Is the real estate market slowing down? Nope, just running out of gas.
An article this week in The Maui News reported that September arrivals to Maui were down 18%. That seems like a huge dip. But remember, that was when our governor asked that visitors not come to Hawaii unless they had urgent business here. And they listened, at least for a little while.
In October, it felt like things picked up a little bit until Halloween. Then, even with the annual closure of Front Street and parade, the revelers were out and Front Street was rocking. Lee and Barb happily shared a few scenes of Halloween on Front Street.
Mid-month this month, restaurants were allowed to go back to full capacity, providing there is still 6 feet of social distancing. You still need proof of vaccination for indoor dining, but how many restaurants on Maui are exclusively indoors? So many of the tables are outside anyway.
Meanwhile, back in real estate there are at least 2 big news items related to affordable housing. The first and least controversial is an 800 unit housing development in West Maui. Once completed there will be 100 affordable units, 300 workforce rentals and 400 market rate units. About 100 will also have potential for ohanas. These are slated for 2023. You can get more information in The Maui News.
Also, ostensibly in an effort to create more affordable housing, the Maui County Council considered a proposal to phase out short term rentals in condos located in apartment zoned areas. It's very important to note that short term renal is permitted by the county code in these buildings.
Most of the properties identified were built in the 1960's and 1970's. They were built specifically for vacation rental use. Most of the units are studios of 500 square feet or less or one bedroom units of less than 600 square feet. Most have no storage and no garages. Maintenance fees range from the high $700's to over $2,000 per month. Add that fee to a mortgage, property taxes and utilities, and that doesn't sound like affordable housing to me. That proposal failed due to efforts from the Realtors Association of Maui and a lot of public testimony. However, the council will continue to try and reduce the number of short term rental properties available.
Missing your Vitamin Sea? Catch up at the AlohaGroupMauiBlog.com.
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere form 2 to 8 weeks before closing.
With the exception of a small spike in August, sales of single family homes on Maui have remained level for the last 5 months. Inventory for single family homes has also remained pretty stable, if you can call consistently low levels of inventory stable. And pricing? It appears that may be easing, or is that just what's selling? We'll dig into that a bit later in the pricing section.
In condo sales however, we see some significant downward movement. And, yeah, it's an inventory issue, but seeing sales numbers go from 240+ units in April, May and June, to just 130 in October, this is telling.
What is it telling us? It's inventory! We went from 506 condos for sale in February to 178 in June. In the last 4 months we have averaged about 130 at any given time.
You can see all the properties for sale on Maui at AlohaGroupMaui.com.
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.
Despite falling inventories, look out below, pending are fairly strong still. Total pending topped out at 886 back in March. The drop to this month's 651 is a significant drop, however, 651 is still a strong number on Maui.
Pending home sales at 223 are at the lowest level this year, but only by one sale compared to the second lowest month back in January. The fact that pending home sales has remained above 200 when available homes for sale have remained at 200 or less on average since February, tells you how quickly homes come to market and go under contract.
Condos are a different story. Pending have declined from a high of 456 in March down to 327 last month. However, unlike homes, inventory has been declining far faster for condos than homes. The current condo inventory is less than half of the current pendings.
You can see all the properties for sale on Maui at AlohaGroupMaui.com.
Inventory tells us how many units are available for sale in each category.
The line is definitely getting old, but inventory is still the story and will likely continue to be the story well into 2022, if not for the entire year. At the end of October, home inventory was down to 179, about 13% less than the average for the rest of the year. Through the beginning of this month, inventory is still declining.
The picture for condo inventory is much more dramatic. In August 2020, condos were plentiful, statistically a buyer's market. Today, there are 134 condos for sale and last month there were 130 sales. That is most assuredly a seller's market.
We are hearing about things "slowing down" on the mainland. Here we are still getting multiple offers, usually over asking price on properties.
Find out what your property is worth at MauiHomeValues.net.
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 average selling price for Maui homes peaked back in April at $1,992,467. Last month the average price was a paltry $1.2 million. Does that mean home prices are finally coming down? I'm afraid not. It seems there were fewer of the very large sales. In October, there were only 2 homes that sold for more than $4 million. In August, there were 8. Oh, and just in case you might think there is also low inventory in the $4 million plus range, there are 46 of them for sale right now. That looks like a buyer's market, and we're happy to help you with one of those.
And, the median price is down as well.
The average condo selling price stayed over $1,000,000. It has been over the million dollar mark 4 of the last 6 months. There were 41 sales of condos over $1 millions and there are currently 46 listed for sale. Even at this lofty price point, it's still a seller's market.
The median price was down from $728,125 in September to $672,500 in October. The median price has been up and down over the last 12 months, alternating between a low of $558,000 to a high of $728,125. Overall condo prices are up 14% according to the Maui MLS.
Do you want to know what your home or condo is worth? Just go to MauiHomeValues.net and enter a few details to get the current value for your property.
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.
The average days that a home was on the market from the day it was listed until it went through the whole escrow process and closed dropped to 100 days even. That is the shortest number of days on market for Maui.
The days on market for condos is still up at 150 days. That is more a sign of how long it takes to close a loan on a condo-tel than it is any signal about the market.
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), 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 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.