest topic across the country, as always, is the economy. Whether you think we are in a recession or not, you're probably right!

Most economists say we're not in recession, but here on Maui, it's a different story. Tourism drives our local economy, and if you've been following the numbers, you'll know that our county is feeling the pinch.

According to the Department of Business, Economic Development & Tourism (DBEDT), visitors to Maui in July 2024 were down 20.1% compared to July 2023 and 23% compared to 2019. Daily visitor counts were also down by 21% in July compared to the previous year. It's no surprise that people are feeling the effects.

On our last trip to Costco for gas, we didn't even have to wait in line at the pump. We just drove right up to fill 'er up. That makes it official - Maui is in a recession.

The sunset is even pretty from the Costco gas line!

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How Does This Impact Real Estate?

The proposed bill to roll back the right to rent 7,000+ short-term condos has many sellers and buyers nervous. Most realtors, especially in West Maui and South Maui, have received THE call from anxious property owners asking if they should sell. But there's no one-size-fits-all answer. The uncertainty in the market is making both buyers and sellers hesitant about making decisions.

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Let's Talk Numbers: Condo Sales

Looking back over the last six months, condo sales have stayed relatively consistent, ranging from 64 to 75 units sold each month. However, the pending sales (properties under contract that will close soon) are telling a different story. We're seeing a slow decline in pending sales, which should eventually be reflected in the sold numbers. But there's an interesting twist - recently closed sales from high-end luxury condos that have been under contract for years are skewing the numbers.

If we exclude these high end condos as outliers, there were only 49 condo sales that were created in this market and closed in August. That brings us down to levels not seen since the 2008 recession.

Inventory or supply, is rising quickly in the other direction, from 473 condos for sale in March to 743 by the end of August. Demand is dropping faster than the sales numbers reflect, while supply continues to rise. 

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Single-Family Homes: Buyers vs. Sellers Market

I've heard a lot of people say that it is a buyers' market for single-family homes on Maui. However, if we look at supply and demand, the sold and the inventory lines, we have almost exactly 6 months of inventory. That is the definition of a balanced market according to the National Association of Realtors.

The number of sales over the last six months has been fairly steady. If we take out July, the number of sales has ranged between the mid 60s and the mid 70s for six months.

Looking down at the pending line, we can see that inventory peaked back in April with 147 sales and has dropped every month since. That certainly indicates that sales in the upcoming months may also decline.

The question mark comes with the inventory. Since April, inventory has increased every month, winding up at 344 homes for sale at the end of August. 

What we can see if we dig deeper into the numbers is that we have a buyers' market in the two most expensive areas on the island, and a sellers' market in the 2 most 'Maui' affordable parts of the island.

The median asking price for a home in South Maui - Kihei and Wailea, is just over $2.1 million. The median asking price in West Maui - Kaanapali through Kapalua, is $5.75 million. In both those areas supply is in abundance.

In Central Maui and Upcountry, we see prices are a bit more affordable at $1.375 million and $1.7 million respectively. Those are both sellers markets with each having, give or take, three months of inventory.

The median selling price on Maui has stayed right about $1.3 million. That is out of reach of most Maui residents. The average selling price over the last six months is interesting in that it has, for the most part stayed below $2 million. That indicates that luxury buyers, those buying homes for $4 million and above, are sitting on the sidelines. What are they waiting for? 

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Looking Ahead: Optimism on the Horizon

While things may seem tough right now, I'm optimistic about what's to come. All the factors that have hurt our economy are coming to a head in the next few months. My crystal ball tells me the worst of this downturn will last no longer than 60 to 90 days, and after that, we'll start seeing an upswing.

For buyers, the next couple of months might be your best opportunity to get into the market before things start picking up again. And for sellers, if you don't have an urgent need to sell, now might be a good time to hold steady.

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That's all for this edition of the Maui Real Estate Advisor. If you have any questions or comments, let us know! 

4087 N Paua Way is located in one of the best spots on West Maui ocean and outer island views.

Nestled just a few feet above the quiet community pool and clubhouse in the gated community of Kapalani Estates, this split-level 5 bed, 3 bath home has 2,502 square feet of beautiful bright open spaces.

