It’s July, which means that the real estate market numbers are in for the first half of 2023. Seems like a perfect time to reflect on recent trends here on Maui – and what they might tell us moving forward…
Sales May Be Down, But Values Are Up
We’ve probably all heard the news coverage about how home sales have slowed as mortgage interest rates have risen post-pandemic. Based on numbers from the National Association of REALTORS®, there was a 20% decrease in the number of homes sold in the U.S. between June 2022 and June 2023.
But on Maui (and across many parts of the Hawaiian Islands), home prices have continued a long-term upward trend:
- According to the REALTORS® Association of Maui, the median price for a single-family home on the Valley Isle at the end of February 2020 (just before the start of the pandemic) was $747,150. Three years later, at the end of February 2023, the median price was $1,076,000 – 44% higher.
- Likewise, the median price for a condo on Maui at the end of February 2020 was $555,000 – whereas the median price at the end of February 2023 was $908,000– a 64% increase.
As compared to the first half of 2022, the median sales price for a single-family home on Maui did dip slightly (2.3%) during the first half of 2023 (from $1,177,500 to $1,150,000). But the median sales price for a condo rose 10.7% during the same time period (from $759,000 to $840,000). Taken as a whole, Maui home sale prices were up 5.4% for January through June 2023 versus January through June 2022.
A recent article from Hawaii Business Magazine highlights how truly remarkable the post-pandemic real estate market has been across the Aloha State:
“For the first time in more than a decade, U.S. homeowners with mortgages collectively lost equity in the first quarter of this year, when compared with the same period in the year before. But not in Hawaiʻi: Homeowners here saw the highest average equity gain in the nation.”
Specifically, the average borrower in the U.S. lost $5,400 in home equity between the first quarter of 2022 and the first quarter of 2023 – whereas the average borrower in Hawaiʻi gained $24,900 in equity. For anyone considering a home purchase here, that’s serious food for thought!
How Supply and Demand Could Impact Buyers
If you’ve been following the market, you may already know that like the rest of the country, Maui has experienced a low inventory of homes for sale for quite a few quarters now. But you may not be aware that between June 2022 and June 2023, we saw a 33% increase in months’ supply of inventory for single-family homes – and a 69% increase in months’ supply of inventory for condos. That boils down to a lot more options for buyers!
And there’s something else to consider: it’s likely that many potential first-time home buyers have been waiting for a drop in interest rates before they enter the market – and many current homeowners have been hesitant to purchase a new home at a higher rate. But what happens when mortgage rates inevitably fall again? One possible scenario is that buyers who’ve been on standby will flood the market, which may push home prices up quickly.
The Bottom Line
A final point to keep in mind is that although our current interest rates may have risen from historic lows a couple of years ago, they’re still nowhere near the historic high rates of the early 1980s (around 18%!). So as real estate expert Barbara Corcoran points out, putting all these factors together, now might be “the absolute best time to buy a home.” Buyers can take advantage of today’s home prices and look into refinancing once rates come down again, rather than waiting for rates to decrease and experiencing more competition for higher-priced homes.
Do you have questions about market trends and how they might impact your specific buying/selling situation? Let’s talk – please reach out to me anytime!
Leslie Mackenzie Smith, REALTOR(S), RS-42147
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