Q3 2021 Maui, Hawaii Real Estate Market Update

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 your Windermere Real Estate agent.

 

Regional Economic Overview

Maui’s employment picture continued to improve in the third quarter, but the pace of the job recovery has slowed. This is likely due to the governor’s announcement discouraging tourists from visiting as COVID-19 cases in the state started to rise again. In total, Maui only grew by 600 jobs in the third quarter, down from 3,200 jobs that were added in the second quarter. At the end of the third quarter, Maui had recovered 12,400 of the 28,900 jobs that were lost due to COVID-19. With employment levels still down 16,500 jobs from the pre-pandemic peak, there is still work to be done. New cases have started to slow, which may lead to stronger job growth in the final quarter of this year, but we will not see a full job recovery until 2022. Maui’s unemployment rate remained elevated in September, with 8.1% of the workforce still without jobs. However, this is considerably better than the 32.9% rate of last April. The state unemployment rate was 6.6% in September, down from 7.7% at the end of the second quarter.

maui, hawaii Home Sales

❱ In the third quarter of 2021, 729 homes sold, a significant increase of 49.7% compared to a year ago. However, as COVID-19 was taking hold at this time last year, this comparison is not informative. Compared to the second quarter of this year, sales fell 17.1%.

❱ Year-over-year, sales rose across the board, with significant growth in South Maui, North Shore, and the West Side. Sales fell in all areas other than the Central area compared to the second quarter of 2021.

❱ The average number of homes for sale in the quarter was down 19.5% compared to the second quarter of 2021. Fewer listings would explain the drop in sales between second and third quarter.

❱ Pending home sales dropped 14.4% compared to the previous quarter, suggesting that closings in the final quarter of the year may not show growth.

maui, hawaii Home Prices

A map showing the real estate market percentage changes in various areas of Maui, Hawaii during the third quarter of 2021.

❱ Average home prices on Maui rose 37.8% year over year to $1.419 million. Prices were 2.9% higher than in the second quarter of 2021.

❱ Affordability issues persist and, thanks to favorable financing rates and persistently low levels of inventory, I still think the island will continue to see price appreciation. However, the rate of growth is steadily slowing.

❱ All markets saw sale prices rise, but the massive increase in the North Shore area is a little deceiving. With only ten sales in the entire quarter, the increase of 287% was an anomaly. Compared to the second quarter, prices rose in all markets other than the Central area, but the drop there was minimal (-.4%).

❱ Limited listing inventory and solid demand have continued to push prices higher but, as I suggested in last quarter’s Gardner Report, the pace of price growth is unsustainable. I said then I expected to see a modest slowing in price appreciation, which appears to be the case.

A bar graph showing the annual change in home sale prices for various areas of Maui, Hawaii during the third quarter of 2021.

Days on Market

❱ The average number of days it took to sell a home on Maui dropped six days compared to the third quarter of 2020.

❱ The length of time it took to sell a home dropped year over year in the South Maui, Central, and Up Country market areas, but rose in West Side and the North Shore.

❱ In the third quarter, it took an average of 47 days to sell a home, with transactions occurring the fastest in the Central area and slowest on the West Side.

❱ Compared to the second quarter of 2021, market time dropped in the North Shore and Up Country areas but rose in the balance of the markets contained in this report.

A bar graph showing the average days on market for homes in various areas of Maui, Hawaii during the third quarter of 2021.

Conclusions

A speedometer graph indicating a seller's market in Maui, Hawaii during the third quarter of 2021.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

The number of homes for sale on Maui remains low. This has driven prices up and days on market down—both of which favor homes sellers. In addition to this, low mortgage rates are a stimulant to buying, especially if buyers believe rates will rise (which they have started to do). On the other hand, lower sales may lead sellers to list their homes more competitively to attract buyers, and this, naturally, favors home buyers.

Inventory levels are unlikely to rise significantly anytime soon, and while I expect price growth to continue slowing, it remains a seller’s market. The pendulum may start to move more toward buyers, but not yet. As such, I have left the needle in the same spot as in the second quarter of the year.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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 Governors 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.

The post Q3 2021 Maui, Hawaii Real Estate Market Update appeared first on Windermere Real Estate.

Q2 2021 Maui, Hawaii Real Estate Market Update

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 your Windermere Real Estate agent.

 

Regional Economic Overview

I mentioned in the first quarter Gardner Report that Maui’s job recovery, which was doing well in the fall of 2020, had started to lose steam. I am afraid this trend continued through the second quarter. Maui added 1,050 jobs in the second quarter, down from 1,100 in the first quarter and significantly lower than the 11,000 jobs that returned in the final quarter of 2020. The Islands’ economic recovery remains fragile. As of early July, travel restrictions have been relaxed for some fully vaccinated travelers. Hopefully this will bring more visitors, which will certainly help the labor market. As of the end of the second quarter, Maui has recovered 13,600 of the 28,850 jobs lost due to COVID-19. There is a long way to go, and the pace of improvement may face additional headwinds with the rise of the Delta and Lambda variants of COVID-19. Only time will tell. Maui’s unemployment rate remains elevated at 10.9% in June, down from 12.7% in March. The state unemployment rate was 7.7% in June, down from 9.1% in March.

maui, hawaii Home Sales

❱ In the second quarter, 879 homes were sold, a huge increase of 146.2% compared to a year ago when COVID-19 was in full force. Sales were up by a very solid 28.5% compared to the first quarter of this year.

