Since the shock of the coronavirus pandemic has worn off over the last few months, we've seen that real estate continues to be the most reliable place to invest. Nationwide there has been a real estate boom and while Maui isn't currently experiencing that same type of short term growth, we have seen surprisingly good numbers given the challenges the market has faced with the absence of tourism.
Working From Home
With working from home becoming less of a novelty and more of a reality, many are looking to Maui and Hawaii as the best place to work from home as we see many looking to relocate.
This has been good news for the residential sector of the market. While residential sales and prices have remained consistent year over year for July, the short term condo market has seen a more dramatic decline in sales with the uncertainty surrounding when tourism can reliably resume.
The Big Question...When Will Prices Drop?
I get asked this question by a lot of clients, when will prices drop? We've been expecting the Maui real estate market to cool off even before the COVID-19 pandemic, but even with the challenges presented by the current circumstances, we are still experiencing low inventory and stable prices. At this time we have low inventory combined with historically low-interest rates that are perpetuating the seller's market we've had for the last several years.
The Maui real estate market is one with a high equity percentage and many of the investor owners of our short term rentable condos haven't reached a point of over-extension where they are put in positions where they need to liquify. You can take a look at the current Kihei condos for sale here.
It would be necessary to see a dramatic increase in new properties going onto the market and really only then will we see the price reductions many are waiting for. While sales are down significantly in the Maui condo market, much of that decrease is buyers who are waiting for price reductions rather than a decrease in interest.
Trying To Find A Deal
If you're looking for a deal in this part of the market it's best to take the spread patternapproach by making multiple offers to find which sellers truly need to sell and which sellers aren't in the same position. Maui has proven itself as one of the best places to own a short-term condo anywhere in the world. Not only because of the appreciation and cash-flow potential but it also one of the best places to come and enjoy your investment. If we do see some price reductions, I don't believe it will last very long as the buyers who have been sitting and watching will come out in full force driving prices back to where they were.
The Luxury Residential Market
Cash has been king in this market since the beginning of the pandemic with many great luxury properties coming on the market getting bought rather quickly with full cash offers. In the whole of the residential market over 1 million, average sales prices have gone up significantly compared to July 2019 where the average sales price was 1.395 million versus July 2019 where average luxury residential sales averaged 1.6 million.
The national trend of luxury buyers looking for more remote locales is good news for this sector of the Maui market. The median sales price of all properties is up a staggering 17.5% in July of 2020, this can be attributed to more purchases in the luxury sector.
It's Never Too Soon To Start Looking
As always, I'm available to speak about the market at any point along your journey to find a property on Maui. Even if you're not looking to purchase for several years, it always pays to get to know the market and see how properties are moving.
Get In Touch
Get started on your journey to owning property on Maui by getting in touch with us at Maui Elite Property.