Fasten your seatbelts; change is in the wind! Frankly, I’m surprised it’s taken so long. In mid-July, I mailed 2,000+ postcards alerting owners of vacation rental condos on Maui what to me was inevitable. After nearly 5 months of a total shutdown of tourism, and with 16,000 vacation rental condos sitting empty, it was just a matter of time before the dam would break, the flood gates would open, and owners would get tired of paying mortgages, maintenance fees, and property taxes—all at a net loss. With a tone of urgency, I encouraged savvy owners to get out ahead of the wave and put their units on the market before it became a tsunami.
I imagined being swamped with new listings and working long hours to keep up with it all. My relatively peaceful and comfortable lifestyle would be a thing of the past; I’d have to hire an assistant or two just to keep up with it all.
Although I did get one very nice listing for my efforts (see Featured Property below) the three other responses I received (out of 2,000) included two asking to be removed from my mailing list, and one informing me that the recipient was deceased.
As it turned out, just two weeks later I was more than vindicated. As the calendar turned to August, I started noticing more and more condos being listed. The final tally was stunning, to say the least. As of July 31st there were 510 condos of all shapes and sizes, price ranges, etc. listed on our MLS. By August 31, there were 761—an increase of over 50%. In a relatively small market like Maui, that may be an all-time high month-to-month differential! The tsunami had begun.
So what does this mean to you, as a potential seller, or buyer?
For Sellers: The median price point for listings in August was $629,000. That reflects values of the nicer 1BR units near the ocean, or older, smaller 2BR units; think Kihei Rd., Lower Honoapiilani Hwy. So far, prices across the board have not taken a downward turn—but they’re not selling, either. If I was a Seller who needed to sell, I would give thought now to the least I would accept for my unit and start there as a listing price. It may cost you less in the long run—get out in front rather than chasing the market down! The other strategy, obviously, would be to simply hunker down, take your losses, and wait for the visitor market to correct itself. Problem with that is, realistically we are looking at 3-4 months or more before tourists are welcomed back without exclusive conditions. Then, as many predict, perhaps another 3-4 years before occupancy rates match 2019 and the island economy rejuvenates.
For Buyers: You are in a much better bargaining position if you’ve been waiting for the right time to be an owner to get into the vacation rental market. If you just want a place of your own for yourself, family, and friends to enjoy–can pay cash, and maintenance fees and property taxes would not be a problem–then you should have a generous selection of properties to choose from moving forward. But if you need to leverage your buying power with financing, smart money would be to ride this out at least well into 2021.
In either case, feel free to contact me with your concerns and conditions and I’ll do my best to steer you in the right direction.
That never-ending question—“When will tourism re-open on Maui?”
If you ask 10 different “experts”—you guessed it, you’ll get 10 different opinions. Gov. Ige has officially extended the 14-day quarantine to Oct. 1st, with comments “not to be surprised if it gets moved back again”. I’ll give you my opinion, then you will only need another nine. The link to this article
from Hawaii News Now actually aligns very nicely with my expectation. Our State and County governments have been steadfast in their effort to minimize health risks for Maui residents rather than force opening up tourism without the proper safeguards. As the virus continues to spike on Oahu I think it will be at least January before anything changes.
To further complicate matters, misinformation has resulted from the constant changes in dates and strategies for re-opening. Many of you may have heard about the plan to pre-test all visitors to the island 72 hours prior to their departure, and if tested negative, the 14-day quarantine would be waived. Although I have one would-be visitor who insists that “the plan” has already been implemented, I assure you it has not. In fact, based on the apparent lack of effort to put all the parts together to make that happen, it seems to have been set aside for the time being.
Although new cases continue to exceed where we were just a couple of months ago, the curve has actually begun to come down a bit. As one might expect the majority of new cases and deaths continue to be on Oahu due to its much larger population base and preferred destination by many entering the islands. The Big Island (Hawaii) experienced several weeks of mid-range double digit cases and their numbers have increased quite dramatically.
While the Governor establishes State-wide guidelines for all islands to follow, the Mayor’s of each island can supplement State restrictions based on a) situations unique to their island, and b) their personal governing style. Maui’s Mayor Victorino takes a more conservative approach than others and as a result minor spikes in cases on Maui are usually minimized very quickly.
August Real Estate statistics now show that sales of single-family homes represent 40% of the sales volume for the whole island, an unusually high number. Many are of the opinion that the low numbers of Covid cases encourage home ownership for those seeking a safe place for themselves and their families to relocate. And with a median home price still well under $800,000, Maui has become affordable compared to many other premium markets!
The owners of this very special Featured Property purchased it the same year I first got my Real Estate license—1989! And, yes, this is the same property I featured last month, as some of you may recall. The reason I am featuring it again, and the reason I mention the date the year the owners acquired the property, is because there’s a story behind it that supercedes even the phenomenal panoramic ocean view, the tasteful remodel, the proximity to the ocean, and all the many amenities Wailea has to offer.
You see, this 2BR/2BA residence was more than just a vacation getaway; it was a home away from home for a very closely knit extended family for many years. Dad was in the military at the time and would be away on tours of duty for many months of the year. Mom would come to Maui and make it her very special place whenever possible. When the three kids (and friends) weren’t with her due to school schedules, she became very active with the Board, initiating a well-received monthly newsletter for owners. Eventually, she became the unofficial “Director of Social Activities” for Wailea Ekahi and was known and loved by all. Since her unit was the nicest in the complex, many of the gatherings were hosted right at her place! And, oh, if those pool parties could talk…
Well, sadly, Dad passed away several years ago, the kids are grown and have their own lives, and Mom is no longer able to travel.
The reason I’ve taken the time to tell this story is to let the lucky next owner realize that this is so much more than just another vacation rental condo in Wailea. When I accompanied the photographer out to the pool area to take some photos, I let the word out that “Jane’s” (name changed for privacy) unit was coming to market. They all knew Jane.
This is a very special place that you can now call your own. You can make it a family gathering place and create your own stories, while you make it your legacy that may continue for generations. And did I mention the views?
This final section is typically saved for “local” news
—concerts, theater, new restaurants, even near-miss (thankfully) hurricanes! The pandemic, of course, has seriously compromised my sources. I chose this piece on Dwayne (the Rock) Johnson
because it certainly is topical and he has roots in Hawaii. My girlfriend is a huge fan (imagine…he’s my competition! LOL) and I enjoy his movies as well. His reputation for being a really nice, very approachable, and very philanthropic guy proceeds him.
Unfortunately, he and his family have all contracted Covid-19. You may want to scroll down to the video to hear (and see) him talk about it.
Mahalo to you all, as always, for following my Monthly Newsletter—I do it all for you! Please try to stay positive as we all struggle through these difficult times. Here on Maui a lot of our active cases are a result of 100 or so people gathering at Little Beach (aka: nude beach) to do a fire dance in a circle on the sand. So please try to avoid those situations wherever you live.