Out-of-state buyers scoop up 30 percent of Maui home sales
Residents grappling with record prices and low inventory
Out-of-state residents bought nearly 30 percent of homes on Maui in the first three quarters of last year, the state’s chief economist said.
Mainland buyers represented 27.4 percent and foreign buyers 1.4 percent, state Department of Business, Economic Development and Tourism Chief Economist Eugene Tian told The Maui News recently.
For more than a decade, out-of-state residents have made up nearly half of Maui homebuyers.
Residents purchased 53.4 percent; Mainland residents, 41.2 percent; and foreigners 5.4 percent from the first quarter of 2008 to the third quarter of 2020, Tian said, citing data from Title Guaranty of Hawaii, which uses the state Land Court reporting.
Meanwhile, prices for single-family homes reached a new high last year. And the climb doesn’t seem to have an end in sight, Realtors Association of Maui President Joe Hogin said Friday.
“We think it’s going to come back down and then it doesn’t,” he said.
The average price for single-family houses on Maui reached a high of $918,338 in the third quarter last year, according to state records that go back to 2008. The average covers 347 units sold.
Maui County median sales prices for single-family homes in October set a new record high at $867,500, according to RAM data that goes back to 1993. The median sales price is the point at which half of the sales sold for more and half sold for less, not accounting for seller concessions, in a given month.
In April 2019, median sales prices for the first time in RAM history broke the $800,000 mark, reaching $819,500.
Since then, the median has risen to $825,250 in August 2019, along with $835,000 in March and $800,000 in May of last year.
Hogin also put the spotlight on low inventory where homes are being scooped up quickly, possibly out of panic.
Inventory, the number of properties available for sale in active status at the end of a given month, had been decreasing month over month since February.
December, though, reached the lowest inventory on record for RAM, which began compiling annual data in 2010. Units numbered just 286 — a 42 percent drop from the same timeframe in 2019.
Inventory had already been dropping in 2019 — where record low months were in the 400-unit range.
“Prices are going to continue to go up,” Hogin said. “If we get a huge inventory of foreclosures, that’s when it will come down.”
Hogin lamented over residents getting into situations with bigger mortgages. Government will restrict residents from working due to the pandemic. When debt must be paid, the government bails out banks — but not residents, who will be forced into foreclosures as the pandemic drags on, he said.
“We don’t even know what normal prices are anymore,” Hogin said. “Normal for my daughter is $200,000, not $600,000 or $700,000. That’s the range with many of the affordable housing projects in the county. It’s not affordable and it’s not helping.”
Overall, Tian told The Maui News that the percentage of out-of-state purchases declined over time.
Out-of-state residents in 2010 purchased 59.6 percent of Maui homes — that percentage dropped to 28.8 percent (27.4 percent purchased by Mainlanders, only 1.4 percent purchased by foreigners) during the first three quarters of 2020.
He said the trend will continue into the future with fewer out-of-state purchases and more local purchases.
“The main reason of the decline in out-of-state purchases is the price difference between Maui and the Mainland,” Tian said.
Average price for Mainland-purchased homes increased 4.1 percent per year between 2009 and 2019 while the average price for foreigner-purchased homes increased at 6.6 percent a year during the same period. Home prices on the Mainland increased only 2.05 percent per year.
“The relatively cheaper price elsewhere may discourage out-of-state people from purchasing homes on Maui,” Tian said.
* Kehaulani Cerizo can be reached at firstname.lastname@example.org.