The following analysis of select Maui real estate markets is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.
Hawaii’s economy offered a mixed bag of growth in the fourth quarter of 2018. Employment declined 1.4% but the unemployment rate was a healthy 2.3%. Over the past year, the economy has shed 9,300 jobs, and annual job gains have been negative for the past three months.
On Maui, employment growth dropped 1.9% and was negative for the whole of the fourth quarter. That said, there are 78,600 persons employed and over 3,400 job openings on Maui. The unemployment rate was 2.3%, up from 1.7% a year ago. The market’s civilian workforce has been in decline since last summer, which may be artificially keeping the unemployment rate low. The contraction in employment during fourth quarter doesn’t overly concern me as it is likely just seasonal.
HOME SALES ACTIVITY
- In the fourth quarter of 2018, 510 homes sold, a drop of 9.4% compared to the last quarter of 2017.
- Two markets saw growth in sales over the same period a year ago. The Spreckelsville/Pala/Kuau market saw an impressive 25% increase in transactions and Wailuku/Kahului saw sales rise by 6.9%. There was a significant decline in sales in Wailea/Makena/Kihei.
- The contraction in sales came as inventory levels dropped by 9.2%. It is possible that this is due to the 2018 volcanic eruption that occurred on the Big Island but, at this point, that is just speculation. I will be watching the data as we move through 2019 to see if this is the case or if there are other reasons for the slowdown.
- Inventory growth slowed, and this lack of choice may be why we saw sales drop. That said, well- positioned and well-priced homes are still selling relatively quickly.
- The average home price in the region rose 3.8% year-over-year to $866,107.
- Affordability is an issue, but the drop in interest rates at the end of 2018 may stimulate buyers. I will be watching the numbers in the first and second quarters closely to see if we experience a turnaround in price growth.
- Appreciation was strongest in the Wailea/Makena/Kihei market, where prices rose by 22.8%. Two areas saw prices rise between the fourth quarter of 2017 and the final quarter of 2018, and three markets saw average sale prices drop.
- The average number of days it took to sell a home on Maui dropped 24 days compared to the final quarter of 2017.
- The amount of time it took to sell a home fell in four markets with market time rising only in the Wailuku/Kahului area, but that increase was a modest six days.
- In the fourth quarter of 2018, it took an average of 67 days to sell a home. The fastest moving market was in Wailuku / Kahului and the slowest was Lahaina / Kaanapali / Kapalua.
- Even with the slowdown in home sales in fourth quarter, housing demand is still there, as the drop in market time demonstrates. I anticipate we will see more activity and rising sales as we move through 2019.
For the fourth quarter of 2018, I have placed the needle in favor of sellers, but the market may be approaching equilibrium. Although there was a drop in home sales and price growth was fairly modest, we saw a small decline in pending sales, which may limit closings in the first quarter of 2019. That said, I remain positive about the longer-term outlook for home prices and demand on Maui.
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governor’s Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
Wailea Realty newly representing Maui’s newest building opportunity. Mahana Estates puts luxury at your fingertips with 51 homesites located across 125 acres in the world-renowned Kapalua Resort. Each of the residences enjoy sweeping views of Kapalua Bay, the West Maui mountains and the renowned Plantation Golf Course.
Located in a gated enclave, Mahana Estates is designed to enhance individual privacy while being just minutes from the sought after amenities of the Kapalua Resort. Lots range from $1.2m – $1.9 million, from 148 sq.ft. elevation all the way up to 748 sq. ft. elevation and varying from 3/4 to 2 full acres of land.
Views are paramount, the palette is exquisite and the lifestyle is unbeaten. Lot 1 is ready to go with a home already built on it and lot 2 is the next up on the roster at $8.7m. Recent reductions on the lots have this slated to be the most epic location for your dream home.
Contact me to discuss these terrific opportunities and how they can work for you. Details here.
Furry friends belong in paradise too! Ever wonder which luxury developments in South Maui allow pets? Take a look at these popular Wailea developments when considering where to purchase a home in South Maui that your pet can enjoy too!
Kai Malu – This is an excellent option for someone looking for more space and to spread out. 150 2-story units total, some with a downstairs master. These sophisticated townhouse style units are built in 2007, with fresh spaces and high ceilings. A refined complex with infinity pool, and pavilion perfet for entertaining and well situated on 25 hillside acres of golf course. You’ll notice many full-time residents in this community, as no short-term rentals are allowed.
Kanani Wailea – built in 2007, 38 home sites on 8 hillside acres. The lowest priced large footprint condominiums in all of Wailea. Over 2000 sq. ft. and starting in the low million range, these have high end finishes and are about half way down the hill so you still catch views and backlit sunsets. A great option for someone who wants the space but not the yard maintenance. No short term rentals are allowed in this gated development.
Keala o Wailea – Built in 2017, there are 69 brand new 2 and 3 bedroom units perched on the hillside just as you come into Wailea. This well thought out development was affordable with pricesstating at 819k, and they were 95% sold when they released the first set of keys last month. New construction is catching a lot of attention in South Maui, and there are 2 left in this location. No vacation rentals allowed.
Makali’i at Wailea – Just breaking ground and already 65% sold, these 68 luxury modern 2-3 bedroom townhouses are starting in the 1.3 range. The team at Armstrong has promised us a “view above the treetops”, and a product much more modern and contemporary than Wailea has ever seen before – think “Andaz”. It’ll be exciting to see what the finished product is like and what kind of owners end up residing there as this one is for long term residents only.
Polo Beach Club – Absolute supreme South Maui complex next door to the famed Fairmont Kea Lani hotel. Built in 1982, this is a 71-unit high rise is on 2.5 acres of the most pristine sandy beachfront. Enjoy an active lifestyle with regular beach walks and picturesque sunsets from your lanai. Well performing short term rentals are generated from this one-of-a-kind location.
Ekahi – From studios, to 2 bedroom townhouse style units, this large development of 294 units graced Maui in 1976. Well located on 34 acres with easy access to the beach, world-class resorts and golf. A great option for one looking for passive income or possibly a place to return to year after year with minimal maintenance.
Ekolu – Known for excellent location and affordability, these 146 units span from small studios to large 2 bedrooms with garden and ocean views. Built in 1979 and on 18 hillside acres of golf course, this is a very desirable place to spend an island vacation, as evidenced by the popularity of short term rentals found here.
Elua – Known for ample sized footprints, some units with independent garages, the easy beach access, and extraordinary views. These 152 larger scale units were built in 1977, and provide easy access to beach walks and activities on 24 acres of South Maui beachfront. Luxury vacation rentals are allowed in this complex.
Wailea Fairway Villas – Newer development built on the top of the hill in 1998 with 118 townhouse style units on 12 acres of golf greens. Higher ceilings and lofts make this a comfortable place for long term living. Stable neighbors with no short-term rentals allowed. These are a great “lock and leave” investment in Wailea.
Wailea Palms – 120 units and 16 2 story units, known as phase 2 of the development allows pets but does not allow short term rentals. Concrete construction keeps the units cool and they’re just a short stroll to Keawakapu beach. Another terrific option for the long-term resident looking to be central.
– The ultimate in South Maui luxury. These front row, high end luxury condominiums are awesome for someone who wants the best in everything. Large floorplans, wide open spaces, and private lanais are what you can expect from these units. Panoramic views from some, reach out and touch the ocean from others… these 130 units are on 28 acres of oceanfront, directly on the beach path in a complex full of amenities for only the most exclusive buyers.
If you’re interested in honing in on the development that is right for you, reach out.
Let’s talk. Aloha, Erica