The real estate market is HOT, but sales are sagging.

We'll talk about that in a minute. First, what's happening on Maui?

COVID Mandates

Most COVID mandates are likely ending soon. Lt. Governor Josh Green, reported that he and other state leaders are "cautiously optimistic" that most COVID-19 mandates could be lifted by the end of next month. He cited an 83% drop in cases for Hawaii. He said the Safe Travels program is set to expire on March 25.

New Affordable Housing Project

A new 752 unit affordable housing project is being proposed. It would be in Waiehu, near Wailuku. It would include a mix of multi-family and single-family homes.

In addition, Developer Mike Atherton is hoping to break ground on a new housing development in Waikapu that would be a mix of affordable homes and larger rural lots. 213 of the homes in the 500 home development would be slated as affordable housing. Read more about this long awaited housing project. 

Whale Mania

February is the height of whale season here on Maui. And, just in case you're missing them, here are a few links to our whale watches.

January Whale Watch

Whale Season on Maui 1.0

And a favorite from a friend a few years ago.

A Close Encounter with a Humpback Calf

25 Mile West Maui Bike and Hike Trail Proposed

MauiNow reports there is a lot of interest in plans to create a 25-mile bike and walking trail. The trail will run form Ukumehame to Lipoa Point in West Maui. Several organizations, including the Maui Metropolitan Planning Organization, the County of Maui, and Alta Planning and Design are collaborating. 

Now let's do the numbers.

SALES:

Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere form 2 to 8 weeks before closing.

Home sales sagging in January, dropped 23% from December. Low inventory, steadily increasing pries, and competition have kept some buyers from getting the home they wanted. Ninety percent of the homes listed for sale today are priced over $1,000,000 and most are on the market less than 14 days.

Condo sales also dropped in January, just over 9%. It also appears that pricing and inventory may be stabilizing a bit. The inventory level is still at historically low levels, but at least they didn't decline during the month. On the other hand, the market is still hot for well-priced properties in desirable locations.

If you are thinking of buying, you might be interested in our new blog post, 6 Insider Tops for Winning Real Estate in 2022.

PENDING SALES:

Pending sales represent the 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.

While actual closed sales for homes dropped in January, as did inventory, the number of homes going under contract increased over 6%. As we see new listing come to market, we also see that they go under contract in less than 2 weeks in most cases. That indicates that the buyers are ready and are acting quickly.

The number of condos under contract remained steady in January, as did inventory. However, the number of condos pending is still more than two and a half times the number of condos for sale. And the 346 condos pending right now are the second highest number of pending sales in the last 6 months.

INVENTORY:

Inventory tells us how many units are available for sale in each category.

The number of homes for sale dropped slightly, just over 3%, in January. January was also the sixth month in a row the there were less than 200 homes for sale. The 177 homes for sale amounts to less than 2 months of inventory. However, for buyers shopping at the median price point of $1,160,000 or less, the supply is much lower than the demand.

The supply of condos for sale remained virtually flat at 138 condos. This is actually the highest inventory level in the last 6 months. Wow! How does that compare to January of 2021, a mere year ago? Way back 12 months ago there were 577 condos for sale. 

SELLING PRICE: 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 homes rose over 7% to just under $1.7 million. Even with that jump, it is still far lower than the 6 month high of just under $2 million established back in November of 2021.

The median price rose over 5% for the month reaching $1,160,000. The median selling price, which we believe is a better measure of how the market is trending, has risen steadily after a drop off in September. The difference is the median home price from January 2021 to January 2022 is 17%.

The average selling price for a Maui condo dropped 15% compared to last month. However, it is still almost $1 million and the median rose slightly. So, there might be some stabilization in condo pricing, however, when there are still more condos selling every month, demand, than the amount of active inventory, supply, there will still be upward pressure on prices.

DAYS ON MARKET: arg-sold listings

The days on market (DOM) is the number of days a property has been on the market until close of escrow.

Although the stats indicated that the number of days on market for homes have increased there may be an explanation that isn't really market related. Several homes in new developments closed. Since the buyers were under contract well before the homes were finished, the days on market are showing well over 300 days. There was also a house that had been on the market for 1,085 days. Those have an effect on the average.

