The following analysis of select Maui real estate markets is provided by Matthew Gardner, chief economist at Windermere Real Estate. We hope this information can help you make more informed real estate decisions. For more information about the housing market in your area, please contact your Windermere real estate agent.

Regional economic overview

Maui’s employment picture continued to improve in the third quarter, but the pace of job recovery has slowed. This is likely due to the governor’s announcement discouraging tourists from visiting as COVID-19 cases in the state started to rise again. Overall, Maui grew just 600 jobs in the third quarter, compared to 3,200 jobs added in the second quarter. By the end of the third quarter, Maui had restored 12,400 of the 28,900 jobs lost to COVID-19. With employment still down 16,500 from its pre-pandemic peak, there is still work to be done. New cases are starting to slow down, which could lead to stronger job growth in the last quarter of this year, but we won’t see a full job recovery until 2022. Maui’s unemployment rate remained high in September, with 8.1% of the workforce still jobless. However, this is significantly better than last April’s 32.9%. State unemployment stood at 6.6% in September, compared to 7.7% at the end of the second quarter.

maui, hawaii Homes for sale

❱ In the third quarter of 2021, 729 homes were sold, a sharp increase of 49.7% compared to a year ago. However, since COVID-19 took hold around this time last year, this comparison is uninformative. Compared to the second quarter of this year, turnover decreased by 17.1%.

❱ Year-over-year sales were up across the board, with significant growth in South Maui, North Shore and the West Side. In all regions, except the Central region, sales decreased compared to the second quarter of 2021.

❱ The average number of homes for sale in the quarter was 19.5% lower than in the second quarter of 2021. Fewer advertisements would explain the decline in sales between the second and third quarters.

❱ Pending home sales were down 14.4% compared to the previous quarter, suggesting that closings in the last quarter of the year may not show growth.

maui, hawaii House prices

A map showing the percentage changes in the real estate market in various areas of Maui, Hawaii during the third quarter of 2021.

❱ Average home prices in Maui rose 37.8% year over year to $1.419 million. Prices were 2.9% higher than in the second quarter of 2021.

❱ Affordability issues persist and thanks to favorable financing rates and continued low inventory levels, I still believe the island will continue to see price increases. However, the growth rate is slowing steadily.

❱ All markets saw sales prices increase, but the huge increase in the North Shore area is a bit deceiving. With just ten sales in the entire quarter, the 287% increase was an anomaly. Compared to the second quarter, prices rose in all markets except the Central area, but the decline was minimal (-.4%).

❱ Limited offer inventory and solid demand have pushed prices further, but, as I suggested last quarter Gardner report, the pace of price growth is unsustainable. I then said I expected a modest slowdown in the price increase, which appears to be the case.

A bar chart showing the annual change in home sales prices for various areas of Maui, Hawaii during the third quarter of 2021.

Days at the market

❱ The average number of home sales on Maui is down six days from the third quarter of 2020.

❱ The time it takes to sell a home decreased year over year in the South Maui, Central and Up Country market areas, but increased in the West Side and North Shore.

❱ In the third quarter, it took an average of 47 days to sell a home, with transactions happening fastest in the central area and slowest on the western side.

❱ Compared to the second quarter of 2021, market time decreased in the North Shore and Up Country areas, but rose in the balance of the markets in this report.

A bar chart showing the average days on the market for homes in various parts of Maui, Hawaii during the third quarter of 2021.

conclusions

A speedometer chart indicating a seller's market in Maui, Hawaii in the third quarter of 2021.

This speedometer displays the state of the real estate market in the region using housing stock, price increases, home sales, interest rates and larger economic factors.

Maui’s number of homes for sale remains low. This has pushed prices up and down the number of days on the market, both of which are in favor of home sellers. In addition, low mortgage rates are an incentive to buy, especially if buyers believe interest rates will rise (which they have begun to do). On the other hand, lower sales can lead sellers to list their homes more competitively to attract buyers, and this is of course beneficial to home buyers.

Inventory levels are unlikely to rise significantly in the near term, and while I expect price growth to continue to slow, it remains a seller’s market. The pendulum may be starting to move more towards buyers, but not yet. That’s why I left the needle in the same place it was in the second quarter of the year.

About Matthew Gardner

Matthew Gardner - Chief Economist for Windermere Real Estate

As chief economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market at both the local and national levels. Matthew has over 30 years of professional experience in both the US and UK

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees of the Washington Center for Real Estate Research at the University of Washington; and serves on the Advisory Board at the Runstad Center for Real Estate Studies at the University of Washington, where he also teaches real estate economics.

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