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Are Prices Going Down? The Odd Case of Kapalua Bay Villas

This is the question that we get asked several times a day: are prices going down? Those that ask this question are either sellers that are considering life style or portfolio changes or buyers waiting for a great deal. The second category is the largest.

One thing to be said about this market is that although one can gather and process data and come up with statistics, the conclusions are quite irrelevant. There are properties that have just sold at record lows (this is the general expectation), while others sold at record highs (while these are not properties that have suddenly become more desirable). The data is too scattered and fragmented in order to come up with a trend and one needs to define their exact segment market, sometimes down to one development only, and look at the intricacies of that market.

Kapalua Bay Villas Building 12

Below is data regarding the Kapalua Bay Villas, a direct oceanfront luxury development in Kapalua, with affluent ownership and highly efficient and well managed HOA (the maintenance fees for 1bd units has been in the $900 range for more than years and they are not expected to go up). Those that do no reside on property full time or do not use the unit a second home, have the option of enrolling in a short term rental program. In a nutshell, this is a desirable location and fairly safe investment. Yet, as you see in the spreadsheets below, the number of days on the market is high and that there were only 3 sales this year.

Ocean Boardwalk and trail fronting Kapalua Bay Villas

Ocean Boardwalk and Trail fronting Kapalua Bay Villa

Kapalua Bay Villas Market Data

Active Listings as of 06/22/2020

MLS # Unit # List Price Bds Bths Liv-SF Days on Market
379091 11-B1 $899,000 1 1 1,006 712
385256 25-G4 $988,000 1 1 1,006 193
385264 12-G4 $995,000 1 1 1,006 193
380931 14-B2 $1,088,000 1 1.5 995 553
380932 19-B4 $1,095,000 1 1 1,006 553
386413 24-G1-2 $1,195,000 1 2 1,093 95
382544 11G3-4-5 $1,200,000 2 3 1,503 427
386399 23-G1 $1,395,000 1 1.5 993 97
382543 11-B2 $1,400,000 2 3 1,503 427
384463 14-B3-4 $1,899,000 2 3 1,935 256

No Pending Listings

The last two sales in this development occurred past March 20th (the day that the stay at home order was announced). In 2019, there were NINE 1bd unit sales, with a median price of $900,000, with the lowest price at $800,000 and the highest at $1,220,000. In 2018, only FIVE 1bd units, sold, with a median price of $940,000, the lowest at $800,000 and the highest at $1,050,000. Basically, the last time one could have purchased a 1bd unit in the $700K was 2017, and the last unit to have sold in the $600K was 2016.

Sold Listings

MLS # Unit # List Price Bds Bths Liv-SF Days on Mk Sold Price Closing Date
386410 37-G2 $699,000 1 1 989 78 $675,000 5/29/2020
385509 29-G5 $825,000 1 2 1,206 164 $755,000 6/5/2020
385536 34-B3 $1,295,000 1 2 1,229 66 $1,225,000 3/5/2020

 Thus, while we see 2 record low sales at Kapalua Bay Villas, I would not conclude that prices have gone down. It simply looks like two sellers with limited holding power and probably no plans to return to Maui. It will be more interesting what the next sales prices are, as the lowest listing price for a 1bd unit is $899K and the median price is $1.088 M.

We are expecting affluent buyers to relocate to Maui.

If you are interested in selling or buying at Kapalua Bay Villas, please let us know.

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