Aloha,

If you own property on Maui, you should have received your property tax assessment by now. Hopefully, you were sitting down (preferably somewhere like pictured above!) when you opened it. Anyone with even a passing interest in Maui real estate knows that prices have increased dramatically in the past few years. However, you might not have noticed that the assessed values did not increase much. The assessed value of one of my condos increased just 2.2% between 2020 and 2022. The market value was up about 50%.

The good news is that the assessed value is up only, if I can say "only", 31.5% in 2023. But even looking at the situation through rose colored glasses doesn't take the sting out of the chunk you new tax bill will take out of your household budget or the hit on the ROI for you investment properties. Price appreciation has slowed on Maui, as you will see in this report, but don't be surprised if your assessed value increase for next year is in the double digits again.

Interest rates have been a hot topic in real estate since they started escalating at the beginning of 2022 when the rate for a 30-year mortgage was at 3.2% according to Freddie Mac. By November, that rate was over 7%.

However, Sam Khater, Vice President of Freddie Mac said, "Turbulence in the financial markets is putting downward pressure on mortgage rates." That's good news, and rates have been coming down. Last week, according to Freddie, the 30 year fixed rates was 6.28%. Some of our Maui lenders are advertising 6% for conforming loans and 5.5% for Jumbo loans. We are even seeing condo-tel rates under 6% again.

And then there is the banking news, the Fed and an economy that keep sending mixed signals, but we can dig into that another time.

So much for the buzzy picture on the economic trends, what are the real estate trends on Maui?

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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 rose to their highest level in 6 months with 72 sales. That was a 64% increase in month-over-month sales; however, sales are still down 30% as compared to March of last year. And last month's bump up may just be a blip on the radar. That's because leading indicators on the trend line such as pending sales and inventory both declined or remained flat for the month.

Condo sales had a big month with 119 sales. We haven't seen that many sales in one month since July of 2022. The 119 sales represent an 80% increase over the prior month, but it is still 35% below the same month in 2022. Pending sales for condos dropped significantly. Inventory was flat, and a long as it's not declining, I think we'll take that as a win.

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Pending Sales:

Pending sales represent properties that are under contract but have not yet closed. Pending are the pipeline that tell us how many sales are likely to happen in the next couple of months.

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INVENTORY:

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

The number of homes for sale dropped 6%, compared to the previous month. While 248 homes for sale is the lowest number in the last 6 months, the trend line is fairly flat going all the way back to July. And it's likely to stay that way as only 75 additional homes, new listings, came to market during the month and there were 72 sales. That keeps our monthly supply of inventory at about 3.5, so it is still a seller's market. 

Condo inventory remained at 210 condos for sale, the same as last month. There were 107 new listings added to the market, but there were 119 sales. So, unless there are significantly more new listings in April, we are likely to see the inventory get even tighter. With less than 2 months of inventory it is still clearly a seller's market for condos. 

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SELLING PRICES: average and median sold price

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 a Maui home shot back to almost $2,000,000. According to statistics published by the Realtors Association of Maui, that is up 9% over March of 2022 and 16.7% for 2023 year-to-date over 2022.

The median home selling price rose 11% from last month. It is also up 1.9% from last March. At $1,150,000 the median selling price for 2023 so far this year, is unchanged from 2022.

while both the average and median selling prices for condos were down compared to last month, they are still up for the year-to-date. Three months into 2022, the median selling price was $750,000 compared to $800,000 this year according to the Realtors Association on Maui.

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DAYS ON MARKET:

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

Days on market in one trend that seems to be running counter to all of the other trends. The average days on the market for a home to sell jumped 32% for the month form 102 days to 135 days. Part of that increase was due to 6 homes that finally sold after being on the market for more than 340 days. One of those homes has actually been on and off the market since 2004, when it was priced at $20,000,000. It sold in March for $20,750,000.

The days on market for condos to sell was also up, and by a crazy amount. By the count in the MLS the average time on market for a condo to sell was 260 days. What!!! Well, mystery solved. There were several closings at new condo developments that put condos under contract as far back as 2018 that just closed last month. That most definitely skews the average.

It does seem that it is taking longer, especially for single family homes, to sell. I'm hearing the same thing from my fellow brokers. I can tell you that historically we agents can usually feel changes in the market before they show up in the numbers.