❱ Closed home sales rose across the board, with very large increases in the South Maui, North Shore, and Westside neighborhoods. It’s also worth noting that closed sales were also higher across the board compared to the first quarter of this year.

❱ The number of homes for sale remains woefully inadequate to meet demand, with the average number of listings down 58.3% compared to a year ago and 39.1% lower than in the first quarter of 2021.

❱ Pending home sales dropped 19.7% compared to the first quarter, suggesting that closings in the third quarter may not be as impressive as this one.

maui, hawaii Home Prices

A map showing the real estate market percentage changes for various areas of Maui, Hawaii.

❱ The average home price on the island rose 41.6% year over year to $1.38 million and was 11% higher than in the first quarter of the year.

❱ Affordability issues persist, but with financing rates still remarkably favorable and persistently low levels of inventory, I still think prices will continue to rise at above-average rates as we move through the second half of 2021.

❱ All markets saw significant increases in year-over-year price growth, and all but one (North Shore) saw higher prices than in the first quarter.

❱ Limited inventory has created bullish sellers and rising prices, but the market is showing some signs of resistance. Clearly, the pace of price growth is unsustainable, and this will lead to a softening in appreciation—the question is when.

A bar graph showing the annual change in home sale prices for various counties in Maui, Hawaii.

Days on Market

❱ The average number of days it took to sell a home on Maui dropped 16 days compared to the second quarter of 2020.

❱ The length of time it took to sell a home dropped in the Central, North Shore, and Upcountry market areas compared to a year ago, but rose in South Maui and the Westside.

❱ It took an average of 53 days to sell a home, with transactions occurring the fastest in the North Shore area and slowest on the Westside.

❱ When compared to the first quarter, market time dropped in all areas covered in this report.

A bar graph showing the average days on market for homes in various counties in Maui, Hawaii.

Conclusions

A speedometer graph indicating a seller's market in Maui, Hawaii.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Without a doubt, supply levels are not meeting the very strong demand. The modest uptick in mortgage rates in the first quarter was not maintained and rates have lowered again, which undoubtedly has influenced rising demand.

Even with the economic recovery stalling—and COVID-19 cases spiking again—the housing market is still on solid footing. I would be very surprised to see a significant uptick in the number of homes for sale in the coming months, which will clearly favor home sellers. Given these factors, I am moving the needle more in their favor.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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 Governors 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.

The post Q2 2021 Maui, Hawaii Real Estate Market Update appeared first on Windermere Real Estate.

Q1 2021 Maui, Hawaii Real Estate Market Update

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 your Windermere agent.

 

Regional Economic Overview

Maui saw a significant number of jobs return in the fall of 2020, but the momentum did not continue through the new year. In the first quarter, the island saw the return of only 1,200 jobs—compared to the more than 11,000 jobs that returned in the fourth quarter of 2020. Clearly the economy remains in a fragile position and the area is anxiously waiting for tourists to return in greater numbers. The growth in the final quarter of 2020 was a result of relaxed travel restrictions, but rising infection rates on the mainland have led to more restrictions, which has likely impacted the number of jobs returning.

Although the pace of job recovery has stalled, it’s worth noting that Maui has recovered 13,650 of the 28,850 jobs that were lost due to the pandemic. Maui’s unemployment rate was 12.5% in March, down from 13.8% at the end of 2020. The state unemployment rate was 9% in March, down from 10.3% in December. All of the islands continue to suffer from slow economic growth due to the pandemic, but I remain hopeful that jobs will return, and the pace of recovery will pick up speed in the second half of the year.

Maui, Hawaii Home Sales

❱ In the first quarter, 684 homes sold, which was an increase of 25.3% compared to a year ago and 11.2% higher than in the final quarter of 2020.

❱ Home sales were not equally spread across the island, with sales rising in three areas and declining in two. The very small North Shore market saw the largest percentage increase in sales, but South Maui saw the largest increase in absolute terms, with 99 more transactions in the quarter than a year ago.

❱ Listing activity remains limited. The average number of homes for sale was down 29% compared to the same quarter in 2020 and 34% lower than in the fourth quarter of last year.

❱ Pending home sales jumped 52% compared to the prior quarter, suggesting that closings in the second quarter will likely show further improvement.

maui, hawaii Home Prices

A map showing the real estate market percentage changes in various counties on Maui in Hawaii.

❱ Listing activity remains limited. The average number of homes for sale was down 29% compared to the same quarter in 2020 and 34% lower than in the fourth quarter of last year.

❱ Pending home sales jumped 52% compared to the prior quarter, suggesting that closings in the second quarter will likely show further improvement.

