Interest rates have skyrocketed, sellers are dropping prices, we're dangerously close to recession...Is the real estate sky falling?

Um...No, not really, not yet anyway.

Inventory is up, sales are down, and sellers are lowering their asking prices, but the actual selling prices? Well, those are still climbing.


Home sales dropped 13% in June to 85 sales. That just happens to be the same number of sales on the island as back in February. The decrease in sales combined with a 28% increase in inventory gives us 3 months' worth of homes for sale. While it is still very much a seller's market for homes, higher inventory should mean more choices for buyers. However, the median selling price still rose again in June.

Condo sales, on the other hand, did not decline during June. There were 150 sales, the same number of sales as in May. The median selling price rose a whopping 16% and the average price was up 11%. Inventory for condos climbed 30%. That sounds like a huge increase, but we still have just 1.4 months of inventory. So, it is still a strong seller's market here on Maui. 


Inventory tells us how many properties are available for sale in each category. We started seeing some growth in inventory in May for homes and condos. However, even the combination of increased inventory and increased interest rates are not yet impacting selling prices. 

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.

So while the average home price declined in June, the median still increased. We also saw increases in both the average and the median selling prices for condos.

Where is real estate going? What's the news and what can you expect?

The reporters are talking doom and gloom. In fact, the Wall Street Journal reported that three-quarters of global CEO's say we are in a recession or will be in the next 12-18 months. Corelogic, one of the largest real estate data firms, points out that a recession doesn't equal a housing crisis.

It may be counter intuitive, but in the last 6 recessions, home prices actually increased.

Why? People are still going to get married and have babies. They'll need a bigger house. The babies will grow up and move out. People will need smaller houses. There will still be divorces, and houses will be sold and bought, and people who come to Maui will still likely want to own on Maui.

While interest rates are up, double those in 2021, they were down this week. And, as it relates to recession, rates tend to decline as recessions reach their end. According to Fortune Magazine, in the last 5 recessions mortgage rates fell an average of 1.8% from peak to trough.

I'm not saying the shifting market won't be stressful. Many of us went through a very hard time during the housing crash of 2007 and the next few years following. But the fundamentals today are very different than in 2007. We are in a seller's market today; '07 was a buyers' market and lenders were giving loans away to anyone who could fog a mirror.

So, if you are having second thoughts about buying you might take some comfort in what the experts are forecasting. 100 economist forecast that 2022 prices will be up 9.3% compared to 2021. You can see in the chart below that the increase in home selling prices is decelerating through 2024. It is very important to understand that deceleration does not mean stopping or declining. The expectation is that prices will continue to rise at a "normal" pace for the foreseeable future. 

If you are thinking about selling, it's still a seller's market. While interest rates are up, we are still seeing multiple offers, and 30% of June home sales were cash offers. For condos 40% of the transactions were cash offers. I do offer a word of caution. If you are thinking of selling, don't dawdle. While we don't see a downward trend in the numbers, headlines of gloom and doom tend to become self-fulfilling prophecies.

If you are thinking of buying, let's talk about your goals. If it's the right time to your goals can be met, great. If the timing and the market aren't right for you, then let's see if we can help you develop Plan B. We understand what's at stake, and there will never be pressure or overselling from our team.


Get more information and details

To get more information on property and trends, you can search all properties listed for sale at  If you can’t find what you’re looking for there, send us an email to, 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), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), 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.