Aloha, I'm Lahaina Lee, and this is your Maui Real Estate Advisor, January 2025 edition. Welcome to 2025, where the sunsets are still stunning, the ocean still sparkles, and the real estate market is still...well, let's just call it "complicated." So grab your coffee, tea, or mai tai (hey, I'm not judging), and let's dive into the highlights (and lowlights) of 2024, along with what's ahead. 

Looking Back at 2024: A Year of Progress and Head-Scratchers

Cleanup Progress: A Round of Applause for the Army Corps

In 2024, the Army Corps of Engineers worked tirelessly to clean up Lahaina, and wow, did they deliver! By year's end, 100% of residential lots were debris-free, with 97% of commercial properties also cleared. Commercial lot cleanup is set to wrap up next month-so we're calling this a big win. Historical gems like Seaman's Hospital and they Bishop House have been stabilized, awaiting restoration permits. Fingers crossed they'll get to shine again soon.

Construction Milestones

The first new homes in Wahikuli, Kahoma, and Lahainaluna broke ground in 2024. The first permit was issued in May. By November - just 15 months post-fire - the first home was completed.

Meanwhile, the county finally started issuing permits on the ocean (makai) side of the highway and they keep trickling in. One lucky home owner on the ocean side somehow managed to get a permit early on and is making great progress. Others are just in the very beginning stages of getting foundations started. Progress is progress, folks.

The Short-Term Rental Saga: Drama, Anyone?

Early 2024 was marked by threats from the governor and mayor to shut down short-term rentals if owners didn't open their doors to fire-displaced residents. Apparently, they weren't talking to FEMA. FEMA was cutting deals with owners of short-term rentals at ridiculously high monthly prices and even adding a few sweeteners.

And almost as quickly as FEMA started negotiating with short-term owners, they stopped. Why? FEMA stated they had enough to fill the housing needs. 

But wait, there's more! That progress wasn't enough to stop the governor or the mayor from continuing to threaten to shut down short-term rentals, and also continued to ask visitors not to come to Maui.

In May, Mayor Bissen proposed phasing out short-term rentals in apartment zones. If enacted, this plan could cost the county millions in tax revenue and the state over $1 billion. No bill has materialized yet, but the drama? Oh, it's alive and well.

The mayor's proposal has yet to be written as a bill. The proposal did get the approval of the county planning commission. However, the county council commissioned their own economic impact report, which was due in December of 2024. At a meeting earlier this month, a spokesperson said they're now expecting the report in March of this year.

These actions have had a devastating impact on Maui's economy. Maui's West Side has been particularly hard hit. 

Tourism and Economy: Ouch, That Hurt

Visitor numbers remained dismally low. According to the Hawaii tourism authority, the number of visitors to Maui during the first 11 months of 2024 were actually lower than the number of visitors during the first 11 months of 2023. Maui is also down 245 from the first 11 months of 2019.

A local property manager reporting on overall occupancy for short term rentals reported that occupancy was barely above 50% for the year. In previous "normal years" occupancy for STR's would range from around the 705 level during the slowest time of the year to 100% during whale season.

Another set of predictions early in the year had to do with interest rates. Expert after expert predicted that home mortgage rates would drop into the fives, 5%. However, as of January 9, Fanny Mae is reporting the 30 year fixed rate is just barely under 7% at 6.93%

Of course there are plenty of real estate watchers who are hoping that rates still decline for 2025. However, with the recent actions and comments by the FED that doesn't seem likely.

All of that is very concerning for rate sensitive buyers, investors and of course to us realtors. It seems that rates, inventory and the economy have had outsized effects on the Maui real estate market in 2024. It has been a wild ride to say the least. 

So, what exactly did a wild ride look like on the way to 2025? Well, we're going to throw a lot of data at you, so grab another cup of coffee or whatever beverage best suits your mood and let's do the numbers.

Real Estate Numbers: The Wild Ride

Condos: A Market in Flux

Post fire in 2023, real estate sales ground to a virtual halt. Especially on the Westside, the Lahaina, Kaanapali side. So with 2023 behind us, most of us were looking forward to a new beginning in 2024. We were also hoping for more inventory. So if you look at the sales trend, you can see that from January through May the number of sales for condos only dropped below 70 units one time in the first 5 months and exceeded 90 condos per month in 3 of those 5 months.

