Real Estate in the Time of Corona

A client called me less than 3 weeks ago with a question. He asked, "Do you expect to see some good buys because of this virus?" The bars and restaurants were still open, the resorts were open, we even had an outing planned with Marty Dread's cruise. So, my response to that fellow was, "It depends on whether this lasts 6 weeks or 2 months."

Then reality set in. Now only essential businesses are open. We are sheltering in place and the streets are as empty as we've ever seen.

So, what's happening in real estate? The national pundits are opining that the single family home residential market will emerge virtually unchanged. The reason they most often state is supply and demand, the most basic of economic laws.

However, experts are also predicting that areas that are dependent on hospitality industries such as tourism, hotels, restaurants and so on, will be harder hit. Does that sound like any place you know?

With inventory having been in such short supply for so long and with interest rates at historic lows, how much will any kind of a slowdown have on Maui's real estate market in the scheme of things? This month's numbers won't tell us much of anything in terms of real estate trends on Maui. The sales that are being reported were already in escrow and close to closing. The same will be largely true of the April numbers. 

Should you be buying now? If you are already in escrow and buying for the long term, the answer is yes, especially if you are financing the purchase. It's likely that rates will start to climb again as the economy starts to recover and any savings you might achieve from a slightly lower purchase price later could be more than offset by an increase in rates. See the 1% equals 10% rule. *

If you are/were on the verge of buying on Maui, the law of supply and demand is still in effect. If you find the property you're looking for then negotiate your best terms, take advantage of interest rates, and enjoy your home or condo for virus free years or decades to come.

Sales:

Both single family home sales and condo sales rose for the month. The number of condo sales in March, at 156, tied the highest number of sales in any month this year. We already know, based on the number of pendings, that record sales numbers won't continue. However, the decline in sales was already set to happen based on the lack of inventory.

Pending Sales: along with other key statistics, are detailed below.

Pending sales represent properties that are under contract but have not yet closed. Overall, pending sales spiked in February, rising to 608 total units. We hadn't see 600 pending in a very long time. In March, the number came back to an earth dropping 469. Total pendings were in the 400's in 4 of the last 7 months. So, despite the dramatic monthly change, the number isn't particularly remarkable. 

The big decline came in condo pendings dropping from 306, a spike, in February, to just 202 in March. However, there were only 208 condos pending in August, and pendings remained low in September and October until the run up in November. It's also important to remember that many of the sales that accounted for a record setting March were pendings in February. 

Inventory:

Inventory tells us how many units are available for sale in each category. Home inventory declined for the 4th straight month in March. And, based on sales levels, it is still a seller's market. With just 424 homes for sale, that is only enough to last 4 3/4 months. Despite a significant rise in condominium inventory there is still just over 3 months of inventory on the market.

Supply and demand still comes into play.

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 median is less likely to be skewed by outliers of a few very high-priced or very low-priced sales. This will be really interesting to watch over the next few months. The average selling price for a home on Maui jumped to over $1 million in March, shooting up to $1,214,939. The median price jump was even more impressive soaring to $844,000, the highest number this year. 

Condo selling prices were similarly impressive, with the average selling price reaching almost $800,000. The median selling price slipped slightly, but very slightly, less than 1%, to $552,500.

Days on Market: (avg-sold listings)

The days on market is the number of days a property has been on the market until close of escrow. That number seems stable. Normal financed sales take 45-60+ days, so on average homes and condos are on the market up to 100 days before they go into escrow. I believe we are still seeing a downward trend in days on market. The reason for this is the competition for well-priced listings with strong demand.

* The 1% equals 10% rule states that for every 1% increase in interest rates you lose 10% in buying power. 

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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 our 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: Angie Liu R(S), Beau Dyer R(B), Cheri Miller R(S), Keri Nicholson R(S), Paul Goodman R(B), Suni Novotny R(S), and Tony Brow R(B). We are business people, 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 on 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 fi you are buying property on Maui, it is 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 with both Steve's were there (Job and Woz). She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.

Lee, Barbara and the team are licensed under Keller Williams Realty Maui.

If you like "NEW", you will love this beautiful condominium at the "brand new" Napili Surf on the southern tip of Napili Bay, the best bay on Maui and the place where everyone wants to be. 

Napili Surf 219 is an extremely rare, upstairs unit, smack in the center of the Lokelani building overlooking sandy Napili Sandy Beach. Napili Surf 219 has arguablyr0ew the best view of any condo at Napili Surf. You can sit on your lanai and take in the view of Napili Bay and the island of Molokai. Napili Surf 219 is comfortable and spacious.

The unit and the whole complex have just finished a year-long complete renovation. Napili Surf's new interior has been completely updated and modernized. The full kitchen has all new cabinets, stainless steel appliances and beautiful granite counter tops. The bathroom has also been fully redone. You will love the large walk-in shower. The vanity matches the kitchen cabinets right up to the granite tops. There is a full size dining table inside, but you may choose to dine on your lanai and take advantage of the view. 219 has a full size galley kitchen will full size appliances, not the shrunken down kind you find in many smaller studios on Maui.

From Napili Surf 219 you are just steps away from one of the best beaches in the world and the bay is full of beautiful fish, corals, turtles and other cool underwater stuff. You will enjoy spectacular sunsets and frequently the turtles will come up to greet you as the sun goes down.

