Maui Million Dollar Home Sales ($1.0M+) – Day 10 of 10 – “Ocean Frontage”

September 28, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.  There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Today marks the last day of my series on Maui’s high-end luxury homes.  I had to testify in a ground rent arbitration yesterday, so this article is coming a day late.  Thank you so much for reading along with me.

Day 10 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Ocean Frontage Type

Consider the following graph and chart, which categorize Maui million dollar home sales by their ocean frontage (or lack of it):

Maui Million Dollar Home Sales By Ocean Frontage Type

Maui Million Dollar Home Sales By Ocean Frontage Type

Maui Million Dollar Single Family Homes By Frontage
Sold From 1/1/2012 through 9/16/2013
Frontage Type # of Sales % of Total
None 183 79.2%
Ocean Front/Beach Front 25 10.8%
Across Street from Ocean 23 10.0%
Total 231 100.0%

As shown, just over ten percent of the million dollar plus home sales on Maui front the ocean while another are located across the street from it.  But the balance of the Maui luxury residential market is located mauka, or toward the mountains.

Bottom Line: Not every million dollar home on Maui is on the beach–the large majority are located on interior lots.

I hope you’ve enjoyed reading this “mini-series” of posts, it was fun to assemble and provided a few insights that I wasn’t expecting, particularly the days on market figures that showed reasonably fast absorption of most Maui high end properties.

Questions or comments?  Please leave them in the comment  box below, I would be happy to clarify and/or expand.

Aloha, Chris

 

 

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Maui Million Dollar Home Sales ($1.0M+) – Day 9 of 10 – “How Long Did They Take To Sell?” (Days On Market)

September 26, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.  There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Day 9 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Days On Market (DOM)

Consider the following graph and chart, which categorize Maui million dollar home sales by the amount of time they were on the market before being sold (converted to months):

Maui Million Dollar Home Sales By Days On Market (converted to months)

Maui Million Dollar Home Sales By Days On Market (converted to months)

Maui Million Dollar Single Family Homes By Days on Market
Sold From 1/1/2012 through 9/16/2013
Days On Market # of Sales % of Total
0-6 Months 114 49.4%
6-12 Months 74 32.0%
12-18 Months 23 10.0%
18-24 Months 5 2.2%
24-36 Months 3 1.3%
36-42 Months 7 3.0%
42-48 Months 1 0.4%
48-54 Months 3 1.3%
54-60 Months 1 0.4%
Total 231 100.0%

I was a little surprised by the results of this analysis.  My experience with the high end residential market is that marketing times of over one year are not uncommon (and at 18.6 percent, its not exactly unheard of, but certainly not the norm).  I suspect two elements are at play: (1) the “under 3.0 million” market is probably responsible for the majority of quick sales, and (2) the Maui luxury market has been heating up, especially since January 1, 2013–fueling absorption.

Bottom Line: Price your Maui million dollar+ home right, and it should sell in under a year.

Questions or comments?  Please leave them in the comment  box below, I would be happy to clarify and/or expand.

Aloha, Chris

Bonus: Marketing Time

marketing time
An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal.

Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010).

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Maui Million Dollar Home Sales ($1.0M+) – Day 8 of 10 – “How Many Bedrooms Do They Have?”

September 25, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.  There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Day 8 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Bedroom Count

Consider the following graph and chart, which categorize Maui million dollar home sales by the number of bedrooms in their floorplans:

Maui Million Dollar Home Sales By Bedroom Count

Maui Million Dollar Home Sales By Bedroom Count

Maui Million Dollar Single Family Homes By Bedroom Count
Sold From 1/1/2012 through 9/16/2013
Bedrooms # of Sales % of Total
1 2 0.9%
2 20 8.7%
3 88 38.1%
4 82 35.5%
5 29 12.6%
6 9 3.9%
7 1 0.4%
Total 231 100.0%

Bottom Line: No Need To Remake Buckingham Palace

The vast majority of million dollar homes sold on Maui have just 3 or 4 bedrooms.  Maybe not impressive on MTV Cribs, but obviously enough for hundreds of wealthy second home buyers.