But...

On May 2, Mayor Bissen announced his proposal to phase out short-term rentals in apartment zones on the so-called Minatoya list. Of course, that frightened owners who had purchased condos with the intent of renting for vacation rentals. After all, those condos had always been short-term rentals. They were built as short-term rentals and they are legally allowed to do short-term rental under the county code. Of course, that has had a chilling effect of buyers contemplating buying a property that might decline in value because of its change in allowed usage.

Real estate brokers expected the proposal to have a significant negative effect on condos in apartment zoning. We did not expect the negative effect it had on the entire condominium market. 

In June 2024, the number of condo sales dropped below 70 units for only the second time during the year. There were never 70 units sold again in any month in 2024.

At the beginning of 2024 we were also expecting to see inventory of condos increase. Back in January 2024, there were 374 condos for sale, and we had 92 sales that month. Since that gave us 4 months of inventory and six months of inventory is considered to be a balanced market, we were still in a sellers' market at the beginning of the year. 

While we were expecting to see some increase in the inventory, what we got was way more than we ever expected to have to deal with. In December, we ended the year with 758 condos for sale, and only 52 sales for the month. That gives us almost 15 months of condo inventory. And in the virtual blink of an eye, we had a buyers' market.

Well, it feels like there is more activity, but we shouldn't expect to see sales increasing significantly in the near future. Along with rising inventory and falling sales, we have seen the number of pendings, condos under contract that have not closed yet, drop to only 67 in December. I have only seen pending drop below 200 condos under contract one time in the last 15 year.s 

And how does all of that affect selling prices? In watching the market very carefully to see what is happening, we see asking prices on existing listings being lowered every day. However, you don't see that reflected in the actual selling prices. In December, the median selling price was $874,000. That was up $144,000 over the previous month's low of $730,000.

The average selling price also bounced back from November's $940,000+ to over $1.15 million in December.

If you have ever dreamed of owning something on Maui, now would be a good time to take a serious look. 

Single-Family Homes: Steady but Shifting

Single-family home sales stayed pretty steady throughout the year. Sales ranged from a high of 73 in May to a low of 51 in September and October. That may seem like a wide range, but if you look at the blue line on the graph, you'll see that there's really not a lot of fluctuation in the number of sales.

Inventory is represented by the red line of the graph. You can see that inventory started fairly low with only 225 homes for sale in January and just steadily increased finishing the year with 373 homes for sale. That indicates that we have over six months of inventory and the single-family home market is tilting slightly in favor of buyers. However, Maui real estate supply and demand is very regional. We can touch on that a bit later.

That brings us to pending sales. If you look at the numbers of the green line on the chart, you can see that there was not much variation in the number of pending per month throughout the year. However, what variation there was seems to be trending downward.

So if inventory - supply - is increasing, and demand represented by pending sales and actual sales is trending down, it is reasonable to conclude that we are headed towards a buyers' market.

The purple line represents the median selling price. And you can see that that has a couple of wiggles in it. However, if you look at the chart showing the median prices across the year, you can see that $1.3 million was pretty consistent.

The average selling price on other hand, shows a bit more of a wild ride throughout the year. Those big fluctuations come from sales and the lack of sales in the luxury end of the market.

As I mentioned above real estate activity in each of Maui's regions is different. And whether you are in a buyers' market or a sellers' market really depends on which region you're in.

West Maui currently has 85 homes for sale. There are only 7 pending. The 7 pending represent the sales for the next month to two months. On average, there are only five sales per month occurring on the West Side. That is very clearly a buyers' market. But, before you get too excited, you might want to know that the median asking price for a home in West Maui, is $4 million and the average asking price is $5.7 million. So if you're looking for a great deal on a luxury home, now is a good time to be shopping. 

Central Maui has 66 homes for sale.

There are currently 36 homes under contract that will close in the next month of so. For the last six months about 21 homes per month have been selling in Central Maui. That means there is roughly 3 months of inventory and puts Central Maui firmly in a sellers' market position.

