The beginning of the New Year brings with it continued and heightened discussions of inventory, interest rates, and a shift in the real estate market. The shift in Maui will be exemplified by fewer sales at the mid and lower price points due to lack of inventory. On a national basis we are also being told there will be a slowdown in the luxury sector. However, given an overabundance of inventory on Maui, creating a buyer's market, and a rumored slowdown, now couldn't be a better time to buy a luxury property on Maui. But, overall, it still looks like a seller's market to me.
Single Family Home Sales declined precipitously in January to the lowest number in the last 2 years. Condo sales remained strong with 130, but it will be difficult to maintain that pace with inventory declining so rapidly.
Pending sales represent properties that are under contract but have not yet closed. They are a key indicator of future sales.
Although pending sales were below 500 units at the end of January, as of this writing, they are over 500 for the first time in 6 months. While that is somewhat heartening, it is still well below the same month a year ago, when pending were just under 600 units, a decline of just under 17%. But with interest rates still at historically low levels, buyers still want to take advantage of rates and get into the market while rates are low.
Inventory tells us how many units are available for sale in each category. Inventory for homes had a modest decline of just under 4%, while condo inventory went the other way with an increase of 5%.
While the overall inventory for homes has actually stayed fairly steady, give or take about 20 units every month for the last year, the inventory for condos is down about 14% over this time last year. And the inventory we have for homes is mostly at the pricier end of the market. Less than 20% of the homes currently listed are priced at or below the median selling price.
Selling Prices: average sold prices
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 median is less likely to be skewed by outliers of a few very high priced or very low priced sales.
It is worth noting that the average selling price for homes seemed to peak back in October at $1,165,670 after a previous high a year ago in February 2018 of $1,212,000. So, maybe there is some softening at the higher price points in the market.
The medial price also had a peak back in October. If we look further back at the numbers from the end of 2017 through early 2018, we see that the median price has continued to trend up while inventory remains steady or slightly down.
Condo prices have been trending up since the beginning of the year. Early last year, 2018, the median selling prices were firmly in the mid-$400s after being as low as $400,000 in November of 2017. However, back in November of 2017 there were 624 condos for sale. Today, there are only 560 and even that is an increase from only 500 in November. Perhaps the higher price points could bring some additional properties to market by sellers looking to case in while the market is still favorable.
Days on Market: (avg-sold listing)
The days on market is the number of days a property has been on the market until close of escrow. That number seems pretty stable. Normal financed sales take 45-60+ days, so on average, homes and condos are on the market up to 100 days before they go into escrow. I believe we are still seeing a downward trend in days on market.
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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. We are business people, 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 on 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 fi you are buying property on Maui, it is 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 with both Steve's were there (Job and Woz). She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.