The home has gorgeous tiger wood flooring and open beam ceilings creating a warm and modern feel. The large kitchen is equipped with an ocean view, granite countertops, state of the art stainless steel appliances, and plenty of storage. It opens to a spacious great room with room for comfortable seating and a large dining room table.

The focal point of the home, however, is the wrap-around lanai where you can enjoy grilling and eating dinner while watching the brilliant evening sunsets or listening to the birds with your morning coffee. It is the perfect home to entertain family and friends.

The spacious main bedroom opens to the lanai and is en suite, with a luxurious bathroom that features granite countertops and a tiled walk-in shower.

The lower level has an additional 2 bedrooms and 1 bath. There is a large great room with breakfast nook that is ideal for either additional living space or visiting family or friends. It has a separate entrance for more privacy and convenience.

The home has air conditioning, a two-car automated garage system and the added amenities of a community pool, clubhouse and tennis courts. It sits on a huge green space, perfect for any outside game you can dream up. The popular surf spot, S-Turns, is just across the street as well. It is located between Kapalua and Kaanapali, with multiple restaurants, coffee shops, grocery stores and shopping.

Call you favorite Realtor for a showing today!

Cooperating Broker's Agreement is 2.5%

Maui's Short Term Rental Update:

Maui's burning issue and current debate is over whether or not to roll back the law that allows some 7,000+ apartment zoned condominiums to do short term rental. 

For years and years, Maui has had a housing crisis. The crisis was heightened by the Lahaina and Kula fires in August of 2023. In response to outcries for housing, especially in West Maui, the Maui Mayor, put forth a bill to repeal the right of condominiums in apartment zones to do short term housing with the aim of converting those short term rentals into long term rentals or owner occupied condos. 

These condos were in fact purpose built for short term rental, and have always had the right to use their property for vacation rentals. That right was codified into law by an ordinance adopted in 2014 and 2016. 

Earlier this week, the County of Maui planning commission heard testimony from 130 people. Eventually, the planning commission deferred any action and will hear additional testimony now scheduled for July 9. According to estimates, 30-40% were in favor of the bill to roll back the STR's. 60-70% of those testifying opposed to rolling back the STR's.

But even in the polarized atmosphere of those expressing concern that either the continuation or the rollback of these STR's posed an existential threat to them there was one point of agreement.

The agreement is the need for affordable, dignified housing on Maui.

In comments on why we are facing a housing crisis, Mayor Bissen cited, " a myriad of complex issues that have challenged our community for decades." He went on to state "this is a consequence we cannot and should not accept. Our system is long broken and long overdue for change." 

Hallelujah.

For decades, it has been somewhere between very difficult and impossible for builders to build workforce housing. The US Census Bureau noted that housing on Maui was "essentially zero" from 2018 to 2022. 

You can always reach out to us by text or email or drop some comments below. And remember, nobody knows Real Estate on Maui like Aloha Group Maui. ALOOOHA.

Located in Maui Lani, in the desirable neighborhood subdivision, Traditions, 305 Pulihi Street welcomes you in with a beautiful and meticulously furnished home.

This 3 bed, 2.5 bath home has beautiful, modern luxury vinyl flooring throughout for easy care. The immaculate home opens to a thoughtfully designed entryway to keep the clutter of the day contained with built-in shelves. There is additional storage under the stairs, continuing to utilize all the nooks and crannies. You see the care and attention to detail in each piece of furniture selected to highlight the home. With unique touches like the cut koa wood coffee table and the modern breakfast seating nook, this home feels like a luxurious retreat.

The bright and open great room has comfortable seating for movie nights, a dining table for long evenings entertaining and a large kitchen for cooking plenty of holiday meals.

The kitchen is a chef's dream with plenty of storage in the custom cabinetry, lots of counterspace and beautiful updated appliances. There is more seating at the counter for a quick family breakfast, or to linger over a glass of wine with the chef.

Head upstairs to the spacious main room that is en-suite with a large bathroom and a cozy reading nook. The bedroom has a walk-in closet and a view of the spectacular West Maui mountains.

The additional bedrooms have the same bright open feel, and one is set up as a movie room, with soft greys and blues, inviting chairs and more view of the West Maui mountains. The rooms can be used as bedrooms, an office space or an exercise room. Your imagination is your only limit.

