Condo Inventory jumps increasing supply 22%. Condo selling prices hit a new all time record high.

Wait, supply is up, demand is up and prices are up. That doesnʻt sound right.

Thanksgiving is over, the whales are arriving and so are visitors. Itʻs still 80 degrees plus during the daytime in Lahaina. We had a big fire earlier this month in the West Maui Mountains. It was reminiscent of the fire we had a few years back. The fire made it all the way down to the highway and just across the street from Lahaina proper. This new fire burned over 2,100 acres and almost burned the "L" out of the hillside.

Weʻve also had high winds and a big north swell. So, your favorite beach may have relocated.

Other than that, itʻs just another day in paradise.

And real estate? Sales are slowly decreasing, inventory is slowing increasing, and selling prices? Well, supply and demand is not necessarily behaving the way it should.

SALES:

As expected, both condo and home sales are down this month. You could see it coming based on the decline in pending sales which is the result of flat home inventory and low condo inventory. But even considering those leading indicators, sales are down a little more than expected. 

Home sales dropped from 87 sales in August, to 57 sales in September. Last month we were back up to 63 sales, but it doesn't seem like we are headed back to the 80+ sales level anytime soon. Although listings have remained steady in about the 240-260 range since July, pending sales have continued to decline. Part of the reason for that is the time of year, but interest rates, inflation, and world events all play a role.

Condo sales dropped to just 70 units last month. Thatʻs down from 150 condos sold in both May and June. As we noted last month, pending sales are declining slowly, but steadily. However, we will be coming into Mauiʻs busiest real estate season soon, and I expect the pending and sold numbers to begin increasing. Also, even though we still have less than 3 monthsʻ worth of condos for sale, and itʻs still a sellersʻ market, we did see a 22% increase in the number of condos for sale last month.

INVENTORY:

It is a still a sellersʻ market based on inventory levels and current demand. The number of homes for sale has remained quite consistent for the last 6 months. In June, we had 258 homes for sale and at the end of November, there were 252 homes for sale. If sales continue to slow, even if inventory remains steady, we could reach a balanced market by the 2nd quarter of 2023.

Condo inventory is actually higher than it was a year ago. We began December of 2021 with just 129 condos for sale and started this December with 198 for sale. Thatʻs a big increase, right? The big difference is that 129 condos for sale wasn't enough to last for a full month last year. This year we have enough to last almost, but not quite, 3 months. It is still a solid sellersʻ market for condos.

PENDING SALES:

Pending sales are a "leading indicator" and give us insight into what closed sales will look like in the next month or 2. And from a Realtorʻs point of view, it ainʻt pretty.

Overall pending sales are down about 5%. Pending home sales remained flat at 113 as compared to 112 last month. Pending condo sales were down by 12 units over the prior month, a decline of 6%.

SELLING PRICES: average and median sold prices

There have been some big swings in average selling prices for homes this year. We started the year at $1,572,078, climbed to $2,225,363 and over the last 6 months eased on back down to the $1.3 million range. The lower average selling price is a reflection of slower sales of higher end properties. Think $3 million plus. My sense is that those potential buyers, predominantly cash buyers, are hanging on to their cash and waiting to see what happens with the economy and the stock market.

The median selling price remained stable for the last 3 months in the $1,025,000 range. We started last December with a median selling price of $1.1M. So, there has been some change, but even in the face of interest rates that doubled in that time frame the change was not dramatic.

By the way, the current average asking price for a home on Maui is $3,512,411 and the median is $1,790,000.

Earlier we pointed out that it is still a sellersʻ market and there is still high demand for condos on Maui. Last month both the average and the median selling prices were record highs for Maui. The average selling price came in at $1,356,665. You might notice that is higher than the average selling price for a single family home. Wow!

And just for fun, the current average asking price for a condo is $1,780,000 and the median is $950,000.

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 lee@alohapotts.com, 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), Heather Zidell, R(S), Magdalena Odonnell 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 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.  

In September, home sales took a tumble with only 57 sales. That was one of the slowest months for home sales on Maui ever. Was that the beginning of a steep downward turn? 

No.

October came back with 77 sales. That's up 35% over the previous month. So, while we don't see a steep downward trend in home sales, we have to recognize that there has been a steady, slow decline in the number of sales since hitting this year's high number at 106 sale in April. 

For some context, it might also be worth mentioning that in November of 2019, there were 71 home sales. So, 77 sales in any one month is not abnormal.

