Maui market gets HOT in 2017
Numbers are up in homes in condos, but sales slump in some key areas.
In the last few years some real estate markets on the mainland have been so hot that some were deemed to be on fire, but Maui refused to follow… until this year. Maui has been hot. Median selling prices for both homes and condos are up an identical 12% over 2016. In July of 2016, home and condo prices were also up over 2015, but a much more “normal” 4%.
The number of units sold and the average selling price is also up for homes and condos. So, the questions that everyone is asking are “are we at the top of the market” and “will there be another bubble bust?”
The answer to both questions is “no”. We are not at the top of the market and there won’t be another bust. We have a bit of room left on the pricing side, but not a lot because we are pushing the limits of available pricing for medium and lower priced homes; and inventory is tight.
Financing is also the reason there won’t be the kind of bust we saw in ’08. Lenders have really tightened up and they are scrutinizing every borrower and every property. So, we are not leveraged the way we were back then and a lot of buyers are cash buyers.
Condo sales are up and the trend looks strong
But it’s not all roses and champagne
Condos have had a strong showing in 2017, with sales up 10% over the same period last year. It looks like that trend should continue through the end of summer.
In May there were 130 condos sold on Maui. That is the highest number of sales for a single month in the last 3 years. June sales were off by just 7 units.
There are currently 246 condos under contract. Some will close later this month, but most are scheduled to close in August, and some in September. So, we should have strong numbers into the fall.
The big growth in sales for condos in 2017 has been very uneven around the island. South Maui has been booming. The number of sales in Kihei is up 32% over 2016, and the median selling price is up 16%.
Wailea/Makena has had 82 sales so far this year. That is the third most of any of Maui’s “districts”. It is up a whopping 55% over 2016, and while the average selling price is up 13% the median price is off by 5%.
Maui’s West Side is an entirely different story.
Only one district, Kapalua, is up. After a series of slow years, that resort area is up 38% in the number of sales. However, like Wailea, the average selling price is up, with the median price down.
Other than that, sales performance on the West Side has been brutal. Kaanapali sales are off by 33% with the median selling price down 10%.
Napili/Kahana is down 10% in the number of sales, but prices are holding even on the condos that are selling.
Lahaina sales are off by 8% and the median selling price is down 13%.
The other main areas with significant condo sales are Maalaea and Maui’s Central District. In both areas sales are up 6% and 7% respectively. The median selling price in Maalaea is up a significant 13%. However, that number is eclipsed by a 20% increase in the median selling price in the Central District.
While the overall condo sales on Maui look strong, you can easily see that the winners and the losers are district specific, and, within the districts, it can come down to individual complexes.
If you are buying there are still some “deals”. Maui’s West Side should have some gems.
If you are selling or considering selling, keep in mind, I don’t see the 10% run up continuing, certainly not through the end of the year. In some complexes prices may have topped out. And, if you’ve been sitting on the market for more than 90 – 100 days, you might want to rethink your pricing.
For more specific information on any condo complex on Maui send an email with your request to info@AlohaGroupMaui.com.
Overall the single family home market is hot
But, that only tells half the story
This time last year sales were completely flat. 2017 isn’t much better with sales up only 2% compared to last year. But prices are different story.
A big part of the reason sales are flat is inventory, i.e., supply and demand. For buyers looking for a home in the median price range, currently about $740,000 on Maui, or even trying to get a conforming loan, there is only about 5 months’ worth of homes on the market. That tends to drive prices up. A 6 month supply is considered balanced.
If you are looking to buy at the other end of the market, say $2,000,000 and up there is an oversupply. As of this writing we had 10 sales of homes priced at $2,000,000 + in the last 30 days. We have 170 available for sale. Too many homes for sale and not enough buyers.
The best values and, as you might imagine, the district with the most sales on Maui is the Central District (Wailuku/Kahului). The median price through the first 6 months is up 7%, but is still only $589,000. Based on the current rate of sales, there is enough inventory to last only 3 months.
If you looking for a more affordable home and the Central District is not your cup of tea, it might be worth a drive upcountry.
Maybe you can start in Makawao. It has a bit of an artsy flair, but with cowboys. They have some terrific little eateries and a great 3rd Friday street fair. The median home price is $627,500 on the year, but prices are creeping up in the community.
The other town with below Maui median prices is Pukalani, a little hole (puka) in heaven (lani). The median price on the year is$675,000. That is up 13% over last year and prices are rising in the area.
Other upcountry areas, specifically the Kula area, are not as “affordable”. Sales in that area are up 50% over last year. And, while the average price is down, the median selling price is up 25% so far this year to $833,500.
In South Maui the luxury market and the more affordable market have flip-flopped. By that I mean that Kihei, the more affordable district, is perfectly flat in terms of sales, 88 so far this year compared to 88 for the first half of last year. However, the median selling price has jumped 24% to $763,750.
In Wailea sales are up 89%. The median selling price is up only 4%. However, the average selling price is up 41% which implies some big purchases in the neighborhood.
Maui’s West Side single family home market has fared better than the condo market. While some areas, specifically Kapalua, which has had only 2 sales this year, and Lahaina are down in sales, other areas seem healthy.
Lahaina home sales are down a significant 14%. However, the median selling price for Lahaina has risen an amazing 83% to $1,414,500. The Lahaina district includes Launiupoko which accounted for almost half of Lahaina’s sales this year,
The Napili – Kahana market continues to grow. The number of sales is up 17% and prices are up 4%.
Kaanapali is interesting in that sales are flat with just 1 more sale this year than last. However, the median price of $1,323,000 is off 23% compared to the year before. That is far and away the largest decline of any of Maui’s major districts.
So, how is the market? At the lower end of the market with something akin to many mainland price points, it’s hot and it’s a seller’s market. At the Maui middle and upper end, supply and demand are firmly in play.
The numbers indicate that the overall market is strong. If you are buying in the lower to mid-market you should have your financing lined up and don’t try to lowball the price. You will lose that house.
If you are selling in the upper end you need to do what you can to make your house look more attractive than other homes in the neighborhood. And you may want to sharpen your pencil if you really want to sell.
If you want to know something more specific about any Maui property or area, drop us an email at info@AlohaGroupMaui.com.
If you are coming to Maui this year, let us know, we would love to say hello.
A hui ho!
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