Napili Surf is located in the heart of Napili and is located within a short distance of a grocery store, coffee shop, restaurants, some beautiful walking trails and the Kapalua resort area.

Extremely rare slice of paradise right on Napili Beach in the middle of Napili Bay at the beautiful Hale Napili. This boutique condominium complex has the charm of old Hawaii - the way Maui used to be, without the crowds, without the hurry. There is a beautiful new grass lawn in front of the beach at the property. This boutique resort is intimate and low density with only 18 units on site. You'll feel like you are in your secret spot.

From your comfortably appointed studio you have a view of the lush green palms out your window and on your lanai. From the lanai you have a lovely ocean view. Hale Napili went through a major upgrade/renovation in the recent past. Unit 17's kitchen and bathroom were completely remodeled, with new appliances, tile floors, granite countertops, upgraded cabinetry and a large step-in double shower tiled area. Unit 17 also has new carpet and new sliding door treatments (vertical blinds/shades).

Other recent upgrades include the installation of air conditioning system in each unit, and a keyless entry system (added in 2019) with a keyless security system at the entry gates and the gate to the ocean. The art, which is all new, includes photographs printed on aluminum; framed Hawaiian bird prints, a framed limited edition print by Kathleen Alexander, and a framed photograph of a whale.

With every visit it will feel like you are coming home. You can relax and casually watch the sunsets, the whales, the turtles and the people at play in the surf and on the sand of Maui's favorite bay.

This Kaanapali Royal condo lives like a house. At 1,467 sf, it's even larger than many of the houses on Maui.

And the 1,467 sf doesn't even include one of the best rooms in the house, I mean condo. That's because one of the best rooms is the expansive lanai. According to the public record this lanai adds another 380 square feet of fabulous outdoor living space. It takes advantage of Maui's wonderful indoor/outdoor living for dining, cooking, and just plain relaxing. At Kaanapali Royal you can even grill on your lanai. And you can enjoy the grand lanai, one of 3, in the condo all day long and into sunset since it doesn't get hit by the hot Maui sun like so many lanais do. Just relax and enjoy the caressing Maui breezes.

The interior of the unit also matches the quality of a luxury Maui home. Dubbed "Turtle Villa", this Kaanapali Royal unit was renovated down to the bones with one-of-a-kind touches that reflect a Maui lifestyle. The living room is a huge room that opens onto the lanai. It can be utilized in so many ways. It could be a living room, a media room or many owners section off a small space at one end for an office or a game room.

The kitchen has been redone with rich looking wood cabinets topped with natural looking granite reminiscent of the surf and sand at the nearby beach. The floor is finished with natural tile.

The master suite is privately located upstairs and has its own lanai, a quiet private space away from the rest of the unit. The master bath has been beautifully furnished with a new wooden vanity, granite and a stylish basin bowl sink. The luxurious oversize shower features a customized walk-in-rain/spa with a pebbled floor and a honu (Maui sea turtle) etched into the wall. The second bedroom is on the main living floor. It is also en-suite and has a private lanai.

The property has tennis courts, a beautiful resort pool and is right on the Kaanapali Kai Course. Whalers Village along with Kaanapali Beach and all the shops and restaurants is just across the golf course.

Honua Kai is the idyllic luxury Maui resort. Located on the North end of world famous Kaanapali beach it offers guests and owners alike the quintessential Maui dream, with plenty of swaying palm trees and sparkling turquoise water. 

The Konea tower, where 520 is located, is on the quiet, private side of the resort. There are spectacular West Maui mountain views that extend all the way to Kapalua in the distance.

You enter through a large entry into a bright and airy room and because of its unique corner location there are extra windows to let in more light. There are bi-fold retractable doors in both the living room and master bedroom that open completely to allow Maui's best indoor/outdoor living. The lanai spans the width of both the living room and the master bedroom creating another 900 square feet of living space.

The floors have been updated to "better than hardwood" wood grain porcelain floors throughout the living area and bedrooms, which are designed to stand up to rental traffic and remain beautiful for decades.

The kitchen and bathrooms have porcelain tile floors which help keep the condo cool on the hotter days. The two bedrooms are both en-suite and the luxurious master bath has a separate shower and contoured soaking tub. It also has a nice vanity with a large dressing mirror and granite counter tops with double sinks. The guest suite features the same floor to ceiling windows as the living room with the spectacular West Maui mountains highlighting the view.

The gourmet kitchen is outfitted with Bosch stainless steel appliances and beautiful granite countertops. It is situated so the chef never has to miss out on any conversations happening in the living room or any moments in the big game. There is an island creating a divide between the dining area and the kitchen while also providing more counter space to create mouth-watering meals, or to set out breakfast while you enjoy sunrise with a cup of coffee on the lanai.

The kitchen, dining and living area are set up in a great room style. The living room has a comfortable sleeper sofa, side chairs, and a flat screen TV.

There are multiple resort style pools on the extensively manicured grounds for you to explore. There is also a boutique spa, a great workout room, several different markets, underground parking, free valet for owners, security, and Duke's Beach House restaurant on property.

Honua Kai sits on almost 40 acres of beachfront property and is located between the Kapalua resort area and Lahaina, both of which have a variety of restaurants, grocery stores and shops. Though, with all the amenities on property, you may just never want to leave.