The median asking price is $1.3 million and the average asking price is just over $1.4 million. That makes Central Maui, Maui's most affordable area. And just an editorial note - there is a lot of newer inventory in Central Maui and there are some very nice homes in that $1.3 to $1.4 million price range.

Looking Ahead to 2025

Ok, that's our look back at 2024. 2024 was a pretty bumpy year and I think we can accurately say that real estate on Maui as a slice of the economy was in recession. Looking forward to 2025, there is a lot of uncertainty and clearly a number of bumps in front of us. However, I think it is also going to be a year when we get a lot more clarity. The new administration should be settling in so we should get some clarity on how new policies will impact interest rates. We should get clarity on what is going to happen with the attempt to remove short-term rental rights for the apartment zoned condos on the Minatoya list. We should get more clarity on the plans for rebuilding Lahaina...or not.

Until next time, this is still Lahaina Lee, still on MAUI, still not in Lahaina, but it's a beautiful day in paradise, enjoy if you are here, come visit if you're not. ALOOOHA!

Maui Real Estate Insights and Island Life: Your December 2024 Maui Real Estate Advisor with Lahaina Lee

Aloha! I'm Lahaina Lee and this is your Maui Real Estate Advisor for December 2024. It's the last month of 2024 and that's good cause I can't take no more.

In real estate on Maui, home inventory is up, home sales are up, and condo sales are down, down, down. So how is that affecting prices? Read on and we'll get to that shortly.

But first, let's talk about the recovery. In the last couple of weeks, I've had an opportunity to chat with a few people who have driven through Lahaina on the highway for the first time in months. They were genuinely excited and impressed to see building going on the mauka (mountain) side of the highway.

Additionally, many of the so-called affordable housing projects are taking shape. Driving down from the bypass you can see the new apartments and many of the FEMA and other affordable housing areas that appear almost ready for habitation. That is all great news on the horizon.

On the makai (ocean) side of the highway Lahaina town is languishing. As I noted last month, the current draft plan for Lahaina most notably says the county is waiting for more input. Long time Lahaina town merchants, and certainly residents, feel anxious over the vagueness of this seemingly half-baked plan.

Groups like the Front Street Recovery Group and Lahaina Restoration Foundation advocate rebuilding Front Street as it was, despite outside voices citing sea rise and flooding concerns. Those are legitimate concerns, but 'twas fire, not water, that caused the devastation. There are locations all over the world that have built restaurants and shops on or over the ocean. 

Plenty of outsiders are telling Lahaina residents why they can't rebuild. But if residents and Lahaina business owners are willing to spend their own money and shoulder the risk, who are the outsiders to tell us we can't rebuild?

A thriving Lahaina Town is essential for our economy, tax base, and cultural identity - and we miss it dearly. 

LahainaRecovers.org

And speaking of island visitors, statewide, October saw a 97.3% recovery rate in arrivals compared to pre-pandemic 2019. Maui's visitor count, however, is still down 24% from October 2019. The silver lining? Visitor spending is up slightly (2.3%) from the same period. So, if you're dreaming of warm weather, come visit us!

Speaking of the buyers' market...let's do the numbers.

Condos: A Textbook Buyer's Market

Search Maui Condos for Sale

If you've ever studied real estate and needed an example of a buyers' market, look no further than Maui's condo scene right now.

• Sales: Condo sales are way down, dipping below 50 units in November. It's the lowest number since the Great Recession.
• Inventory: Over 700 condos are for sale, with nearly 15 months of inventory. Pending sales have plummeted to 67, a steep drop form May's 100+ and last year's 156 in November. This is cause for great concern as pendings are the leading indicators of what we will see in the coming months
• Pricing: The median selling prices is $730,000 - the lowest in six months and 18% below October's median. The average selling price also fell below $1 million for the first time this year, signaling a slowdown in the high-end condos sales.

And that is your definition of a buyers' market.

If you're following all the hubbub with the Mayor's legislation proposal and my concerns about the lack of tourism on the West Side, it is notable that in October there were only 11 condo sales on that side of Maui. Of those sales two are zoned apartment and therefore on the so-called Minatoya list. Two others zoned for either owner occupant or long-term rental, and the remainder were hotel zoned or zoned through some other mechanism for short term rental.