Questions or comments?  Please leave them in the comment box below, I would be happy to clarify and/or expand.

Aloha, Chris

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Maui Million Dollar Home Sales ($1.0M+) – Day 7 of 10 – “When Were They Built?”

September 24, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.  There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Day 7 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Year Built

Consider the following graph and chart, which categorize Maui million dollar home sales by the year of their construction:

Maui Million Dollar Home Sales By Year Built

Maui Million Dollar Home Sales By Year Built

Maui Million Dollar Single Family Homes By Year Built
Sold From 1/1/2012 through 9/16/2013
Year Built # of Sales % of Total
1920-1929 1 0.4%
1930-1939 4 1.7%
1940-1949 1 0.4%
1950-1959 10 4.3%
1960-1969 3 1.3%
1970-1979 18 7.8%
1980-1989 35 15.2%
1990-1999 40 17.3%
2000-2009 107 46.3%
2010-2019 12 5.2%
Total 231 100.0%

More than 50 percent of the Valley Isle’s million dollar home sales have been built since 2000, with 84 percent constructed since 1980.

Bottom Line: Newer is better, no surprise here.

As wealthy buyer preferences for residential real estate evolve over time, the luxury segment is quick to adapt.  For example, solar energy and “great rooms” are in, rear projection television nooks and galley kitchens are out.

Although they are usually built to high construction standards, an appraiser often observes that residences in the high-end/second-home market can have economic lives that are are shorter than less expensive dwellings–sometimes meaningfully so.  A future article will identify a case study or two where ultra-high end oceanfront homes in Hawaii were torn down for land value/redevelopment, despite being less than 20 years old!

Questions or comments?  Please leave them in the comment box below, I would be happy to clarify and/or expand.

Aloha, Chris

Bonus: Economic Life

economic life

The period over which improvements to real property contribute to property value.

Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010).

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Maui Million Dollar Home Sales ($1.0M+) – Day 6 of 10 – “How much land do they have?”

September 23, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.  There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Day 6 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Land Area

Consider the following graph, which categorizes the Maui million dollar home sales by their lot sizes:

Maui Million Dollar Home Sales By Land Area

Maui Million Dollar Home Sales By Land Area

If you are unfamiliar with the luxury home market in Hawaii, the data presented on this graph might be counter-intuitive.  As  shown, most million dollar home sales are on lots that are smaller than half an acre in size, and only a handful of transactions are on tracts larger than ten acres.

Bottom Line: Once Again, Bigger Isn’t Necessarily Better

Not many people would argue that, all things being equal, more land area is usually better.  But on Maui and throughout the Hawaii high-end residential sector, an experienced real estate appraiser understands that beach frontage and ocean views are the primary drivers of market value.  Since near-ocean properties are typically subdivided into smaller land area configurations, it is easy to see how the most common high-dollar sales have smaller lots.

Questions or comments?  Please leave them in the comment  box below, I would be happy to clarify and/or expand.

Aloha, Chris

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Maui Million Dollar Home Sales ($1.0M+) – Day 5 of 10 – Price Per Square Foot

September 22, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.  There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Day 5 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Price Per Square Foot Of Living Area

Consider the following graph and chart, which measures each of the million dollar sales divided by their respective living areas in square feet:

Maui Million Dollar Sales By Price Re Square Foot

Maui Million Dollar Sales By Price Per Square Foot

 

