The price of single-family homes in Maui broke $1 million (USD) once again as housing inventory continues to drop. This shows a positive trend for Maui real estate and a good sign for sellers who will see their property values increase.
Other parts of Hawaii such as Oahu and Koloa are also seeing increases in demand as the post-pandemic trends continue.
Breaking $1 million in Maui
For the fourth month in a row, homes and condos hit $1.04 million in sales price during August. This is according to the Realtors association of Maui which recently released its latest findings for 2021.
So far it’s been a hot market in the largest of the Maui islands, with previous months sales also exceeding the million dollar mark. Median points for May, June and July reached $1.02m, $1.1m, and $1.05m respectively.
Notably, May was the first time the average of sales prices on the island surpassed $1 million since 1993. According to the Realtors Association of Maui, the median is the point at which half of homes sold for more and half sold for less.
For example, during August of 2020 the median point was $799,000. This year, that point rose over 30 percent during this last month. Additionally, housing inventory fell by 45 percent during this percentage increase in August. This left a total of 2017 units since data was taken, which means it’s a seller’s market. As a result, buyers are jumping on any opportunity to acquire their own piece of Maui real estate.
The number of days properties are on the market for also dropped to 114 days, nearly 12 percent. Meanwhile, closing rose 22 percent to 121 units and pending sales grew to 15 percent representing 123 units pending closing.
Good signs for Hawaii real estate
While the pandemic caused a massive shortage of supplies and slowed down construction, many Hawaiian counties are rebounding. For example, Oahu held the highest median point in the state last month at $1.05 million. This comes after only recently surging past the $1 m median mark. Comparatively, Kauai recorded a median of $912,000 and Hawaii island recorded at $507,500.
One of the counties that saw the most growth early on was Kauai, which includes Koloa real estate. Data from the Hawaii Association of Realtors showed that home sales in the county grew 37% from 2020. The median point rose from $680,500 to $985,000– almost double the statewide increase.
Many people are also flocking to Kauai and, specifically, Koloa for its remoteness and privacy away from cities. Karen Ono, executive director of the Kauai Board of Realtors spoke on the phenomenon taking place which is an opportunity for some but a disadvantage to others.
“With this COVID thing, many people are trying to get away from their surroundings,” she said. “They see safety on Kauai. But then, with the collapse of the local economy, (also COVID-related) people who are already residents can’t live here. They don’t have a job. They have to leave.”
A booming market
An August report from the Realtors Association of Maui stated that Hawaii real estate was benefiting from overall positive national trends. Similarly, those who are not ready to buy due to high sales prices are opting to rent instead. This has caused the demand for rentals to “skyrocket” which is also due to generally low supply of housing.
The low supply is mostly due to limited lots available on the islands, as well as a slow construction industry. Specifically, new construction projects fell by 7% nationally during August. Single-family builds dropped by 4.5% and multifamily construction which includes apartments and condos fell by 13%.
The problem is compounded by the effects of the pandemic, such as shortages in material and labor. This caused many projects to stall at least until price went down, or were scrapped completely. However, shortages also mean greater demand which can also jumpstart the economy.
This increase in demand, paired with a restarting economy is increasing competition even for single-family rental units. With competition comes price increases as landlords raised the national median rent by 11.4% during this year.
The uncertainty of the post-pandemic world is making past trends irrelevant and the future unpredictable. With limited housing units available in remote areas such as Maui and Koloa, it may be a good idea to invest sooner rather than later.
Story by Fernando Acevedo
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