For investors or bargain hunters, West Maui condos in apartment-zoned districts offer promising opportunities - negotiate wisely!

Single-Family Homes: A Mixed Bag

Search for Homes on Maui

The single-family home market defies simple labels. It's neither a buyers' nor a sellers' market - it depends on the price point and location.

• Sales: November saw 62 sales, the highest in three months. 
• Inventory: Inventory also rose - that's good news - topping 350 homes for sale at the end of November. That is the highest number of homes for sale in any month this year. In fact, home inventory is up 63% over January of this year and with all that increase it is still a balanced market with 5.7 months of homes for sale.
• Pricing: The median selling price is steady at $1,311,000, with the average just below $1.7 million.

If you're looking for a home that's priced at $1,300,000 or below even $1,500,000 or below you're looking at a sellers' market. Now there are some good buys at that price. I especially like the homes that are being built in Wailuku in a complex called Anuhea. They're nice homes with nice views, offering green spaces and trails.

For luxury homes ($4M+), it's a buyers' market, with 92 listings and just four sales last month. Two of the sales were in Kaanapali, one in Wailea and on up in Kula.

Search Maui Luxury Homes

Looking Ahead

Next month, we'll recap 2024's real estate trends and peek into what's ahead for 2025. It kind of reminds me of that song, you know, in the year 2525. Ok, we're not there yet! Until then, enjoy the holidays, and if Maui's on your mind, know we've got room for you. It's about 80 degrees, the skies are blue, and the ocean's warm - well, mostly.

From the beautiful island of Maui, this is Lahaina Lee saying, Alooooha!

Aloha from Lahaina Lee

Maui Real Estate Advisor ~ November 2024 Edition

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Aloha Ya'll,

November has arrived, bringing its usual mix of gratitude, reflection, and an excuse to eat pie for breakfast. First off, a big mahalo to all veterans and members of the armed services. Your dedication and sacrifice are appreciated more than a sunrise over Haleakala. And let's not forget, it's alos American Indian Heritage Month. Fun fact: many indigenous people and folks of all backgrounds have proudly served in the military. Speaking of service, my grandson, Kevin, has just enlisted in the Navy. Congratulations, Kevin! Now don't forget to write.

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Recover Update: What's the Plan for Lahaina?

Last month, I mentioned the long-awaited draft plan for Lahaina's future. At the time, we were promised it would drop "during the fall." well, good news - it finally arrived! You can check it out at MauiRecovers.org, your one-stop shop for official recovery updates.

The draft outlines 40 projects, covering everything from water management to a business park (because who doesn't love a good business park?). But here's the kicker: the section titled "Rebuild Lahaina Projects" doesn't actually mention rebuilding homes, condos, or commercial spaces. The official stance? "We want more input."

Well, here's some input: the people of Lahaina don't need more brainstorming sessions or bureaucratic yoga. We need shovels in the ground and keys in doors - yesterday.

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Local Businesses: Surviving Against the Odds

While we wait for progress to crawl forward, local businesses are doing what they do best - making it work. Some have relocated, others have popped up wherever they can, like coconuts after a storm. Tourism, the lifeblood of Maui's economy, has taken a bit hit. Visitor numbers are down about 25%, according to the Hawaii Tourism Authority, but if you ask local business owners, it feels closer to 50%. Either way, it's a tough time to be in paradise.

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Real Estate Snapshot: October 2024

Condos: Let's take a trip down memory lane to 2019, the last "normal" year. Back then, 129 condos sold in October. Last month? Only 64 - half the number. Inventory has dipped since. A comparison of real estate in 2019 to today's numbers, really bears out the sentiment of our local entrepreneurs. 

And while my crystal ball suggest that we are turning a corner and improvements is eminent, it's going to be slow.

Pending sales don't really indicate improvement, but they have been consistent for the last three months finishing October with 75. We would like to see that number continue, but early November is looking terribly strong.

On the supply side inventory looks like it peaked back in August. It dropped under 700 condos for sale in October. However, even with that decline, we still have over 10 months of inventory.

