And the COVID weirdness continues, but we are still optimistic. Welcome 2022!
Last year at this time we got off to a more optimistic start on Maui. Our COVID numbers were way down, there was a vaccine on the horizon, planes were flying, visitors were arriving, and the real estate market survived 2021.
Not only did the real estate market survive, but it was HOT coming into 2021, and by April it was clearly on fire, and inventory was on the decline.
During the final months of 2020, condo inventory exceeded 700 units for sale. In April of 2021, we saw less than half that many condos available on the market. Single family homes for sale had dropped from over 330 at year end 2020 to barely 200 in April 2021. And pending sales in April exceeded an eye popping 900 units.
By June, Maui was almost back to something approaching a new normal. However, tourists were arriving in droves, rental cars were almost non-existent, restaurants and bars were limited to 50% capacity with the 6 foot distancing rule, and tour operators, also at 50% capacity, were maxed out.
Visitors who couldn't go to their favorite restaurants or attractions were cranky. Locals, who had had the islands to themselves, were overwhelmed by the new crowds, and that made them cranky. But we all were making it through and remained optimistic.
And then came Delta, and I don't mean the airline. A lot of us were very concerned about another potential shutdown. Thankfully, that didn't happen. State and county officials kept the already existing rules in place. Delta started to drop off and officials started to loosen restrictions. Restaurants were allowed to go to 100% capacity with no 6 foot rule.
Then came Omicron. We have the highest number of COVID cases in Hawaii that we've ever had, and we're still open. Real estate is still rocking and 22 is my lucky number. The whales are here now in large numbers and they are jumping like crazy.
My crystal ball says we may be through this variant by the end of March, and there won't be any more of them. By April, we'll start to see a little more inventory. Prices will not go down, but we won't see as many bidding wars and multiple offers, which will be a little bit better for buyers, but still good for sellers.
What else is happening in real estate right now? Let's look at the numbers.
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere from 2 to 8 weeks before closing.
I thought it might be interesting to look back at the end of 2019, seemingly the end of normal, and compare that to the end of 2021, hopefully not the new normal.
In December of 2019 there were 457 homes for sale and 96 were sold that month. In December of 2021, we had only 183 homes for sale. Which was 60% less inventory, and yet, there were 188 sales, 23% higher.
Condo inventory at the end of 2019 was a healthy 482 units. With the first wave of COVID, condo inventory, unlike single family home inventory, surged to almost 750 units by mid-2020. There were 123 condo sales made in the last month of 2019. With travel restrictions in 2020, condo sales slumped to as low as 51 units one month. However, as travel restrictions eased at the beginning of 2021 sales jumped to record highs, exceeding 200 units per month for several straight months.
Pending sales represent the 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.
Pending sales at the end of 2019 were 499 units, including 180 homes and 251 condos. At the end of last year, with home inventory 60% less than 2019 and condo inventory less by 72%, pending sales are up in both segments.
However, we are seeing the number of pending sales declining, most notably for single family homes, where the number has dropped slightly month by month since July.
Condos, however, have remained fairly strong finishing the year with 344 pending, yet there haven't been more than 136 units for sale in any month in the last 6 months.
A few Aloha Group Maui pending sales that were under contract within 3 weeks or less of listing.
Inventory tells us how many units are available for sale in each category.
It seems like we have covered inventory pretty well. I will just note that in the not too distant past, inventory for both homes and condos steadily ran in the 450 - 550 range. It will be quite some time before we see that level again.
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.
Continuing the 2019 vs 2021 theme, the average selling price for a home back in 2019 was just over $1,000,000 and the median selling price at the end of the year was $740,000.
In the last 6 months of 2021, the average selling price has fluctuated wildly from as low as $1,200,000 up to $1,980,000. The median selling price seems to have settled in at around $1,000,000.
The average selling price for a condo 2 years ago was just over $660,000. In the final months of 2021 the average selling price was over $1,000,000 in 5 of the final 6 months. The median selling prices is up from $514,000 to $700,000.
No matter how you look at it, if you've owned since 2019 or before, you've gained a lot of equity.
DAYS ON MARKET: avg-sold listings
The days on market (DOM) is the number of days a property has been on the market until close of escrow.
In the last few months we've seen some of the lowest days on market ever. This shows us how sales and pending can remain so high, while inventory is so low. There is inventory, but it comes and goes really fast.
A word about what's ahead.
Demand is still high and interest rates are still near all-time lows. However, increased prices and even the modest interest rate increases we've seen will dampen the enthusiasm of some would-be buyers.
So, does that mean that prices will come down? No.
I don't see any indication of that happening on Maui. On a national basis most of the big names with crystal balls, Fannie Mae, MBA, and so on, think we will still see appreciation in the 4% range.
So, if you are a potential seller, the good news is that you've gained a lot of appreciation and prices aren't likely going down.
If you are a buyer, the good news is that prices aren't increasing as rapidly, interest rates are still near all-time lows and you will likely face less competition when you make an offer.
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), Beau Dyer R(B), Angie Liu R(S), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), Paul Goodman R(B), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, 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 2022 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.