The home has a two-car garage with a full-size washer and dryer, built-in overhead storage, air-conditioning and a leased PV system. Conveniently located close to schools, shopping, restaurants, parks and more, this gem won't last long!

Call your favorite Realtor today to schedule a showing!

Aloha, this is Lahaina Lee and this is your Maui real estate advisor May edition.

Well, things have been hot here on Maui, and not to make light of a bad situation, but fire season has officially started here. During the week of May 9, there were several incidents, the largest being a 30 acre burn area near the Veterans Highway, which is the highway from Kahului down to Kihei. Needless to say, high winds and fire make a lot of us very nervous.

The housing situation on Maui is still kind of upside down. The Maui News reported that the non-congregate FEMA sheltering program has been extended to June 10. According to the report about 85% of individuals and families have successfully transitioned out of the program. However, that still leaves about 600 families and more than 1,500 people in the program that have to be transitioned out. 

At about the same time, Civil Beat is reporting that FEMA is still spending millions of dollars on nearly 500 empty condos, apartments, and houses.

There are obviously some serious disconnects here. One big issue for people who lost their homes, but are still staying and working on the Westside, is that potential housing on other parts of the island simply isn't doable for them.

I was talking to a food and beverage manager at one of our Westside restaurants he told me they were losing one of their good employees. This fellow has a low paying job and the only place available for him, that he can afford, is going to be on the south side of the island. Now you, especially those of you who live on the mainland and have a commute, might think commuting form Kihei to Kaanapali doesn't sound like a really big deal. However, if you don't have a car, and you're dependent on Maui's public transportation or riding your scooter back-and-forth over the Pali two times a day, sometimes in the dark, its just not a solution that's going to work. 

In another case, a young woman that we know who works on one of the boats that goes out of Kaanapali found her own housing in Kihei. She had a car and did the commute six days a week. Her gas bill running $150, she was finally fortunate enough to find something on the Westside. 

There have finally been some new housing starts for "affordable" housing. Some of it is making very good headway, but we are clearly on a timeline here.

As a solution to this situation, Maui Mayor Bissen, has announced he is putting a bill that would repeal the right of Minotoya condo owners in both West and South Maui to do short term rental. This proposed bill faces plenty of opposition and even if passed would not begin to go into effect for over a year.

There are so many logical, financial, and certainly, emotional reasons that this will not be a solution. However, we will do a separate podcast on that topic coming to you soon.

In the meantime, how is all this affecting the real estate market on Maui? Well, let's look at the numbers.

In April, home sales remain strong with 69 closings. That's down a little bit from last month, but it is still the second most closings since June of last year.

The inventory of homes for sale remained flat with slightly fewer for sale in April than in March. Hovering at just over 260 homes for sale, that's higher than any other time in the last year, except for March. The stronger inventory level is being supported by new listings. The new listings are up 22.5% in 2024 over the same time in 2023.

That's the good news, and if you are a seller, that is still the good news. For buyers, the months of inventory level is still below four, which keeps us firmly in the seller's market.

After a good increase in March, selling prices remained strong. In April, the average home was selling for over $1.8 million, and the median price was maintaining its level at an even $1.3 million.

To give that a little more statistical context, the median price for the first four months of 2024 is up 13.3% over the same time frame in 2023. Given the current low levels of inventory, I do not see prices easing in the foreseeable future. 

So, what's happening with condos?

Condo sales exceeded 100 units for the first time since August. Sales have been quite strong with more than 90 units selling in each of the last five months, except for February.

It appears that condo sales are being aided by rising inventory. Condominium inventory bottomed out back in August with just over 184 condos for sale. In April, we reached 518 condos for sale, which is an increase of about 260%. New listings are up 40% over the same time last year on a year to date basis. That is a huge injection of inventory. But, with increased sales, we still have under five months of supply.

Even though the market still slightly favors sellers, at least according to rules of thumb, you would think that big jump in inventory would have an impact on selling prices. However, the median price for condos is up 8.4% in April over the same month in 2023. Year to date, through four months, selling prices are up 7.3%. Average selling prices all out of whack due to some rather large closings way down in Makena.