Moving on to condo sales, there were 7 fewer condos sold in October than in September. After the sharp drop in the number of condo sales in July, the number of sales has fluctuated slightly up and down. However, my sense from talking to Maui property owners and would-be buyers is that the demand for Maui condos is strong. The low sales number in this case is more about supply than demand. 

INVENTORY:

Despite everything else that is going on in this economy, inventory, i.e. supply, is still calling the shots on real estate on Maui. In the table above you can see that inventory has increased from May by just over 25%. What you can't see is that we started the year with only 177 homes for sale. That's an inventory gain of 45% for the year. That's a huge increase in inventory. Even with that, we have only 3.3 months' worth of homes for sale. By definition, it's still a sellers' market.

The number of condos for sale inched up from January through May and then spiked up in June and July. Which was, maybe not coincidentally, when the number of condo sales sank significantly. 

One might think the simultaneous spike in supply and dip in demand would bring some balance to the market. One would be wrong. Despite a 17% increase in the number of condos for sale, there is still less than 2 months of inventory for sale on Maui. It is clearly still a sellers' market. 

SELLING PRICES: average and median sold prices

The selling prices of home in October seemed to support the idea of it still being a sellers' market. The average selling price for a home peaked at $2,255,363 back in May, signaling a shift in Maui's high end luxury market. The result was a dip of over $700,000 with both August and September going below $1,500,000. However, in October we saw the average selling price top $1,800,000 which might indicated the luxury market still has some steam left in it.

The median selling price also got a small lift, up just 4% over the previous month. But any asset you own that rises 4% in a month is not too bad.

Condo prices didn't fare as well as home prices. The average selling price for a condo dropped below $900,000 for the first time since March of 2021. However, Maui's high end condos, the sales of which would increase the average selling price, are also in short supply, so we should take the decline with a grain of salt.

The median selling price of a condo increased $2,500, which is less than .5%. That's nothing, but the trend over the last 12 months has been on the rise. The median selling price in October of 2021 was $672,500, and in October of 2020, when we were just starting to get a bounce back from the COVID shutdown, the median condo price was $581, 160.

PENDING SALES:

Despite solid sales results, we are bound to see a decline, perhaps a significant decline in overall sales over the next 2 - 3 months. This has nothing to do with demand, the culprit is inventory, and you don't need a crystal ball to see writing on the wall. It's written in the number of pending sales.

The number of homes and condos under contract scheduled to close between now and the next couple of months or so, has dropped below 400 for the first time since June of 2020. Which, in case you don't remember, was a pretty tough time economically and otherwise for a lot of folks here on quarantined Maui.

Later that same year sales began to return to "normal" levels. By early 2021, the market was catching fire and, in March, pending topped to 900 homes and condos for just a few days.

Historically, pending sales of homes and condos together have been in the high 400's and even up into the 600's. With low inventory and pending dropping into the 300's, while there may be debate as to whether or not the national economy is in a recession, for those working in real estate, directly or indirectly, the recession is on.

_________________

In context, give the state of the economy with what has happened to interest rates, the stock market, our national politics, and the world situation, Maui real estate is solid. By comparison to most other measures - rock solid. 

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 lee@alohapotts.com, 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), Heather Zidell, 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 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.  

Aina Nalu News

Presented by Aloha Group Maui

Issue 68, Q3 - 2022

Aloha from your resident experts!

This second quarter brought the end of summer and the start of a new school year and with it, a bit of a quieter island. This quarter also brought the first whale of the season! Experts say it's early, but not too early, so we'll take it. There haven't been any spotted since, but we're hoping the whale inventory will be higher than what the real estate inventory is looking like for the next quarter.

Of the 4 units sold in this quarter, 2 were sold before listed, and 2 were sold at a record price. There are currently no units active or pending.

Here is a comparison of what happened in Q3 2021 vs. Q3 2022:

Unit sold in this same quarter in 2021 ranged from $565,000 to $680,500. Two of these units were 2 bed, 2 bath units, two upstairs, downstairs, and they sold for $640,000 and $690,500. That is a price difference of up to $210,000 in just one year!

There hasn't been a unit listed in Aina Nalu since July 1 (the two listed on 8/29 were already sold before listed) and we're seeing low inventory all over the island, not just Aina Nalu. It continues to be a seller's market; there are less than 2 months of condos for sale currently on Maui. Prices are still appreciating, but at a much slower rate. 

From July 1 to September 30 there were 4 listings and 4 closed sales. There were 0 cancelled listings, and 0 expired listings at the end of the quarter. There were 0 active listings and 0 pending sales at the end of the quarter.

For more details on current Maui real estate prices and sales, go to the Maui Real Estate Advisor for all the stats.