Island of Maui Million Dollar Single Family Homes By Price Per Square Foot Of Living Area
Sold From 1/1/2012 through 9/16/2013
Price Per Square Foot # of Sales % of Total
$0-$250 2 0.9%
$250-$500 81 35.1%
$500-$750 77 33.3%
$750-$1000 36 15.6%
$1000-$1250 14 6.1%
$1250-$1500 7 3.0%
$1500-$1750 4 1.7%
$1750-$2000 2 0.9%
$2000-$2250 2 0.9%
$2250-$2500 2 0.9%
$2500-$2750 1 0.4%
$2750-$3000 1 0.4%
$3000-$3250 0 0.0%
$3250-$3500 0 0.0%
$3500-$3750 1 0.4%
$3750-$4000 1 0.4%
Total 231 100.0%

More than 90 percent of Maui’s million dollar home sales in the study period fall in the “price per square foot” range of $250 to $1,250, with the $250 to $1,000 range accounting for 84 percent of the transactions.

Maui real estate agents that are active in the luxury sector report that the high-end/luxury market typically begins at the $1,000 per square foot level.  The sub-$1,000 data shows how raw demand for Maui residences generates a great number of high dollar ($1.0 M plus) sales for “less-than-luxury” homes.

The two sales that cleared the $3,000 per square foot level did so for different reasons: one was a prime white sand beach home on South Kihei Road that sold for $23.0 million.  The other was an older/smaller cottage on an amazing 1.1 acre oceanfront lot near Paia–the high price per square foot of living area was due to the largely insignificant improvements on a very valuable piece of land.

Bottom Line: At least on Maui, a million bucks doesn’t go as far as it used to.

At these prices, it is easy to see how a Maui real estate appraiser could be regularly confronted with homes that sell for prices that easily exceed Fannie Mae, Freddie Mac, and FHA conforming loan limits.

Questions or comments?  Please leave them in the comment  box below, I would be happy to clarify and/or expand.

Aloha, Chris

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Maui Million Dollar Home Sales ($1.0M+) – Day 4 of 10 – “Who Sold Them”?

September 21, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.  There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Day 4 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Agent

Consider the following graph and chart, 24 agents have sold four or more “million dollar homes” in the study period (ties sorted by first name alphabetical order):

Maui Million Dollar Home Sales By Agent

Maui Million Dollar Home Sales By Agent

Maui Million Dollar Single Family Home Sales By Agent
Sold From 1/1/2012 through 9/16/2013

Rank
Agent Name		 # of
$1.0M+ Sales
1 Wendy R Peterson 11
1 William B Moffett Jr. 11
3 Robert H Dein 10
4 Mary Anne Fitch 8
5 Lori L Powers 7
5 Robert R Myers 7
5 Tom Tezak 7
8 John H Page-Papazian 6
8 Steve Blackington 6
10 Bob Hansen 5
10 Debbie Arakaki 5
10 Dennis Rush 5
10 Jeremy Stice 5
10 Martin Hauen-Limkilde 5
10 Nancy J Callahan 5
10 Vincent Palmieri 5
17 Courtney M Brown 4
17 Cynthia Warner 4
17 Dano Sayles 4
17 Diane K Pool 4
17 Jeannie Kong 4
17 Josh Jerman 4
17 Kathy Ross 4
17 Riette G Jenkins 4

Bottom Line: This is the big time.

No analysis required.  This data speaks for itself.  We’re talking about real estate professionals at the top of their game here.  They all deserve aloha and praise!

Questions or comments?  Please leave them in the comment  box below, I would be happy to clarify and/or expand.

Aloha, Chris

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Maui Million Dollar Home Sales ($1.0M+) – Day 2 of 10 – Sale Prices

September 19, 2013

From January 1, 2012 through September 16, 2013, a total of 231 “million dollar plus” homes sold in Maui County, generating total volume in excess of $525 million.

There are many ways that Hawaii real estate appraisers analyze sales statistics for luxury homes.  Because a proper market study for this segment would run many pages, I am posting one article per day for ten days.

