The price of single-family homes in Maui has once again exceeded $ 1 million (USD) as the housing stock continues to decline. This shows a positive trend for real estate in Maui and a good sign for sellers who will see their real estate values rise.
Other areas of Hawaii, such as Oahu and Koloa, are also seeing increased demand as post-pandemic trends continue.
Break a million dollars in Maui
For the fourth month in a row, homes and condos hit a selling price of $ 1.04 million in August. That’s according to the Maui Real Estate Association which recently released its latest findings for 2021.
So far, the market has been warm in the larger of the Maui Islands, with sales in previous months also surpassing the million dollar mark. The midpoints for May, June and July were $ 1.02 million, $ 1.1 million and $ 1.05 million, respectively.
Notably, in May, it was the first time the average selling price on the island has exceeded $ 1 million since 1993. According to the Maui Real Estate Association, the median is the point at which half of homes sold more and half sold less.
For example, in August 2020, the midpoint was $ 799,000. This year, that point has increased by more than 30 percent over the past month. What’s more, the housing stock fell 45 percent during that percentage increase in August. This left a total of 2017 units since the data was taken, meaning this is a sellers market. As a result, buyers are jumping to any opportunity to acquire their own Maui real estate.
The number of days properties are on the market also dropped to 114 days, or nearly 12%. Meanwhile, the close increased 22% to 121 units and pending sales increased to 15% representing 123 units awaiting close.
Good signs for real estate in Hawaii
As the pandemic has caused a massive shortage of supplies and slowed construction, many counties in Hawaii are rebounding. For example, Oahu held the state’s highest midpoint last month at $ 1.05 million. It comes after recently breaking the mid-point of $ 1 million. Comparatively, Kauai recorded a median of $ 912,000 and the island of Hawaii, $ 507,500.
One of the counties that experienced the strongest early growth was Kauai, which includes Koloa real estate. Data from Hawaii Association of Realtors showed that home sales in the county were up 37% from 2020. The midpoint rose from $ 680,500 to $ 985,000, almost double the increase statewide .
Many people also flock to Kauai and more specifically Koloa for its remoteness and privacy away from the cities. Karen Ono, Executive Director of the Kauai Board of Realtors, spoke about the ongoing phenomenon which is an opportunity for some but a disadvantage for others.
“With this COVID thing, a lot of people are trying to get away from their surroundings,” she said. “They see safety in Kauai. But then, with the collapse of the local economy, people (also linked to COVID) who are already residents cannot live here. They don’t have a job. They have to go.
A booming market
An August report from the Maui Real Estate Association said real estate in Hawaii was benefiting from generally positive national trends. Likewise, those who are not ready to buy due to the high selling prices opt to lease instead. This has caused the demand for rentals to skyrocket, which is also due to the generally low supply of housing.
The low supply is mainly due to the limited lots available on the islands, as well as a slow construction industry. Specifically, new construction projects fell 7% nationwide during the month of August. Single-family construction fell 4.5% and multi-family construction, which includes apartments and condos, fell 13%.
The problem is compounded by the effects of the pandemic, such as equipment and labor shortages. This caused many projects to be stalled at least until prices either fell or were completely abandoned. However, shortages also mean increased demand, which can also jumpstart the economy.
This increase in demand, coupled with a rebound in the economy, increases competition even for single-family rental units. With competition comes price increases, with landlords increasing the national median rent by 11.4% in that year.
The uncertainty of the post-pandemic world makes 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 as early as possible.
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