If you are a bargain hunter, there are currently over 100 properties for sale at $500,000 or less. A $500,000 condo on Maui sounds like a bargain. 

There was little change in the average selling price of a condo, and the median selling price dropped below $900,000 again so there are some good values out there.

With higher inventory, stable to declining prices, and motivated sellers, the Maui condo market tilts decidedly in favor of buyers at this time.

Homes: In October of 2019, 102 homes sold. Last month? 51. Are you sensing a theme here? Inventory has stayed steady at around 6.5 months of supply. The median selling price has dropped to $1.3 million, but the median asking price stubbornly clings to $2 million. It's a bit like trying to sell coconuts for diamonds - not exactly a match.

Once again, testing the sentiment of our local business owners, when we look at 2019 homes they are spot on. In 2019 there were 102 homes sold on Maui. What is 50% of that? You are correct, 51, exactly the number of homes sold in each of the last 2 months.

With a current inventory level of 332, we have about 6.5 months of supply. Inventory has remained very stable since June, as have sales.

Pending sales did get back up to the 130's with 132 in October, so perhaps the sales level will trend up as well.

However, in early November, we're seeing inventory trend up a little bit, pendings are trending down a little bit, and we still see a mismatch between the price of homes for sale compared to the price of homes that are selling.

The median selling price for a home on Maui dropped back to 1.3 million, matching the median selling price in May. But the median asking price for a home on Maui is still at $2 million with the average asking price over $3.6 million.

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A Call to Visitors: Maui Needs You

Here's the bottom line: Maui's economy thrives on tourism. Sure, not every visitor is perfect (looking at you, sunscreen-on-the-coral crowd), but the vast majority are respectful and much needed. If you've been on the fence about visiting, consider this your official invitation. We miss you. The palm trees are still green, the ocean is still blue, and the temperatures are still a breezy 80-something. What are you waiting for? 

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Final Thoughts

That's the latest on Lahaina's recovery, the economy, and the real estate market. Got questions or comments? Drop them below - I'd love to hear from you. And remember, whether you're near or far, Maui always has a little aloha waiting for you.

Until next time, this is Lahaina Lee saying Aloooha with a smile and a wave. Mahalo for your support, and I hope to see you here soon.

Warmly, 

Lahaina Lee

Some interesting news. They are talking about an inter-island ferry, connecting Lanai, Molokai and Lanai. Meetings are being held next week.

Turning to the Lahaina wildfire cleanup. This graphic is from the Army Core of Engineers and you can find this at MauiRecovers.org.

Just focusing on the highlights you can see the army core has made excellent progress. 1390 of residential properties have been cleared and it says 1384 have been completed. 

102 of commercial properties have been cleared, and 72 are complete, so there is still a lot of work to be done in that sector. Their aim is to be finished by the end of February. 

So this is a great website for keeping us posted on what is happening and it's a place you can visit often to get updates. The big question, the one thing everyone wants to know is after the cleanup, what is the plan?

The county has set up an office to expedite building permits, which sounds great, however, progress is very slow and the office is getting mixed reviews from the locals. There is no plan for central Lahaina as yet. There was a report done back in July that a draft plan would be released to the public in the fall. It is now the fall.

The mayor is holding regular budget meetings that are open to the public to get input for the next fiscal year. That fiscal year begins on July 1, 2025. That is the same date that the mayor and many other council members are hoping to shut down a few thousand short term rentals in West Maui. That is going to put a big hole in Maui Country property tax income.

So it seems reasonable to ask, if you need a lot more money than we have to help rebuild Lahaina, and you're planning to cut off one of the biggest sources of revenue for the island, how is the difference going to be made up? I can only think of one way.

If we're talking about the economy, we have to talk about tourism. According to a report published by the research and economic analysis division of the department of business economic development and tourism of the state of Hawaii, about $.70 out of every dollar spent on Maui comes from tourism.

And tourism is down.

As a benchmark, most organizations are using 2019, the year before COVID, as the primary basis for comparison. Overall, tourism in the state of Hawaii is down over 11.5% compared to August 2019. However, spending is actually up 15%. 