DOM for condos went the other way, dropping to under 100 days. That might indicate a lot of cash closings since cash sales can close more quickly than financed offers. And, about 45% of last month's sales were cash sales.

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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), 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.  

Tactics from the trenches from Aloha Group Maui.

Getting the property you want under contract is job #1. That puts you in control and gives you options and time. 

If you are hearing from friends and the media that there is "no inventory", they are wrong! There were a record number of real estate sales last year on Maui and 2022 is off to a red hot start. 

Question: How could there possibly be a record number of sales if there was no inventory? 

Answer: That couldn't happen

The fact is, there is inventory, it just doesn't sit on the market very long, and sometimes it never even gets to the market in the MLS.

So, how do you win in a competitive market? Here are 5 insider tips from one of the most successful real estate teams in Hawaii.

1. Be first 

Today, real estate is a team sport and this is no time to be shy. Be PREPARED, be BOLD, and be FAST. Remember, the market is moving faster. That means if you are getting a loan to buy a property, be pre-qualified, and have your proof of cash for your down payment ready to show the seller.

If you happen to spot a new property before your agent notifies you - call immediately. Yes, we look at the new listings many times a day, but you could still be the first to spot something you like.

Get your offer in as quickly as possible, first if you can. As listing agents, when we receive more than one offer on a property, we give extra consideration to the first offer that comes in. It shows that the buyer is serious and their agent is on top of it. In a hot market, neither sellers nor their agents want to waste time with potential buyers who appear to just be testing the waters.

If you are afraid of being first, remember the story of the early bird and the worms.

2. Pricing

Afraid of making an offer over the asking price? Lean on your agent and the data, and be prepared to make an offer over asking price if it's warranted and you really want the property.

How much over asking price do you need to go? Good question. It varies based on the desirablity of the neighborhood or condo complex and property condition. It might surprise you to find out that on average, about half of the properties are selling for over asking price. If the property you want is in the half that are going over asking, you can expect the selling price to be 1% to 9% over the asking price.

Your agent can give you guidance based on comparable sales and what she/he can tell you about their sense of the trend for that type of property in your desired area. If you like the property, probably someone else will too, and they will likely offer over asking. So, it's wise to quickly pick a number that you are comfortable with.

If you afraid of overpaying, take comfort in the fact that prices are still on an upward trajectory, and the price you pay today will likely be lower than the price for the same property next month.

3. Escalation clause

What is an escalation clause? If you are really, really afraid of overpaying but you really, really want the property, the escalation clause may help you to hedge your bet.

The Escalation Clause language is "Buyer is aware and understands that there are or could be multiple offers on this property. Should Seller receive a bona fide offer prior to the acceptance of this contract at a net offer price (excluding any seller concession to the buyer) higher than this offer Buyer hereby agrees to increase his offer price to an amount equal to $XXXX more than the highest competing offer, up to a maximum offer price of $XXXX. Seller agrees to provide the buyer with a copy of any such offer for verification."

These are commonly used in today's market. Do they work? Sometimes. An escalation clause is better than nothing, but if you really want that property, it's smarter to make your highest and best offer first.

4. Cash is King 

If you can find a way to pay cash it makes your offer stronger. When a seller receives 2 offers that are identical except one is cash and the other is financed, they are likely to go with the cash offer because there is more certainty it will close. We have had several clients find ways to pay cash by getting a home equity line of credit (HELOC), getting short term funds from retirement accounts and some lenders have programs that allow you to get prequalified for an immediate cash out refinance for those who have enough cash but prefer not to tie it all up in one place.

5. Appraisal

If you are getting financing, your lender will require an appraisal, and will only make the loan to you if the property appraises for the full amount of your offered price. 

You may have heard of situations where buyers "waive" the appraisal. Well, they don't really "waive" the appraisal. They agree to come in with enough additional cash, the difference between the contract price and the appraisal price, to get the lender to approve and fund the loan.

Typical Appraisal language would be - "The buyer agrees that should the property appraise for less than the price offered and agreed to, the buyer will put down enough additional cash for the down payment to secure the financing detailed in this contract." 

If that sounds too scary, you can limit the amount of additional cash you are willing to bring in to get your loan.

This is an important clause because appraisers use sold comparable properties from history. While they can do minor adjustments for the rising market, appraisals are often lower than sold prices.