The fact is that prices on Maui are continuing to rise. You might wonder what is keeping them on the rise? There are a few key factors. The supply of both condos and homes is so very low, and it is hard to envision that changing anytime soon. The economy remains stubbornly strong despite the Fed's best efforts to slow it down. Buyers seem to have mentally adjusted to  today's interest rates. And interest rates don't seem to affect 40%-45% of our buyers, as that is the percentage of buyers for homes and condos respectively who paid cash for their purchase last month.

See you next month.

Its always good to end with a sunset!

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.

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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), Sarah Twitchell 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 2023 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.  

Presented by Aloha Group Maui

Issue 70, Q1 - 2023

Aloha from your resident experts!

February numbers for tourism came in last week and by all accounts both visitor count and revenue spend were way up compared to this time last year, which isn't too much of a surprise. What was interesting is how close numbers were to 2019. Does everyone remember how busy the island felt and how much traffic there was? Spending was significantly higher this year, even compared to 2019 with slight more visitors, and that isn't too much of a surprise either.

Sales activity at Aina Nalu in the last year seems to happen as fast as a unit goes on the market, or in a few cases, faster because the units were sold before they even made it to the market. 

There were no units in escrow at the end of the quarter, and units continue to sell at record prices. 

With the exception of A106, each of the other 3 units sold for about asking price. For comparison's sake, G202 was sold for $750,000 in Q1 2022, and similar unit, G209 was sold for $890,000 is Q1 this year, a difference of $140,000. And the comparison between Q1 2023 and Q1 2021? I102 at $865,000 vs I203 at $485,000 (with consideration of floor level), comes in at a difference of $380,000 in just two years. Wow. It doesn't seem like prices could go up much more, but we'll keep watching and keep you informed. 

From January 1 to March 31 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. 

The headlines are not the story.

As Paul Harvey used to say, "And now, the rest of the story."

For those of you that don't remember or aren't old enough to do so, Paul Harvey was a radio personality who presented his show as news and commentary. He was professional enough to make sure the listeners knew when he was reading the news and when he was giving his point of view.

Last month, National headlines screamed "Foreclosures are up 115%" which, while true, didn't tell the rest of the story. As the chart below illustrates, 2021 had the lowest number of foreclosures since before the Great Recession. So, the eye-popping 115% increase was the gain over the previous year, 2021, which had the lowest number of foreclosures since at least 2000.

For a bit more context, foreclosures listed for sale on Maui were down 66% from January to February. That huge drop in foreclosure inventory was because we went from 3 for sale down to just 1 for sale.

Earlier this week the Maui News trumpeted "Housing sales continue downward tumble." The sub-headline went on with, "UHERO director: Sales across state falling to levels not seen since the Great Recession." Tying together "downward tumble" and the "Great Recession" would make most readers believe that the value of real estate is tumbling down at a rate similar to that during the Great Recession. As any consumer looking for a home or any Realtor trying to help that consumer can tell you, there isn't much for sale and prices are not falling on what is for sale.

Sales have slowed due to lack of inventory. We are also seeing reductions in asking prices, but selling prices are stable or "stablish" for homes and are up a bit for condos.

Read on for the rest of the story.

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SALES:

In February, home sales and home inventory were both down, but pending sales increased. The 44 home sales in February were 25% lower than the previous month. That is actually 10 fewer homes sold than December of 2008 during the Great Recession. Of course, the median selling price back then, at $567,500 was less than half of today's median price. And instead of having 264 homes for sale, there were 1,103 for buyers to choose from.

Condo sales, at 66, were up for the month, and, up from the 36 that were sold in December of '08. The big difference in that there are plenty of people who want to buy condos today, as demonstrated by the fact that we have only 3 months of inventory. In 2008 we had 1,722 condos for sale on the market or 4 years' worth of condos for sale. And buyers back then were a little nervous about investing in real estate.

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INVENTORY:

Clearly the downward tumbling market of 2008 had nothing to do with inventory. Today's slow sales rate has everything to do with inventory. Although, with home sales off 25% for the month and inventory down only 2.5%, but still down, the number of homes being sold compared to the number available for the month indicated we have 6 months of inventory at the current rate of sales. That is, by most measures, a balanced market.

The rest of that story is that of the 264 homes list for sale, 219, or 83%, are priced at over $1,000,000.

Inventory for condos dropped by about 4% last month. However, the number of sales, pending sales and prices were all up. It doesn't seem like today's buyers are nearly as nervous as they buyers during the Great Recession were.

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SELLING PRICES: average and median sold prices

The month-to-month average selling price for a Maui home has been erratic for the last few months as you can see on the pricing chart. The median price has been much calmer, in fact, almost flat over the last 6 months.