So, despite what we read in the papers, specifically tourism is done, prices are too high, Maui condos are still in high demand and prices have continued to rise. Most of us have been of the opinion that the unfriendly position of the Maui government would have an effect on the value of condos on Maui. Clearly, people are concerned based on public opinion, but that is not being reflected in prices at this point. 

So take that County Council.

That is this months snapshot of real estate on Maui. We will keep you updated on trends and posted on developments here on everyone's favorite island. 

If you have questions or comments, drop them in comment section down below. If you have answers, don't wait. Call me.

We'll see you next month and remember, nobody knows real estate on Maui like Aloha Group Maui. 

From Kihei, this is Lahaina Lee saying ALOOOHA.

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 lee@alohapotts.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.

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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),  Keri Nicholson R(B), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S), Sarah Twitchell R(B), 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 2024 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.  

Aloha, Lahaina Lee here with your Maui real estate advisor report for March 2024. I'm coming to you a little bit late this month because we were on vacation. Where do people from Maui go on vacation you might ask? 

Well, one of our favorite places to go is another tropical island, in this case, we went to the South Pacific and spent time on Maraya and Bebe.

It was great to be there where we connected with some good friends who are also from Lahaina. The water was fun, we had some great food, and enjoyed our friends. But, as Dorothy said, there's no place like home.

And on the Maui front, there is some good news. At a meeting on Tuesday, April 16 there was a Lahaina town update. The good news is that the infrastructure plan is ahead of schedule. We were told that all of the waterlines had water and were pressurized. Not all of the water is potable, so there is still work to be done, but that feels like a great step forward.

We also got an update on the wastewater system and although HECO did not have a representative present, it sounds like they are on or ahead of plans as well. 

It was also announced that a special permitting office for Lahaina will be opened at the end of April An outside contractor is being hired to, hopefully, expedite permits so that people can start building their homes again.

The news was not so good for property owners in the Lahaina historic district or those within an SMA zone. We were hopeful that if someone had a property: a home, a condo complex or commercial building in those districts, that if they were planning on rebuilding exactly what they lost, they would not have to go through the required process. Unfortunately, the representative from the planning department state that both of those processes will be necessary.

Since everyone on the makai side of the highway is in an SMA zone, and my experience with getting an SMA was that it took close to a year to get that through, that could be a major bottleneck and getting Lahainatown starting to rebuild. 

IN the meantime what's happening with real estate on the rest of Maui? Let's look at the numbers. 

In the month of March, we recorded the highest number of sales in over 12 months at 75 homes sold. In fact, that was highest number of sales since November 2022.

With 266 homes currently listed for sale in the Maui MLS, we also have the highest inventory level that we've had in over a year. However, given the current rate of sales that is still only four months of inventory. So, by standard measures, sellers are still firmly in the driver seat when it comes to single-family homes.

What's the reason for rising inventory? It appears to be just normal market activity. There is one new development, Anuhea at Kehalani, bringing some new homes to market, but there aren't a significant number. Also, the median price for new listings in the last 30 days in just under $2 million. The average price is just over 3.5 million.

The median selling price for single-family homes took a pretty significant jump at the first of the year. However, as you can see, they didn't rise in the first quarter. The average selling price seems to be headed back towards $2 million. That could signal a little more activity in the luxury market. 

It is a different story for condos.

After dropping to just 66 sales in September, after the wildfires, sales rose back into the 90s in December, and aside from the dip in February sales, have remained at 90+ sales per month.

Inventory has also been increasing by leaps and bounds. In August of last year, there were only 184 condos for sale. Last month there were 473  condos for sale. At the current rate of sales, we have a perfectly balanced level of inventory at six months. 

Both the median and average sewing prices reported in March are deceiving. A good size condominium complex in Wailea, La Loa, has been closing a number of sales including 12 in March. That doesn't sound like a lot, but it is enough to skew the stats.

Even with that qualification selling prices are generally up and asking prices are following. The median asking price for a condo on Maui is now at $1,150,000 and the average asking price is over $1.7million.

That is this month's snapshot on real estate. We will keep you updated on trends and related stories here on Maui, and of course, we will keep you posted on real estate trends here and the greatest island in the world.

We'll see you next month, and remember, nobody knows real estate on Maui like Aloha Group Maui.

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 lee@alohapotts.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),  Keri Nicholson R(B), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S), Sarah Twitchell R(B), 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.