Visitors are back, restaurants are as full as allowed, rental cars are sparse and real estate...
Update in brief
It seems like most of Maui wasn't expecting it. The Maui Visitors Bureau wasn't the hotels and condo complexes weren't, and the car rental companies certainly were not, but the visitors are here. In fact, we're expecting more visitors this July than we had in July 2019. That seems to be the good news and the bad news.
The good news is our regulars are returning. Unfortunately, it seems like we are getting some newer visitors that are unfamiliar with the meaning of Aloha.
The supply of rental cars is somewhere between short and nonexistent, and what is available is pricey. And the cars that are available all seem to be illegally parked on the Road to Hana, hindering traffic and blocking local residents from getting home. The County is responding by increasing patrol officers and fines.
There are still occupancy limits on restaurants and bars, and while those may loosen up a little more this month, right now many don't have reservations available until well into August. I'm sure increasing occupancy limits will be a relief for restaurant owners; however, workers are still in short supply. And, yes, masks are still required when you enter and exit a restaurant.
The real estate market is rumored to be slowing. However, based on the numbers there is no sign of slowing yet.
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere from 2 to 8 weeks before closing.
Home sales topped 100 back in September 2020, and have dropped below 100 one time since, despite rising prices and decreasing inventory. In fact, sales are up 52.8% over June of last year.
Selling prices also increasing again in June, but so did inventory and the number of homes pending. There is no sign of home slowing yet!
A whopping 243 condos closed in June. That is the second highest number of all time. Only April of this year was higher. June of this year was up 267% over 2020. Back then we really thought that condos, especially condo-tels, were going to lose value and sales would slow due to the lack of tourism. I'm so pleases that "we", including me, were wrong about that.
The only thing that will slow down condo sales in a shortage of condos to sell.
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.
Pending home sales topped out in March at 285, but pending sales remain strong at 235. Just over half of those are prices over one millions dollars. So, I expect that the number of sales, as well as, the closing prices will remain steady for the near future.
Pending condo sales remained above 400. Of those, 185 went under contract, meaning they went pending, in June. The fact that there were only 220 available for sale on June 1, gives you an idea of how fast inventory is moving on Maui.
Inventory tells us how many units are available for sale in each category.
Inventory remains the story. There is inventory. There has to be or we couldn't be selling record numbers of homes and condos. But it is moving fast.
The availability of homes for sale actually increased in June. However, most of that increase came from homes priced above the median selling price. So, with a total of 110 sales, fifty-five homes sold for equal or less than the median selling price, which you already knew. There are currently 57 homes for sale for less than $1,117,500. That gives us one month of inventory.
The other half of those sales, 55 homes, sold above the median selling price. It is notable that there are only 160 homes for sale at the higher prices. That gives us only 3 months of inventory. So, the high end is also a sellers' market.
Condo inventory has dropped to the lowest level ever. In December, there were 677 condos on the market, today there are only 178. That is a drop of almost 75%. There seems to be a good number of would be condo buyers, but with condo owners experiencing some nice income after the drought of 2020, they are not as anxious to sell.
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 prices or very low priced sales.
The law of supply and demand seems to be alive and in full force in this market. This is evidenced by inventory staying at historically low levels while sales hit historically high levels with selling prices steadily increasing. The median price for May was just under a million dollars at $994,495. It increased by over 21% in June to hit $1,117,500.
The average selling price for a home on Maui is up 81% over the same month in 2020 and 64.5% for the first 6 months of 2021.
Are prices going to stay at that level? Will we see a decline in home prices on Maui? Well, we aren't building very many so... supply... demand, get the picture?
Condo selling prices hit a median of $650,000, and the average dropped from one month earlier to just under $1 million. And the same thing applies here. With only 178 condos available for sale, we are at the lowest inventory ever. Remember, there were 185 that went under contract in June, and we are definitely not going to be building any more vacation rental condos in the foreseeable future.
No signs of real estate slowing down.
Days on Market: (avg-sld listings)
The days on market (DOM) is the number of days a property has been on the market until close of escrow.
The days on market for homes dropped to 108, the same as April. That suggests to me that there are a lot of cash purchases.
The days on market for condos is still up to 160. Lenders, especially those few who will make loans on condo-tels, are still very short-handed and backed up. So I expect that the DOM for condos will remain at these higher levels.
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), Jamie Martin R(S), Anthony Freda R(S), Courtney Stice, 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 2021 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.