“Maui Homes Reach All-time High Median Price; Will the New Owners Stay?”

December 14, 2020

Since the October real estate statistics were released so late in the month, I was not able to include them in the November Newsletter. The report confirms that single-family homes continue to be in high demand; an all-time high median home price of $867,500 was established. Compared year-over-year to last October, this represents a whopping 18.5% increase! Of greater interest, perhaps, is this past February’s median price was $747, 150, thus showing a 13.8% uptick in just six months in spite of the pandemic! This coming at a time when we were experiencing basically a 0% occupancy rate in our vacation rentals, indicating a large percentage of these sales occurred from buyers shopping virtually.
As always, supply and demand played a role in these numbers, and will continue to do so. As I have mentioned in the past, Hawaii in general and Maui in particular have become safe harbor for many mainland residents experiencing Covid-19 spikes in historic numbers. Along with October’s all-time high median price, inventory dropped 30.7% from October 2019, and new listings were down by 29.4%. If you’ve been thinking of making a move to Maui, the longer you wait the higher that number is likely to go in the foreseeable future. Here’s an article worth a read, especially if you are contemplating a move:
“People are Moving to Hawaii to Escape Virus Hotspots. Will They Stay?”

On the other hand, condos continue to not fare as well. Inventory has increased by double digits over the last six months, and when you get to my Covid/visitor occupancy report in a later section of this newsletter you’ll be able to draw your own conclusions. Since not all condos on Maui are zoned or intended for vacation rentals and in many ways function as homes, sales remain consistent though modest with those units. Even though inventory has doubled, prices, for the most part, have not adjusted accordingly. Sales in the “typical” short-term rental units under $1 million remain relatively stagnant. I’ve had this conversation with some of you recently–I keep expecting the “dam to break”, but it hasn’t yet. Stay tuned.

As most of you know, I keep my Newsletters as A-political as possible.  While this is a topic that should fall strictly under the category of “science”, and /or “social science”, it has managed to leak into the realm of politics, as well. No doubt the topic has come into your aura from time to time, and I thought this article was somewhat thought provoking. Please choose to read or not, at your own discretion.

As if things weren’t complicated enough, it seems that the State (our Governor) likes to change the rules every few weeks just to keep everybody on their toes. Prior to the re-opening of tourism (October 15) weeks of discussion had ensued. It was ultimately decided that all visitors, including returning residents, would need to be Covid-19 tested within 72 hours of their arrival by a certified (only) facility at several west coast points of departure. The type of test deemed acceptable was the rather uncomfortable nose swab test and even children over 5 years old would need the test. If test results were not yet available upon arrival, one could stay but would have to quarantine in place until they could produce the certified test results.
There was a fair amount of pushback on that plan as the mayors of Maui, Kauai, and the Big island (Hawaii) opted for a second test upon arrival. The Governor declined that request. Maui and Kauai offered, instead, a voluntary second test which, surprisingly, many arrivals agreed to take. The positive cases that resulted from that were less than 1%.
Then about two weeks ago, two things inexplicably changed. Governor Ige made what appeared to be a unilateral decision that all arrivals in Hawaii (returning residents, tourists, visitors coming to stay with family, essential workers, etc.) would need to have certification that the pre-test results had proved negative. Without that certification, a mandatory 14-day quarantine now applies. Many people without their results have been turned back, or arrested for refusing to comply with the quarantine. In addition, Kauai removed itself from the pre-test program completely, requiring the 14-day quarantine for anyone coming to the island, regardless of pre-test. (note: negotiations are now under way to comply with the CDC recommendation of a 10-day quarantine.) Again, stay tuned.

Has the re-opening of tourism on Maui been successful? “Maybe”, and “maybe”. Again, the “official´ date of the re-opening was October 15. As of November 10 when I emailed my Newsletter last month, I was able to report that the case numbers had changed very little—from an average of 1.3 new cases per day for the six weeks prior to the opening, to 1.8 new cases per day by 11/10. Since the incubation period is typically up to 14 days, 26 days represented a small sampling.

Since then, we have seen a gradual uptick of cases, starting with 3 or 4 per day to where it stands now at an average of 10-12 per day for the past couple of weeks. There are two ways to look at that. While mathematically that represents a 1,000% increase, it’s a relatively small number even for a relatively small island. Based on what’s going on everywhere else in the country, a number hardly worth mentioning.
Even with that, the question arises as to how many of those cases were from people coming to the island vs. community spread. I, for one, do not hear the term “contact tracing” so much anymore so it’s hard to know; is it the same where you are? As I understand it, many of those efforts have fallen flat due to a general reluctance of people wanting to divulge whom they may have been in contact with in recent days (hmmm…).
So that’s the first “maybe”. The second “maybe” revolves around the fact that, in spite of the re-opening, our hotel occupancy rates continue to hover around 20%–just barely enough to keep the doors open, apparently. Similarly, vacation condo rentals are still struggling even more, with occupancy rates in the 10-15% range, all at a time of year when both should be upwards of 80% or more. I checked some calendars on VRBO in complexes that are always well booked, and many calendars are totally empty beyond the Christmas/New Year’s holiday. So, if you are an owner of a unit that is not faring well, for whatever its worth you are not alone!
Note: Dec. 10, just announced—due to double digit daily new Covid cases, Maui Mayor Victorino is shutting down bars for two weeks beginning Sunday, Dec. 13.
Last month’s Featured Listing was in escrow before my Newsletter hit your inbox, so I’ve selected a “just listed today” property for your review!

Not only is this property “Just Listed”, it is also “just fabulous”! With 4 bedrooms and 4 baths, a 1BR/1BA mother-in-law unit on the first level, and 2BR/1BA detached cottage on a gracious 3/4 acre estate, this is so much more than just a home. Original architect Frank Steller captured the essence of Hawaiiana lifestyle and design with this Cedar wood pole home. A true standout in the Maui Meadows tradition of eclectic, unique residences with plenty of room for a pool and/or tennis courts to make it your very own!
Don’t hesitate! Let’s make an offer! $1,550,000!!!
…and will we really miss 2020? What should have been the year of “perfect vision” quickly unraveled before our eyes. Challenging to say the least, life as we have come to know it changed in many ways. The pandemic, economic crises, west coast fires, east coast hurricanes, an election year, put our mettle as a nation to the test.
For me, I’ve become even more introspective than I usually am. I have my moments when I feel a bit overwhelmed by it all. I miss the days when I could catch a matinee movie, indulge in a box of lightly buttered popcorn, let the film encapsulate my attention for a couple of hours. I miss watching a baseball game with real fans cheering in the stands instead of rows of cardboard surrogates. I miss sitting at the bar at Tommy Bahamas enjoying a glass of wine and chatting with interesting visitors on either side of me. And I missed the opportunity to travel to Scottsdale to help my hanai mom celebrate her 105th birthday this past summer.
But, it can only get better. Let’s all try to remember, that in spite of our differences, we all strive for a better life. We all laugh, and cry, feel joy and sorrow, embrace our family and friends, and care about the things that have truly made America great.
Stay safe.
Michael Blaz

Michael Blaz
Maui Realty Associates
(808) 283-9093 cell
(808) 879-5510 fax

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