It's been an interesting week or so in economics for the U.S. As most expected, the debt ceiling crisis was averted, but the politicians still managed to freak out some of the markets, at least a little bit, before they got it done. The federal jobs report came in and reported there were more new jobs than expected, and higher unemployment than expected. The Fed hinted they may skip raising the fed interest rate in June. The stock market was up, and bonds were down.
Why do we care? Because it affects mortgage rates and, according to lenders we work with, rates dropped slightly toward the end of the week. Yay!
Taken together, those things affect consumer confidence. And since Maui's economic lifeblood depends on consumers confidently coming to Maui and consuming, it's important, or certainly should be, to anyone who owns a business, is employed, or collects taxes here on Maui.
And how's that working out right now? Well, the most recent information we have is the visitor spending data from April. Maui Now reported that visitor spending in April was up 36% over the same period back in the "normal" days of 2019. Interestingly, kind of like that confusing jobs report, the number of visitors to Maui in April this year was down compared to 2019, but they spent more.
I'm pretty sure a lot of those visitors, as well as a lot of folks who live here full time, would like to be spending money on Maui real estate. However, the new supply is not keeping up with demand. So...let's do the numbers.
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere from 20 to 8 weeks before closing.
The number of homes sold in May rose nicely to 74 closed sales. That is the highest number of sales closed in a single month this year. Given the other data, that's a little confusing. Home inventory, homes available for sale, has steadily declined since January. During the same period, pending sales, homes going under contract, have increased. It's kind of like the jobs report, confusing.
Condo sales were flat month over month. With inventory holding steady in the 2-month range, keeping sales in the high eighties is amazing and demonstrates how strong the Maui market for condos is, particularly vacation rentable condos. From a buyer's perspective, it seems like there is "nothing" for sale, but the actual number of sales tells a different story. Condos come on the market for sale and get sold quickly.
Inventory tells show many units are available for sale in each category.
Inventory may not be the whole story, but it plays a huge role. The number of homes for sale has declined every month this year. In May, homes for sale dropped another 3%. That drop, along with increased sales, pushed our months of inventory back down to just 3 months. What is inexplicable is that pending sales for homes have risen fairly consistently this year from 103 in January to 135 in May, the highest number this year. That means that the number of homes that actually close in June should remain near that high May level.
Condo inventory actually had a little bit of a bump, rising 4% and giving us 200 condos for sale. With pending sales also rising slightly, we could see the current level of sales remain steady for another couple of months.
With 200 condos on the market, there actually is something for sale, but with 88 or 89 sales per month you can see that condos are selling quickly when they hit the market. That is consistent with last month's comment that condo sales will likely begin to slow down in late summer or early fall, unless we see more inventory come to market.
A couple of Aloha Group Maui's current 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 or very low priced sales.
Selling prices are not confusing. Given the high number of sales to the inventory level you would expect that prices would continue to increase, and you wouldn't be wrong. The average selling price for a single family home grew 19% over April's price and topped the $2 million mark for the second time this year.
The median selling price climbed 14% to $1,271,500. That is a new record high median price for Maui and could hold at that level for a while. The median asking price for the current 137 homes under contract, pending, is $1,273,000. Those are the homes that will be closing in the next couple of months. Also, the median asking price for a home on Maui is just under $2.2 million, and there are only 55 homes for sale priced at $1.75 million or lower.
While condo sales and prices remain strong, they did not set new records for selling prices. The average selling price for a condo dropped 11% to $982,904, dipping below $1 million for the first time this year.
The median selling price was also down by 5% to $835,000. However, since condos under contract that will be closing in the next couple of months have a median price of $1.4M it is reaonsalbe to expect that the median selling price will continue to rise in upcoming months.
We are happy to announce that we are returning to presenting our Real Estate Planning Seminars. In addition to Building Wealth and Creating a Legacy through 1031 Exchanges, we have added Senior Living Options, Planning for the Future and Beyond and, later this year, we plan to add a seminar for Trustees. We plan to make these or portions of them available online for those won can't make it to the live seminar. For more information, go to the Real Estate Planner tab on our website.
Save the date! Our next in-person 1031 Exchange Seminar will be held Thursday, August 10, we will provide more information on location and time as the date gets closer. If you would like to learn about a 1031 Exchange now, see below to watch a previously recorded version of our seminar.
If you have any questions about what is happening on Maui or any real estate questions, 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 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.