There is a lot going on in the world right now, and a lot of armchair experts out there. I hear all sorts of reasons why people should wait to purchase real estate, why this is the best time to sell real estate, the list goes on and on. Lots of people are worried about interest rates. Lots of people are worried about the mid-term elections, taking place as I write this. But one thing that should help people understand better about what is going on in the Maui real estate market are facts.
But First a Story…
First I want to share a story that just happened to me last week. A vacation rental studio got listed at the Maui El Dorado for $399,000 leasehold. You may not remember that a leasehold property basically means that you own the real property, but not the land. The land is leased, and the lease eventually will expire or get extended. There’s a bit more to it, but that’s the gist. Due to the nature of the leasehold, many people will shy away from purchasing them.
Well this Maui El Dorado studio gets listed, and I have not one but two clients that want to make an offer. One of them eventually wasn’t fully ready financially so they decided not to move forward. But the other ended up putting in an all cash offer just shy of the asking price. We were asked a day later to put in our “highest and best” offer because there were multiple offers just like ours. Wait, I thought the world was ending?
Ultimately, they did not accept our offer and went with another. It has not closed yet so I do not know the sales details except it was at or over the asking price and all cash.
Condos Are Selling
I tell this story because it drives home a very real point — Maui condos continue to sell. What is especially true, Maui condos under $1,000,000 that are allowed to do vacation rentals are receiving multiple offers.
I believe there are a number of reasons for this. Many people missed out in the feeding frenzy last year. There were many people that could not compete with so many all cash, way over asking offers. Sometimes, by the time the offer was written and signed, they’ve already accepted another.
Another reason, is with rising interest rates, people are qualifying for less so the lower priced condos are going first. Although to be honest, there is also still a lot of cash coming into the islands so interest rates are not even affecting many buyers.
And probably most importantly, Maui’s condo inventory continues to be at an all-time low. Supply and demand. There are still buyers and very little to buy. So when an affordable vacation rental comes up, it is selling.
Here are some facts. In October 2022, 62% of condo sales were at or over the asking price. And 44% of all condo sales were all cash deals! Although the total dollar volume ($1.485 Billion) was down 22% from October 2021, that is to be expected. Last year was a feeding frenzy and were are experiencing some market stabilization right now.
The median sales prices in the third quarter of 2022 was $770,000. This is up 19% from the third quarter of 2021 ($645,000). The number of sales are down 30%, but again this goes back to what a crazy time it was last year. Median days on market this year is 64, compared to 86 last year. That’s a good stat if you are looking to sell your condo!
The Bottom Line
If you want to sell your Maui condo, there’s a good chance it will sell fairly quickly. Prices are stabilizing, but still have not dipped too much. If your condo is under $1M, there is still a lot of demand due to the lack of inventory in this price range.
If you are a Buyer, the feeding frenzy is over, so there is some more room for negotiation. However, if you are looking for a vacation rental under $1M, be prepared to move quickly.