❱ Home prices in all markets saw very significant increases, which is likely due to the limited number of homes for sale and demand exceeding supply. The jump in the area’s average price was partly driven by the North Shore market which saw prices rising from $723,000 to $2.7M.

❱ Price growth will continue as we move through 2021, but the frenetic pace is likely to taper somewhat.

A bar graph showing the annual change in home sale prices for various counties on Maui in Hawaii.

Days on Market

❱ The average number of days it took to sell a home on Maui rose 18 days compared to the first quarter of 2020.

❱ The length of time it took to sell a home rose in all markets on the island.

❱ In the quarter, it took an average of 75 days to sell a home, with sales occurring the fastest in the Central area and slowest on the Westside.

❱ Market time also rose four days compared to the fourth quarter of 2020, giving further credence to my position that affordability issues are still outweighing the limited number of homes for sale.

A bar graph showing the average days on market for homes in various counties on Maui in Hawaii.

Conclusions

A speedometer graph indicating a seller's market on Maui in Hawaii.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

As noted in this report, prices have been rising significantly and demand is exceeding supply. That said, market time has risen, which would suggest that it may not be as much of a seller’s market as one might think. I believe that affordability, combined with persistently high COVID-19 infection rates on the mainland, may be keeping mainland buyers away. If I am correct, we should see more buyers as the vaccine is more broadly distributed, which will stimulate the market again.

As such, the market still favors sellers, and I am moving the needle a little more in their favor.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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 Governors 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.

The post Q1 2021 Maui, Hawaii Real Estate Market Update appeared first on Windermere Real Estate.

Q4 2020 Maui, Hawaii Real Estate Market Update

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 your Windermere agent.

 

Regional Economic Overview

COVID-19’s impact on the Maui economy remains significant, and spikes in new infections in the fall have weighed on the job recovery. That said, the latest available employment data (November) showed that the labor market has recovered more than 13,000 of the jobs that were lost. Total employment is still down 14,750 from the early 2020 levels. With jobs starting to return, the unemployment rate on the island is improving but still stands at a seasonally adjusted rate of 16.6%. That is down from the peak of 33.5% but significantly higher than the 2.3% rate last March and the 2.5% level at the same time the prior year. All of the islands continue to suffer from slow economic growth due to the pandemic, but I remain hopeful that jobs will continue to return—assuming new infection rates do not go up again.

Maui, Hawaii Home Sales

❱ In the fourth quarter of 2020, 615 homes changed hands, an increase of 7.5% compared to the same period the previous year, and 26.3% higher than in the third quarter of 2020.

❱ Sales rose in all markets other than the Central area, but the drop there was small in absolute numbers (26 fewer sales). The largest increase in home sales was in North Shore, but all markets other than the Central area saw double-digit increases compared to the final quarter of 2019.

❱ Listing activity rose 5.6% compared to the same quarter in 2019 but was 5.8% lower than in the third quarter. It is interesting that sales rose even with fewer listings, proving that demand is robust.

❱ Pending home sales were 9.8% higher than in the third quarter of 2020, suggesting that closings in the first quarter of 2021 will likely be positive.

maui, hawaii Home Prices

A map showing the real estate market percentage changes in various areas of Maui, Hawaii.

❱ The average home price on Maui rose 21.3% year-over-year to $1.14 million and was 10.9% higher than in the third quarter of 2020.

❱ Affordability remains a significant issue, but prices continue to appreciate, suggesting that demand is still in place.

❱ The increase in average prices was driven by significant gains in South Maui, the Westside, and in the Central area. Up Country also saw decent growth. The very small North Shore market again saw prices drop but I am not particularly concerned given so few transactions occur there.

❱ I expect prices to continue rising, but I anticipate that growth will be modest given that mortgage rates are unlikely to drop much further.

A bar graph showing the annual change in home sale prices for various areas of Maui, Hawaii.

Days on Market

❱ The average number of days it took to sell a home on Maui rose 11 days from the final quarter of 2019.

❱ The amount of time it took to sell a home dropped on the Westside and Up Country but rose in all other areas.

❱ In fourth quarter, it took an average of 70 days to sell a home, with homes selling the fastest in Up Country and slowest in North Shore.

❱ Market time also rose 17 days compared to the third quarter of 2020, giving credence to my belief that affordability issues appear to be outweighing the limited number of homes for sale.

A bar graph showing the average days on market for homes in various areas of Maui, Hawaii.

Conclusions

A speedometer graph indicating a seller's market in Maui, Hawaii.

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.

Price growth has been very significant, which, in concert with inventory limitations, should indicate a seller’s market. However, the increase in market time suggests this may not be the case. The pandemic and affordability are still influencing the direction of the housing market, which should favor buyers. Quite the conundrum!

Overall, I expect well-positioned and well-priced homes to continue to sell, but some of the heat appears to have come off the market. Accordingly, I am leaving the needle in the same position as last quarter’s report.

 

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

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 Governors 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.

The post Q4 2020 Maui, Hawaii Real Estate Market Update appeared first on Windermere Real Estate.