If you own property on Maui, you should have received your property tax assessment by now. Hopefully, you were sitting down (preferably somewhere like pictured above!) when you opened it. Anyone with even a passing interest in Maui real estate knows that prices have increased dramatically in the past few years. However, you might not have noticed that the assessed values did not increase much. The assessed value of one of my condos increased just 2.2% between 2020 and 2022. The market value was up about 50%.
The good news is that the assessed value is up only, if I can say "only", 31.5% in 2023. But even looking at the situation through rose colored glasses doesn't take the sting out of the chunk you new tax bill will take out of your household budget or the hit on the ROI for you investment properties. Price appreciation has slowed on Maui, as you will see in this report, but don't be surprised if your assessed value increase for next year is in the double digits again.
Interest rates have been a hot topic in real estate since they started escalating at the beginning of 2022 when the rate for a 30-year mortgage was at 3.2% according to Freddie Mac. By November, that rate was over 7%.
However, Sam Khater, Vice President of Freddie Mac said, "Turbulence in the financial markets is putting downward pressure on mortgage rates." That's good news, and rates have been coming down. Last week, according to Freddie, the 30 year fixed rates was 6.28%. Some of our Maui lenders are advertising 6% for conforming loans and 5.5% for Jumbo loans. We are even seeing condo-tel rates under 6% again.
And then there is the banking news, the Fed and an economy that keep sending mixed signals, but we can dig into that another time.
So much for the buzzy picture on the economic trends, what are the real estate trends on Maui?
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere from 2 to 8 weeks before closing.
Home sales rose to their highest level in 6 months with 72 sales. That was a 64% increase in month-over-month sales; however, sales are still down 30% as compared to March of last year. And last month's bump up may just be a blip on the radar. That's because leading indicators on the trend line such as pending sales and inventory both declined or remained flat for the month.
Condo sales had a big month with 119 sales. We haven't seen that many sales in one month since July of 2022. The 119 sales represent an 80% increase over the prior month, but it is still 35% below the same month in 2022. Pending sales for condos dropped significantly. Inventory was flat, and a long as it's not declining, I think we'll take that as a win.
Pending sales represent properties that are under contract but have not yet closed. Pending are the pipeline that tell us how many sales are likely to happen in the next couple of months.
Inventory tells us how many units are available for sale in each category.
The number of homes for sale dropped 6%, compared to the previous month. While 248 homes for sale is the lowest number in the last 6 months, the trend line is fairly flat going all the way back to July. And it's likely to stay that way as only 75 additional homes, new listings, came to market during the month and there were 72 sales. That keeps our monthly supply of inventory at about 3.5, so it is still a seller's market.
Condo inventory remained at 210 condos for sale, the same as last month. There were 107 new listings added to the market, but there were 119 sales. So, unless there are significantly more new listings in April, we are likely to see the inventory get even tighter. With less than 2 months of inventory it is still clearly a seller's market for condos.
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.
The average selling price for a Maui home shot back to almost $2,000,000. According to statistics published by the Realtors Association of Maui, that is up 9% over March of 2022 and 16.7% for 2023 year-to-date over 2022.
The median home selling price rose 11% from last month. It is also up 1.9% from last March. At $1,150,000 the median selling price for 2023 so far this year, is unchanged from 2022.
while both the average and median selling prices for condos were down compared to last month, they are still up for the year-to-date. Three months into 2022, the median selling price was $750,000 compared to $800,000 this year according to the Realtors Association on Maui.
DAYS ON MARKET:
The days on market (DOM) is the number of days a property has been on the market until close of escrow.
Days on market in one trend that seems to be running counter to all of the other trends. The average days on the market for a home to sell jumped 32% for the month form 102 days to 135 days. Part of that increase was due to 6 homes that finally sold after being on the market for more than 340 days. One of those homes has actually been on and off the market since 2004, when it was priced at $20,000,000. It sold in March for $20,750,000.
The days on market for condos to sell was also up, and by a crazy amount. By the count in the MLS the average time on market for a condo to sell was 260 days. What!!! Well, mystery solved. There were several closings at new condo developments that put condos under contract as far back as 2018 that just closed last month. That most definitely skews the average.
It does seem that it is taking longer, especially for single family homes, to sell. I'm hearing the same thing from my fellow brokers. I can tell you that historically we agents can usually feel changes in the market before they show up in the numbers.
The fact is that prices on Maui are continuing to rise. You might wonder what is keeping them on the rise? There are a few key factors. The supply of both condos and homes is so very low, and it is hard to envision that changing anytime soon. The economy remains stubbornly strong despite the Fed's best efforts to slow it down. Buyers seem to have mentally adjusted to today's interest rates. And interest rates don't seem to affect 40%-45% of our buyers, as that is the percentage of buyers for homes and condos respectively who paid cash for their purchase last month.
See you next month.
Its always good to end with a sunset!
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 firstname.lastname@example.org, 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.