Honua Kai: Market Update, the Year in Review

Posted by Alex Cortez on Sunday, July 6th, 2014 at 12:04am.

Along with posting updated information on the micro-market via our Honua Kai monthly reports, we also maintain a bird's-eye perspective to have a better gauge of the bigger picture moving forward, not only within its own niche but also (and perhaps more importantly) its place in the overall Maui condo market. And in keeping a diligent watch on Honua Kai in 2014, we have our observations as to the current market, projected trends, and interpretation of sales data.

Now that the first half of 2014 is on the books, including the majority of high season's sales (with the understanding that a few of those may close at a later time), we can use data to objectively substantiate what we have been saying so far this year: The Honua Kai market is on fire, if you are thinking of buying, then do so soon before being priced out. 

First, let's take a look at two metrics that are often viewed as most relevant in quickly evaluating a market with enough sales volume to be applicable: Average Sales Price and Median Sales Price:

honua kai average salesThe first thing that really stands out is the fact that in the first half of 2014, the average sales price jumped by 29% over the previous year. honua kaiYes, 29% which is a quite a significant amount. But of course, many don't like using 'average' because a few sales can skew the numbers one way or the other, preferring the median sales price - but at that, the difference is even more significant, at 40%!!! The median sales price jumped from $775K to $1.087M, marking one of the most (if not THE most) significant increases in the same time period for similar properties in the State of Hawaii. And on a property boasting a plethora of different floor plans, from studios to spacious 3 bedroom residences, another applicable metric is price per square foot, in which we experience an increase from $1,030 per square foot in 1H2013 to $1,154 in 2014. 

The folly in comparing larger sections of time is that smaller increases are less noticeable and it takes a longer period of time to ascertain projected trends. As such, let us examine activity per quarter months, starting from the last closed quarter (2Q2014), the previous quarter (1Q2014) and the same quarter from the previous year (2Q2013). 

sales information honua kaiAt first sight, it seems as though the average sales price jumped inexplicably in the last quarter - however, there is a good reason for that: a couple of very large sales really skewed the numbers. As such, the Median sales price is a better indicator and more succinctly displays the emerging trend. In the 2Q, the median sales price increased from $930K in the same quarter for 2013 to $1.1M. And it is a good sign to see that the growth is sustainable, increasing from quarter to quarter

Conclusion

The Honua Kai micro-market continues its upward ascent, specially as developer units are nearing an end in active inventory. Should one expect continued increases? The answer is yes and no, as one can reasonably expect that there will be a slow-down in the 3rd quarter, as should be expected based on typical tourism cycles and expenditures but from a bird's eye view prices will continue to increase. By the end of 2014, we expect continued upward pressure on values due to decreased inventory that is not sufficient to meet existing demand. For those considering a purchase at Honua Kai, contact us - we are leading experts in the micro-market and can gladly answer any questions regarding the property, valuation, and the overall Maui condo market.

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Specializing in Makena and Wailea real estate, Alex Cortez is fully dedicated to representing his clients ethically and diligently. Contact him at 808.385.5034 or Alex@MauiRealEstateSearch.com for more information.

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