On Maui, the average daily census for visitors was about 47,000. That is down 26% from August 2019. 

For the first 8 months of 2024, there were 1.575 million visitors on Maui. That is down 17.5% from 2023 and over 25% from the first eight months of 2019.

That is the data that has been reported so it sounds like those are the facts.

However, in talking to people who run restaurants, small business owners and managers of short-term rental properties, it feels like business is down about 50%.

In my own, very non-scientific observations that would be anecdotal information, includes the ability to drive up to the gas pump at Costco without waiting in line, and easily finding parking at Costco, Kaanapali Shores, and the local mall areas.

Unemployment on Maui for the last reported month, which was June 2024, is at 4.5%, which is pretty close to full employment. However, unemployment on the other islands is running at about 3%.

So if tourism is down, and spending is down, what do you think is happening to real estate?

Well, let's do the numbers.

Last month, when we looked at condo sales, even though we had 6 sales, a lot of those were from old inventory, so I concluded that we were really looking more like 49 sales. This month, we had 50 sales, so that was fairly consistent. We can see that the inventory stayed over 700, so we still have 14 months worth of inventory.

Now, I'm going to jump down to selling prices, starting with the average sold price. It was a little over $1.1 million in September, compared to over $2 million in August. That big drop-off reflects the closing of all the properties in Wailea and Makena.

The thing that is really interesting about this is that the median selling price stayed at almost $1 million. What's even more interesting is that the median asking price last month was $995,000, while the median sold price was $990,000. So, we keep talking about this being a big buyer's market, but we're just not really seeing that reflected in the numbers.

So that's it for condos. Turning to single-family home sales, we can see that the number of homes sold has been a bit up and down. In June, there were 65 sales. July had 55. August saw 63, and September dropped to 51. So, up and down, up and down. But if we look at the pending sales, in July, it was 132. August dropped to 114, and in September, it went back up to 129. So, maybe we'll see 60 or more sales in October, following the trend set by the number of pending sales.

Inventory is something we always talk about. Home inventory, meaning the number of homes for sale, has been creeping up a little. But in September, it dropped back to 335, so inventory has kind of flattened out. In comparison to sales, we have about six and a half months of inventory. So, from a macro standpoint, the market is actually really balanced.

In terms of single-family home selling prices on Maui, let's look at the average sold price first. Back in July, it was $1.5 million. That rose over to $1.8 million in August and then went over $2 million in September. What's more interesting to me is the median selling price. It went from $1.2 million, to over $1.3 million, and now it's over $1.4 million.

What makes this particularly interesting - though you can't see it here - is that the median asking price for September was $1.426 million, while the median selling price was $1.428 million. So, the selling prices were actually higher than the asking prices. That's a pretty interesting trend in a market where it's really a buyer's market in much of the island.

That's the news on real estate. A little news on the rebuilding process over here on Maui, maybe a few opinions... If you're watching this from the mainland and thinking about coming over, come on over - there's room! Plenty of room at the restaurants too, so come and pay us a visit. If you're here on Maui, I think the economic scene is going to be turning around. We'll get through the elections in November, both local and national, and hopefully, we'll get another rate cut, which will help things out. And as it gets colder on the mainland, we can count on some visitors coming back.

If you're reading this and have any thoughts or comments, drop them below. We sure appreciate it, and we hope to see you soon. From not Lahaina, this is Lahaina Lee saying ALOOOHA.

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), Anthony Freda R(S), Courtney Stice, R(S), Kathy Becklin, R(B), Heather Zidell, R(S), Magdalena Odonnell R(S), Sarah Twitchell 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.  

Aloha From Lahaina Lee

Maui Real Estate Advisor - September 2024 Edition

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What's on Everyone's Mind Right Now?

The Economy.

Right now, the biggest topic across the country, as always, is the economy. Whether you think we are in a recession or not, you're probably right!

Most economists say we're not in recession, but here on Maui, it's a different story. Tourism drives our local economy, and if you've been following the numbers, you'll know that our county is feeling the pinch.

According to the Department of Business, Economic Development & Tourism (DBEDT), visitors to Maui in July 2024 were down 20.1% compared to July 2023 and 23% compared to 2019. Daily visitor counts were also down by 21% in July compared to the previous year. It's no surprise that people are feeling the effects.