If you are still afraid of overpaying based on just the appraisal, the price trend is probably protecting you. And the house that doesn't appraise today will likely appraise in another couple of months.

A bonus tip if you are getting a loan is to use a Maui based lender. Getting a loan for a property on Maui is just like getting a loan anywhere else in the U.S., only different. There are nuances that out of state and sometimes even off-island lenders miss. When that happens, the loan falls through and the deal goes south. A local lender with a good reputation is going to give the seller's agent more confidence that the loan will go through and gives your offer a better chance of being accepted.

6. "AS-IS"

In about 90% of the offers we see an AS-IS Condition Addendum which is used to tell the seller that you intend to purchase the property in the condition it is currently in.

Why would we recommend you agree to purchase AS-IS? What if there is something wrong with the property? In Hawaii, the Purchase Contract is very buyer-friendly, and our AS-IS does not eliminate any of your rights or options. You can still do your inspections, you can still review all pertinent real estate documents, you can still do anything you would do in the normal process with the AS-IS, including your right to terminate the contract and get your deposits back under any of the 7 to 9 applicable contingencies in the Purchase Contract.

What you are telling the seller is that you are not going to nickel and dime them with issues; my favorite example being from an inspection report where the inspector noted that one of the kitchen drawers did not glide smoothly. However, true big issues, such as safety issues, the roof, plumbing, electrical, and the like are still on the table. 

Your agent and brokers are skilled at crafting and presenting offers. As noted, the Hawaii Purchase contract is very buyer-friendly with contingencies to help protect you once you get under contract. Your #1 job is to get the property under contract. We'll be right beside you all the way.

For more information click on the links below.

For updated market conditions

For our buying process

For 4 Things You Need to Know Before Investing in a Condo on Maui

If you are Canadian...

And the COVID weirdness continues, but we are still optimistic. Welcome 2022!

Last year at this time we got off to a more optimistic start on Maui. Our COVID numbers were way down, there was a vaccine on the horizon, planes were flying, visitors were arriving, and the real estate market survived 2021.

Not only did the real estate market survive, but it was HOT coming into 2021, and by April it was clearly on fire, and inventory was on the decline.

During the final months of 2020, condo inventory exceeded 700 units for sale. In April of 2021, we saw less than half that many condos available on the market. Single family homes for sale had dropped from over 330  at year end 2020 to barely 200 in April 2021. And pending sales in April exceeded an eye popping 900 units. 

By June, Maui was almost back to something approaching a new normal. However, tourists were arriving in droves, rental cars were almost non-existent, restaurants and bars were limited to 50% capacity with the 6 foot distancing rule, and tour operators, also at 50% capacity, were maxed out.

Visitors who couldn't go to their favorite restaurants or attractions were cranky. Locals, who had had the islands to themselves, were overwhelmed by the new crowds, and that made them cranky. But we all were making it through and remained optimistic.

And then came Delta, and I don't mean the airline. A lot of us were very concerned about another potential shutdown. Thankfully, that didn't happen. State and county officials kept the already existing rules in place. Delta started to drop off and officials started to loosen restrictions. Restaurants were allowed to go to 100% capacity with no 6 foot rule.

Then came Omicron. We have the highest number of COVID cases in Hawaii that we've ever had, and we're still open. Real estate is still rocking and 22 is my lucky number. The whales are here now in large numbers and they are jumping like crazy. 

My crystal ball says we may be through this variant by the end of March, and there won't be any more of them. By April, we'll start to see a little more inventory. Prices will not go down, but we won't see as many bidding wars and multiple offers, which will be a little bit better for buyers, but still good for sellers.

What else is happening in real estate right now? Let's look at the numbers. 

SALES:

Sales are the number of properties that actually closed escrow. These properties likely went under contract anywhere from 2 to 8 weeks before closing.

I thought it might be interesting to look back at the end of 2019, seemingly the end of normal, and compare that to the end of 2021, hopefully not the new normal.

In December of 2019 there were 457 homes for sale and 96 were sold that month. In December of 2021, we had only 183 homes for sale. Which was 60% less inventory, and yet, there were 188 sales, 23% higher.

