Home prices up to $800K in May amid pandemic
Prices could decline over summer if more homes go on market
A decline in sales and new listings during the pandemic pushed single-family home prices to $800,000 and condo prices to their highest levels in 12 months in May, according to the latest data from the Realtors Association of Maui.
The $800,000 median price for a single-family home was a 13.5 percent rise over the median price of $705,000 at the same time last year, while condominium prices shot up 33.3 percent, from $510,000 in May 2019 to $680,000 this year.
“What’s happening is there are fewer houses on the market, so therefore the prices of the units are going up a bit,” said David Belew, chief staff executive at the Realtors association. “I think when we see more properties in the market over the summer, then you’ll start seeing that number relaxing a little bit, or at least not growing as quickly.”
It’s the second time this year that the median price for single-family homes has cracked the $800,000 threshold; prices reached $837,500 in March. Meanwhile, the median price for a condo in May was the highest it’s been over the past 12 months.
Belew said that the pandemic has “certainly affected” the number of completed sales. A total of 42 sales were closed in May, a 68.7 percent drop from the 134 sales completed in the same month last year. Condo sales have also fallen drastically, from 145 last year to 54 this year, a 62.8 percent decline.
“It’s been a big drop off in business,” Belew said. “We’ve had some agents who are staying busy, going back, following up with clients, making things happen, but it’s certainly slowed down a lot, and we’re hearing that from a lot of our Realtors.”
It’s also been difficult for people who were looking to buy a home just as the pandemic hit and business shut down. With Maui’s unemployment rate the highest in the state at 36 percent as of April, residents likely aren’t in the market for big purchases at this time.
Belew said that a lot of lenders are allowing people to extend their escrow, and buyers “are signing off on that because they need to make sure that their income is steady again before they’re able to complete that sale of a home.”
Other statistics also show the impacts of the pandemic. In May, there were fewer new listings and less inventory, and homes were staying on the market longer. New listings of single-family homes were down from 116 last year to 98 this year, pending sales went from 110 to 79 and the number of homes for sale declined from 485 to 410. Homes that sold in May were on the market for an average of 136 days, up from 120 days in May 2019.
As for condos, new listings declined from 160 last year to 130 this year and pending sales tumbled from 129 to 61, though the number of units for sale was up from 528 to 560. Like single-family homes, condos were also on the market longer, an average of 166 days as compared to 129 days at the same time last year.
Affordability also declined, from 49 to 45 in the single-family housing market, an 8.2 percentage point drop, and from 68 to 53 in the condo market, a 22.1 percentage point plunge. (The higher the number, the greater the affordability. An index of 120 means the median household income is 120 percent of what is necessary to qualify for the median-priced home under prevailing interest rates.)
Countywide, the highest number of single-family homes were sold in Wailuku — 12, with a median price of $738,178. Five homes sold in Kahului, with a median price of $670,000. The most expensive markets were Wailea/Makena, where one home sold for $4.36 million, and Lanai, where another home sold for $4.3 million. In Lahaina, three homes sold with a median price of $2.85 million.
The Kihei area sold the most condos at 24, with a median price of $473,750, followed by Lahaina, where 12 condos were sold with a median price of $829,050. The most expensive market was Kaanapali, where four condos sold with a median price of $1.57 million, and Wailea/Makena, where two condos sold with a median price of $1.15 million.
Belew said that Realtors are starting to see some business pick back up as the county reopens but that the housing market likely won’t recover fully until tourism returns and hotel employees return to work.
“I think there’s a chance that if there are people who own multiple condo units that they count on as vacation rentals, those may come on the market because the tourist volume is not going to be here,” Belew said. “And if we get more of those on the condo side, it’s a positive impact on the cost for a consumer.”
* Colleen Uechi can be reached at firstname.lastname@example.org.