On our last trip to Costco for gas, we didn't even have to wait in line at the pump. We just drove right up to fill 'er up. That makes it official - Maui is in a recession.

The sunset is even pretty from the Costco gas line!

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How Does This Impact Real Estate?

The proposed bill to roll back the right to rent 7,000+ short-term condos has many sellers and buyers nervous. Most realtors, especially in West Maui and South Maui, have received THE call from anxious property owners asking if they should sell. But there's no one-size-fits-all answer. The uncertainty in the market is making both buyers and sellers hesitant about making decisions.

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Let's Talk Numbers: Condo Sales

Looking back over the last six months, condo sales have stayed relatively consistent, ranging from 64 to 75 units sold each month. However, the pending sales (properties under contract that will close soon) are telling a different story. We're seeing a slow decline in pending sales, which should eventually be reflected in the sold numbers. But there's an interesting twist - recently closed sales from high-end luxury condos that have been under contract for years are skewing the numbers.

If we exclude these high end condos as outliers, there were only 49 condo sales that were created in this market and closed in August. That brings us down to levels not seen since the 2008 recession.

Inventory or supply, is rising quickly in the other direction, from 473 condos for sale in March to 743 by the end of August. Demand is dropping faster than the sales numbers reflect, while supply continues to rise. 

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Single-Family Homes: Buyers vs. Sellers Market

I've heard a lot of people say that it is a buyers' market for single-family homes on Maui. However, if we look at supply and demand, the sold and the inventory lines, we have almost exactly 6 months of inventory. That is the definition of a balanced market according to the National Association of Realtors.

The number of sales over the last six months has been fairly steady. If we take out July, the number of sales has ranged between the mid 60s and the mid 70s for six months.

Looking down at the pending line, we can see that inventory peaked back in April with 147 sales and has dropped every month since. That certainly indicates that sales in the upcoming months may also decline.

The question mark comes with the inventory. Since April, inventory has increased every month, winding up at 344 homes for sale at the end of August. 

What we can see if we dig deeper into the numbers is that we have a buyers' market in the two most expensive areas on the island, and a sellers' market in the 2 most 'Maui' affordable parts of the island.

The median asking price for a home in South Maui - Kihei and Wailea, is just over $2.1 million. The median asking price in West Maui - Kaanapali through Kapalua, is $5.75 million. In both those areas supply is in abundance.

In Central Maui and Upcountry, we see prices are a bit more affordable at $1.375 million and $1.7 million respectively. Those are both sellers markets with each having, give or take, three months of inventory.

The median selling price on Maui has stayed right about $1.3 million. That is out of reach of most Maui residents. The average selling price over the last six months is interesting in that it has, for the most part stayed below $2 million. That indicates that luxury buyers, those buying homes for $4 million and above, are sitting on the sidelines. What are they waiting for? 

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Looking Ahead: Optimism on the Horizon

While things may seem tough right now, I'm optimistic about what's to come. All the factors that have hurt our economy are coming to a head in the next few months. My crystal ball tells me the worst of this downturn will last no longer than 60 to 90 days, and after that, we'll start seeing an upswing.

For buyers, the next couple of months might be your best opportunity to get into the market before things start picking up again. And for sellers, if you don't have an urgent need to sell, now might be a good time to hold steady.

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That's all for this edition of the Maui Real Estate Advisor. If you have any questions or comments, let us know! 

4087 N Paua Way is located in one of the best spots on West Maui ocean and outer island views.

Nestled just a few feet above the quiet community pool and clubhouse in the gated community of Kapalani Estates, this split-level 5 bed, 3 bath home has 2,502 square feet of beautiful bright open spaces.

The home has gorgeous tiger wood flooring and open beam ceilings creating a warm and modern feel. The large kitchen is equipped with an ocean view, granite countertops, state of the art stainless steel appliances, and plenty of storage. It opens to a spacious great room with room for comfortable seating and a large dining room table.

The focal point of the home, however, is the wrap-around lanai where you can enjoy grilling and eating dinner while watching the brilliant evening sunsets or listening to the birds with your morning coffee. It is the perfect home to entertain family and friends.