Condo inventory at the end of 2019 was a healthy 482 units. With the first wave of COVID, condo inventory, unlike single family home inventory, surged to almost 750 units by mid-2020. There were 123 condo sales made in the last month of 2019. With travel restrictions in 2020, condo sales slumped to as low as 51 units one month. However, as travel restrictions eased at the beginning of 2021 sales jumped to record highs, exceeding 200 units per month for several straight months.

PENDING SALES:

Pending sales represent the 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 sales at the end of 2019 were 499 units, including 180 homes and 251 condos. At the end of last year, with home inventory 60% less than 2019 and condo inventory less by 72%, pending sales are up in both segments.

However, we are seeing the number of pending sales declining, most notably for single family homes, where the number has dropped slightly month by month since July.

Condos, however, have remained fairly strong finishing the year with 344 pending, yet there haven't been more than 136 units for sale in any month in the last 6 months.

A few Aloha Group Maui pending sales that were under contract within 3 weeks or less of listing.

INVENTORY:

Inventory tells us how many units are available for sale in each category.

It seems like we have covered inventory pretty well. I will just note that in the not too distant past, inventory for both homes and condos steadily ran in the 450 - 550 range. It will be quite some time before we see that level again.

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.

Continuing the 2019 vs 2021 theme, the average selling price for a home back in 2019 was just over $1,000,000 and the median selling price at the end of the year was $740,000.

In the last 6 months of 2021, the average selling price has fluctuated wildly from as low as $1,200,000 up to $1,980,000. The median selling price seems to have settled in at around $1,000,000.

The average selling price for a condo 2 years ago was just over $660,000. In the final months of 2021 the average selling price was over $1,000,000 in 5 of the final 6 months. The median selling prices is up from $514,000 to $700,000.

No matter how you look at it, if you've owned since 2019 or before, you've gained a lot of equity.

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.

In the last few months we've seen some of the lowest days on market ever. This shows us how sales and pending can remain so high, while inventory is so low. There is inventory, but it comes and goes really fast. 

A word about what's ahead.

Demand is still high and interest rates are still near all-time lows. However, increased prices and even the modest interest rate increases we've seen will dampen the enthusiasm of some would-be buyers.

So, does that mean that prices will come down? No.

I don't see any indication of that happening on Maui. On a national basis most of the big names with crystal balls, Fannie Mae, MBA, and so on, think we will still see appreciation in the 4% range.

So, if you are a potential seller, the good news is that you've gained a lot of appreciation and prices aren't likely going down.

If you are a buyer, the good news is that prices aren't increasing as rapidly, interest rates are still near all-time lows and you will likely face less competition when you make an offer. 

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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), Beau Dyer R(B), Angie Liu R(S), Suni Novotny R(S), Keri Nicholson R(S), Myra Plant R(S), Paul Goodman R(B), 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.  

Aloha from your resident experts!

Did anyone else blink and 2021 was over?!? We were hopeful that it would be a better year, and for real estate it certainly was, perhaps even better than we had expected.

Inventory has picked up a little bit in the last quarter, demand for units at Aina Nalu has remained strong, and prices have only continued to increase.

If there is any doubt that it is a Seller's Market, C204, a 2/2 upstairs unit sold in Quarter 1 for $540,000. In Quarter 4, a 2/2 upstairs unit just a few doors down, closed at $700,000. That is a price difference of $160,000!

As you can see, prices are increasing on all units, not just the 2/2 in a great location. As COVID continues to rear its ugly head in apparently an unending chain of variants, it seems more and more people are looking for some place to escape that can also be used as an investment property. As things remain a little uncertain in short-term rentals on Maui, Aina Nalu will only continue to be in demand.

As for real estate overall on Maui, inventory for condos remained steady through Quarter 4. That is pretty amazing since we're selling that many or more each month.

From October 1 to December 31 there were 11 listings and 6 closed sales. There were 0 cancelled listings, and 0 expired listings at the end of the quarter. There were 2 active listings and 3 pending sales at the end of the quarter.

For more Maui real estate information, check out our Maui Real Estate Advisor.

Beautiful sunset photo taken by Don McLeish. It was the most liked photo on our Instagram last month. We'd love to see your photos as well, you never know, you might just be featured on our social media!

Well, this will be the last newsletter of 2021. Another year has flown by and the Maui real estate market is still flying high. More about that when we do the numbers, but first...

