Aloha, Friends: 2020 is officially in the rear view mirror, but it did not go quietly. The resort we live in the middle of not-usually-windy Lahaina had the roof literally blown off of 2 buildings on the day after Christmas. Large sheets of corrugated steel sailed off the buildings and into the parking lots. Thankfully, no one was injured, but some cars definitely had damage. We lost power for several hours, which is not such a big deal.
The scariest thing during this freak wind storm was a fire that started in Olowalu, south of Lahaina. If you're not familiar with Olowalu, that's where Leoda's Pie Shop is located. After the huge fire just 2 years ago when Hurricane Lane came through, many of us were nervous that another fire, pushed by near hurricane force winds would threaten the nearby West Maui neighborhoods and possibly downtown Lahaina.
According to the Maui News over 500 acres were burned, residents were evacuated, and the highway was closed. Some structures were singed and a community hall/church was destroyed.
On the less dramatic side, we went to Front Street to watch the final sunset of 2020. Front Street itself was busy, but not crowded. People were wearing masks for the most part, but not everyone was. As the sun set, there were bagpipes being played at Fleetwood's across the street from our view point. It was a nice finish to 2020.
And what's happening in real estate? Let's look at the numbers.
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere form 2 t0 8 weeks before closing.
December's sales numbers are simply stunning. There have been over 100 homes sold in 3 of the last 4 months. Given that there are only 278 homes even for sale on the whole island, to squeeze out 101 sales at a median price of $865,000 is hard to imagine. Of the homes currently for sale, only 78 are priced under $1M. We clearly have a shortage of "affordable" housing. There are builders wiling to build, but Maui County Council isn't going to make that easy or perhaps even doable.
Maui's condos sales were doubly stunning. As of January 1, there were 167 sales reported. That number usually goes up a bit due to late reporting. That is 44 more sales, or 26% higher than December 2019. And the median selling price? That's up as well. Many consumers and Realtors, including this broker, expected to see condo sales plunge in 2020, and they did in the spring, but condo sales are back, big time.
Pending sales represent properties that are under contract but have not yet closed. Pendings are the pipeline that tell us how many sales are likely to happen in the next couple of months.
Total pending sales are up to 530. That is up 6% from December of 2019. Only January and February of 2020 had more pending sales. Our pendings started to crash in March, hit bottom in April and have risen ever since.
Pending home sales at 221 is nothing short of amazing given the current inventory of homes for sale. The median asking price for homes under contract is $842,000. There are only 50 active listings on the market at that price or under. What does that tell us about future sales?
The 221 condos sales pending is 19% higher than the pendings in the pre-COVID December of 2019. Pendings fell to just 142 in April, but by June had topped 200 again. Pending sales for the last 4 months have been steadily higher than the last 4 months of 2019.
Inventory tells us how many units are available for sale in each category.
So, what's the downside to all this great sales activity? Well, it's the supply side of supply and demand. We are running out of supply.
When we are selling over 100 homes per month and there are only 278 for sale on all of Maui, Lanai and Molokai, we would completely run out of homes for sale in 3 months if we continue to sell at this rate and no other homes come to market.
The lack of inventory, the demand side of supply and demand, keeps driving prices up. As mentioned earlier, there were only 50 homes priced at or below the median selling price. Of the home actively for sale, homes in the inventory, the median asking price is...are you ready? $2,100,000. I don't see how sales can continue at the current pace.
Condo inventory is up 40%, 195 units, over December of 2019. That sounds likes a lot, and it is. However, at the current sales pace, we could deplete that inventory in just 4 months.
The National Association of Realtors define a "balanced" market to be 6 months of inventory. That means if there is less than 6 months of inventory, it is a sellers' market.
Selling Prices: Average and median 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 the median is less likely to be skewed by outliers of a few very high priced or very low-priced sales.
The median selling price for homes has topped $800,000 every month of the last quarter of 2020. It topped $800K only 2 times in the last 2 years. The average selling price soared to over $1,650,000. That sounds like a record to me.
The median condo selling price also took a big jump in December. At $629,000, it was up 19% over November and up 22% over December of 2019. However, that looks like a spike because median prices have been consistently in the $500,000's for the last 6 months. In the last 6 months of 2019, median prices ranged from the high $400,000's to mid $500,000's, so prices do appear to be up a bit for 2020.
Days on Market:
The days on market (DOM) is the number of days a property has been on the market until close of escrow.
The average days on market for homes is still pretty low at 130. SO, there's not much new there.
Condo's DOM topped 200 days. One reason for that higher number might be that lenders are backed up due to the number of people refinancing to take advantage of today's low interest rates. You can't close, and that DOM ticker keeps on running until the buyer can get their loan funded and close.
Thanks for reading. We're really looking forward to a healthy 2021 and getting folks back on Maui. Be well, stay safe and we'd love to hear from you anytime.