The average and median selling prices also tell a story of the huge mismatch in supply and demand. The median selling price indicates demand for homes selling at the $1,076,000 level. The current median asking price for a home is $2,000,000, and the average asking price is $3,952,000.

The average selling prices for condos have also been up and down over the last 6 months, hitting a low at $888,000 in October, and zipping back up to $1.35M in November, then down for 2 months and back up. What a ride!

The median selling price seemed to be on a downward trend, bur then rose 38% month over month. Tune in next month to see if condo prices stay up or if the pricing tide goes out and prices settle back down a little.

The rest of the story

The rest of the story is not so much the devil is in the details, but even factual headlines can be click-bait. And we'll keep digging into the numbers and trends to try and give you...the rest of the story.

It's always good to end with a sunset.

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 2023 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.  

As storms bring freezing weather across the US, visitors flock to Maui. Right now Maui feels as busy as it has ever been based on traffic and parking, especially the parking lot at the Lahaina Safeway. Safeway's parking lot is my visual rule of thumb for just how busy Maui is at any point.

You may have noticed that the cost of "things" in the last year have gone up. If you own real estate on Maui, your property values are up. If you own a short term property on Maui, your revenue should be up as well.

The average daily rate for a "unit" on Maui in January was $426. That is up 20.4% over the rate in 2022, and up 49.3% over 2019. That data comes from the Hawaii Department of Business, Economic Development & Tourism's Hawaii Vacation Rental Performance Report (that's a mouthful). Those looking for a room in Wailea should budget $1,000 per night or more.

I noted that it feels busier, and it is slightly busier based on rental occupancy at a mere 1.3% above last year, but we are actually 17% below 2019 at this time. However, the island is still very busy, and if you are coming over, you should make reservations for activities and restaurants well in advance of arrival.

If you follow real estate, and you must if you're reading this, the press is printing gloom and doom. That may be the case where you are, but it's not the case across the country. And just what is the case on Maui? Let's do the numbers.

SALES:

Home sales on Maui continue to decline. Month over month the number of sales is down almost 14%, with just 58 homes sold compared to 66 in December. The number of sales are down 37% compared to January of 2022.

The outlook for increasing sales is not particularly optimistic based on supply; because while sales are down 37% over a year ago, new listings are down even further as there were 45.2% fewer listings this January than last. 

There are usually more condo sales than home sales. However, as condo inventory refuses to rise, the number of sales continues to fall. In January, the number of sales plummeted over 24% from the previous month. The month's 54 sales were also over 65% lower than last January, when there were 156 sales recorded. 

Just as with homes, the inventory remains stubbornly low as new listings were off 40% from the previous year. 

But there may be a light at the end of this tunnel.

INVENTORY:

Home inventory was flat month over month, but despite the lower number of listings coming to market, the number of homes on the market has been rising slightly month to month since the end of 2022. How can that be? It's simple. The rate of sales has been declining faster than new homes are coming to market.

The decline in sales, even with inventory staying relatively flat, meant that many homes were staying on the market longer than usual. Between August and November, the average days on market for homes sold went from just 97 days all the way up to 153 days. Last month, days on market dropped back to just 119 days. So, despite lower sales, what is on the market that is priced well and in good condition, is still moving pretty quickly.

The number of condos for sale rose 6% last month. Condo inventory has been rising slightly after bottoming out at 155 condos for sale in September. At the end of last month we had 219 for sale, which is still barely 4 months of inventory. It is still a good market for sellers.

SELLING PRICE: average and median sold price

If you listen to the national news you have probably heard that real estate prices have been coming down. That is most definitely not the case for homes on Maui. The average selling prices in January was 43% higher than December. But that is the trouble with averages. January's average is completely skewed by one big sale. And at $32,673,491, that is one big sale.

The median selling price, which we believe to be a better gauge, was up 7%. The median price has drifted up a little bit over the last 6 months, but prices have really been pretty stable. With signs of more buyer activity and continued low inventory there are no visible signs that prices will be declining on Maui any time soon.

Condos are a bit of a different story. The average selling price of a condo was down 3.3%, which could easily be just a normal one month fluctuation. However, the median price was off just over 18%. January was the 3rd month in a row that the median price declined. It has been running in the high $700's to low $800's pretty consistently, so a drop from $856,250 to $657,500 over three months is something to keep an eye on.

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 2023 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.