In a press conference on November 23, Governor Ige annouced a new emergency COVID-19 proclamation. This one is going the other way. He effectively gave the counties the ability to make their own decisions.

If you heard about the big storm on Maui, it's true. A week ago Sunday, we had a heck of a rain storm (Ok, I can hear you saying, "we need the rain"). In Kihei, the roads were flooded. One vacation resort complex is completely shut down for a while. Kula lost power for a couple of days and the Westside got rain and wind, but besides the downed branches that made a mess, we were pretty okay. By Wednesday morning, it was just another day in paradise.

And in sports, Maui High School's Kaimana Cantere, won the state Cross Country championship. Maui was once again the host of the Xterra World Championships. Hayden Wild of New Zealand won for the men, and gold medalist, Flora Duffy from Bermuda, was the women's champ. And when did this great race occur? Last Sunday, the day of the torrential downpour. These people are tough.

In real estate news, the proposed phase-out of short term rentals, TVR's, in apartment zoned properties is not dead. It is possible that a new proposal could be coming forward. The new proposal is rumored to try and eliminate apartment district properties located outside the 3.2 foot sea rise level exposure area. 

Stay tuned for more Maui and real estate news, sports and weather, but now...

Let's do the numbers. 

Sales:

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 managed to keep their nose just above the 100 sales mark despite our incredible shrinking inventory. How can that be? New listings are hitting the shelves and flying off fast. Thirty-seven homes, 20% of the total inventory, were listed in the last 2 weeks. And, if they re priced anywhere near what most of us imagine the right price to be, they'll be shifted to the "pending" status in the next few days.

Closed condo sales are back up to 151 with no signs of increasing inventory. The story is very similar to the situation with homes. Over 30% of the total inventory has come to market in the last 2 weeks. They come to market and they go under contract. 

So, what does that mean to you? If you're a buyer, come to the market ready to play. If you are getting financing, you need a strong down payment and a pre-qualification letter from your lender. You'll also need some luck. Half of the condo sales were cash deals and 30% of the homes sold, sold for cash. Don't have cash? Don't despair. That also means 70% of homes were financed, as were half of the condos.

Pending Sales:

Pending sales represent the 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.

Believe it or not, pending sales were up for both homes and condos! And while they are up only slightly, they're still up.

On the mainland, winter time usually brings a slowdown in the real estate market. On Maui, winter is referred to by many Maui Realtors as "buying season". And the real buying season usually starts around mid-January. It will be most interesting to see what happens this coming year.

Inventory:

Inventory tells us how many units are available for sale in each category.

Ok, I'm going to stop whining about inventory. Sales are steady, pending are up slightly, and prices? Just wait until you read the next section.

Home inventory does seem to be steadily declining. That should push prices higher still. And while we're still getting multiple offers on homes, even into the $2,000,000 range, we are also seeing what I've heard some refer to as "buyer fatigue". That is something that happens sometimes when would be buyers make offer after offer without winning. The other thing we're seeing are buyers dropping out of the pursuit of a home because they've been priced out of the market.

Condo inventory fell off sharply in July, but has since remained fairly steady between 127 units and 138 units. That is really amazing when we can see that we are also selling that many or more every single month. We are still getting multiple offers and there are still some pretty good buys on the market. They don't last long, but they are there.

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.

After declining for 3 straight months, the average selling price of a single family home surged back to almost $2,000,000. The median selling price is only half that, only he ways, at a measly million. That said, there are currently only 28 homes for sale priced at $1,000,000 or less. 

The average selling price of condos have also been sort of surging. Last month they hit an all time high of $1,114,452. However, the median price has been up and down, month by month. I still think there are some pretty good buys out there.

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.

We report the days on market of properties that have sold. That tells us how long it took to actually sell. However, we also track "active" properties, meaning properties that are either for sale or are under contract, but haven't sold yet.

It is striking to me that days on market for active condos is down to 72 days. In November of 2019, the number was almost double at 135 days. That is just another indicator of how quickly the market is moving right now.

Mele Kalikimaka and Hau'oli Makahiki Hou. Here comes 2022!

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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), 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.  

Is the real estate market slowing down? Nope, just running out of gas.

But first...

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

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:

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:

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.

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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), 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.