The spacious main bedroom opens to the lanai and is en suite, with a luxurious bathroom that features granite countertops and a tiled walk-in shower.

The lower level has an additional 2 bedrooms and 1 bath. There is a large great room with breakfast nook that is ideal for either additional living space or visiting family or friends. It has a separate entrance for more privacy and convenience.

The home has air conditioning, a two-car automated garage system and the added amenities of a community pool, clubhouse and tennis courts. It sits on a huge green space, perfect for any outside game you can dream up. The popular surf spot, S-Turns, is just across the street as well. It is located between Kapalua and Kaanapali, with multiple restaurants, coffee shops, grocery stores and shopping.

Call you favorite Realtor for a showing today!

Cooperating Broker's Agreement is 2.5%

Maui's Short Term Rental Update:

Maui's burning issue and current debate is over whether or not to roll back the law that allows some 7,000+ apartment zoned condominiums to do short term rental. 

For years and years, Maui has had a housing crisis. The crisis was heightened by the Lahaina and Kula fires in August of 2023. In response to outcries for housing, especially in West Maui, the Maui Mayor, put forth a bill to repeal the right of condominiums in apartment zones to do short term housing with the aim of converting those short term rentals into long term rentals or owner occupied condos. 

These condos were in fact purpose built for short term rental, and have always had the right to use their property for vacation rentals. That right was codified into law by an ordinance adopted in 2014 and 2016. 

Earlier this week, the County of Maui planning commission heard testimony from 130 people. Eventually, the planning commission deferred any action and will hear additional testimony now scheduled for July 9. According to estimates, 30-40% were in favor of the bill to roll back the STR's. 60-70% of those testifying opposed to rolling back the STR's.

But even in the polarized atmosphere of those expressing concern that either the continuation or the rollback of these STR's posed an existential threat to them there was one point of agreement.

The agreement is the need for affordable, dignified housing on Maui.

In comments on why we are facing a housing crisis, Mayor Bissen cited, " a myriad of complex issues that have challenged our community for decades." He went on to state "this is a consequence we cannot and should not accept. Our system is long broken and long overdue for change." 

Hallelujah.

For decades, it has been somewhere between very difficult and impossible for builders to build workforce housing. The US Census Bureau noted that housing on Maui was "essentially zero" from 2018 to 2022. 

You can always reach out to us by text or email or drop some comments below. And remember, nobody knows Real Estate on Maui like Aloha Group Maui. ALOOOHA.

Located in Maui Lani, in the desirable neighborhood subdivision, Traditions, 305 Pulihi Street welcomes you in with a beautiful and meticulously furnished home.

This 3 bed, 2.5 bath home has beautiful, modern luxury vinyl flooring throughout for easy care. The immaculate home opens to a thoughtfully designed entryway to keep the clutter of the day contained with built-in shelves. There is additional storage under the stairs, continuing to utilize all the nooks and crannies. You see the care and attention to detail in each piece of furniture selected to highlight the home. With unique touches like the cut koa wood coffee table and the modern breakfast seating nook, this home feels like a luxurious retreat.

The bright and open great room has comfortable seating for movie nights, a dining table for long evenings entertaining and a large kitchen for cooking plenty of holiday meals.

The kitchen is a chef's dream with plenty of storage in the custom cabinetry, lots of counterspace and beautiful updated appliances. There is more seating at the counter for a quick family breakfast, or to linger over a glass of wine with the chef.

Head upstairs to the spacious main room that is en-suite with a large bathroom and a cozy reading nook. The bedroom has a walk-in closet and a view of the spectacular West Maui mountains.

The additional bedrooms have the same bright open feel, and one is set up as a movie room, with soft greys and blues, inviting chairs and more view of the West Maui mountains. The rooms can be used as bedrooms, an office space or an exercise room. Your imagination is your only limit.

The home has a two-car garage with a full-size washer and dryer, built-in overhead storage, air-conditioning and a leased PV system. Conveniently located close to schools, shopping, restaurants, parks and more, this gem won't last long!

Call your favorite Realtor today to schedule a showing!