Aloha, for those of you paying attention, you'll notice that this report is very late this month. That's because we went on a quick two week vacation to the parts of Northern California that were not on fire.
That included a few days in Grass Valley at my daughter's house to visit with the family and the grand dogs.
After that we attended my high school reunion. I'm not saying which one, but it did have a zero in it and I got to see a bunch of my OLD friends. Geez, where did the time go?
Then we were off to Aptos where the temps were in the 60's to visit Barb's mom. I was glad I packed my long pants and socks. We wrapped up the trip in San Francisco. We parked the car for $36 a day and walked everywhere up and down those famous hills. We had to do something to work off the clam chowder, great Chinese food, and martinis.
On Maui it's been...well, weird. The Guv and Mayor asked our guests to kindly stop coming to the islands. And people actually listened! That little request caused a major jump in departures back to the mainland and the planes coming in were far from full.
It's driving the businesses here lolo (crazy). Restaurants and tour boats like Scotch Mist and Pac Whale are back to 50% capacity. Inside dining requires proof of vaccination. However, if you have no proof of vaccination you can sit outside. Which, by the way, are the best seats anyway. But lower capacity means the businesses can't support as many employees, so we'll see the unemployment numbers jump again.
And real estate - wow, let's do the numbers.
Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere from 2 t0 8 weeks before closing.
News from the mainland is that sales are slowing and they are seeing more inventory. That is most definitely not the case here, at least through August and into early September.
Sales of homes came close to a record with 121 sales closed. With inventory fluctuating just above and below 200 homes it is difficult to imagine that we can continue this record pace of sales. Our Maui brokerage, Keller Williams Realty Maui, has already topped a billion dollars in sales for the year to date.
Condo sales dropped to 186 after 5 straight months of 200+ units selling. That is also amazing considering we haven't even had 200 condos for sale at the end of any month since May.
All that said, we have entered the "shoulder-season". That combined with the government warnings could lead to a bit of a slow down here.
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.
You can see a bit of a slowdown in the pending sales. In March, we actually topped 900 properties under contract for a few days. The current 688 number is about a 24% drop form the top at the end of August. 24% is a big number, but compared to 2019, which I reflect on fondly as the last normal year on earth, 688 is still much higher than any month that year, when 590 units was the highest.
With 246 homes under contract we expect to see the closed sales stay in the 200+ range for at least a few more months. After that, the lack of inventory could kick in.
The 333 condos pending is way off, 27% to be more precise, than the 456 of March. However, compared to the "before times" in 2019, when the highest for any month was 271, we are still way ahead. However, condo inventory is in even worse shape than home inventory - but I'm getting ahead of myself.
Inventory tells us how many units are available for sale in each category.
In real estate we deem the market to be "balanced" when there is about 6 months' worth of properties for sale. That means if no new properties come to market, it would take 6 months to sell off all of those properties. If we have less than 6 months of homes or condos on the market, it is a seller's market. If there are more than 6 months, it's a buyers market.
We have less than 2 months of single family home inventory. For condos we don't even have enough inventory for 1 month. So, we should expect to see both closed sales and pendings, especially in the condo category, decrease. That doesn't mean it won't be a seller's market any longer, it just means that lack of inventory is really starting to takes its toll.
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 median selling price for a home stayed above $1 million for the 3rd month in a row. The median asking price for homes on the market is $1,850,000. There are currently 46 homes for sale priced at less than $1 million.
It's worth noting that the average selling prices is over $1.7 million for the 4th month in a row, but the average asking price... Are you sitting down? It's currently $3,464,415.
The median condo price dropped back to $650,000. That is not terribly inconsistent with the last several months. It's the same for the average selling price. Although, $941,708 is the lowest monthly average in the last 6 months.
Days on Market: (avg-sold listing)
The days on market (DOM) is the number of days a property has been on the market until close of escrow.
The low number of days on market for homes is still surprising to me. You would think that the quick close is due to a lot of cash sales. And there are, over 30% of the August sales were cash. But the majority are still conventional financing. This combined with the high number of sales given the inventory indicates that the new homes coming to the market get snatched up very quickly, but you already knew that, right?
However, only 114 days on market for condos has to be an all-time record. Just a tad under 40% of those sales were cash.
Stay tuned. I promise to get out next month's report in a much more timely fashion. And tune into our YouTube channel, LahainaLeePotts - YouTube, for regular updates including Friday Night on Front Street.
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.