Day 2 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By Sale Price

Consider the following graph and chart:

Maui Million Dollar Homes By Sale Price

Maui Million Dollar Homes By Sale Price

Maui Million Dollar Single Family Homes By Sale Price
Sold From 1/1/2012 through 9/16/2013
Sale Price # of Sales % of Total
$1.0 M to $1.9 M 157 68.0%
$2.0 M to $2.9 M 31 13.4%
$3.0 M to $3.9 M 18 7.8%
$4.0 M to $4.9 M 9 3.9%
$5.0 M to $5.9 M 5 2.2%
$6.0 M to $6.9 M 2 0.9%
$7.0 M to $7.9 M 1 0.4%
$8.0 M to $8.9 M 4 1.7%
$9.0 M to $9.9 M 3 1.3%
More than $10.0 M 1 0.4%
Total 231 100.0%

The data shows a predictable trend, with more than 80 percent of the “one million plus” sales on Maui being in the “under $3.0 million” price range.  Although a handful of high profile Maui luxury homes have sold in the past few years for prices in excess of $20.0 million, MLS records show only one residence eclipsing $10.0 million since January 1, 2012.

Bottom Line: Price Matters

There is healthy market activity in Maui’s “million dollar plus” category, but the overwhelming majority of sales (nearly 90 percent) sold for less than $4.0 million.

Questions or comments?  Please leave them in the comment  box below, I would be happy to clarify and/or expand.

Aloha, Chris

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Maui Million Dollar Home Sales ($1.0M+) – Day 1 of 10 – “Where are the million dollar homes located?”

September 18, 2013 2 Comments

Since January 1, 2012, a total of 231 “million dollar plus” homes have sold in Maui County, generating a total dollar volume in excess of $525 million.

There are many ways that Hawaii real estate appraisers analyze luxury sales statistics.  Because a proper market study for this segment would run many pages, I will be posting one analysis per day for the next ten days.

Day 1 of 10 – Maui Million Dollar ($1.0M+) Single Family Homes By District

Consider the following graph and chart:

Day 1 - Maui $1.0M Sales By District

Maui Million Dollar Home Sales By District

Maui Million Dollar ($1.0M+) Single Family Homes By District
Sold From 1/1/2012 through 9/16/2013
District # of Sales % of Total
Wailea / Makena 42 18.2%
Lahaina 24 10.4%
Kaanapali 23 10.0%
Kula / Ulupalakua / Kanaio 20 8.7%
Maui Meadows 19 8.2%
Kihei 16 6.9%
Haiku 15 6.5%
Kapalua 15 6.5%
Spreckelsville / Paia / Kuau 15 6.5%
Makawao / Olinda / Haliimaile 11 4.8%
Napili / Kahana / Honokowai 11 4.8%
Wailuku 5 2.2%
Lanai 4 1.7%
Pukalani 3 1.3%
Molokai 2 0.9%
Olowalu 2 0.9%
Hana 1 0.4%
Kahakuloa 1 0.4%
Kipahulu 1 0.4%
Maalaea 1 0.4%
Total 231 100.0%

Maui’s three resort districts of Wailea / Makena, Kaanapali, and Kapalua are in bold.  As shown, almost 35 percent of Maui’s million dollar home sales since January 1, 2012 come from these three master planned communities. The second tier visitor areas of Lahaina, Kihei, and Napili/Kahana/Makawao log an additional 22 percent of the “million dollar” single family home sales on the Valley Isle.

Maui Resort and Second Tier Neighborhoods

Maui Resort and Second Tier Neighborhoods

 

Bottom line:  Location matters.

While upcountry locales are showing strong sales figures in the million dollar and above segment, Maui’s master planned resorts of Wailea/Makena, Kaanapali, and Kapalua lead the way.

Questions or comments?  Please leave them in the comment  box below, I would be happy to clarify and/or expand.

Aloha, Chris

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Hawaii Four Seasons Hotels – A resort real estate appraiser’s friend when data is tough.

August 13, 2013 1 Comment

Imagine you’re an appraiser in Hawaii, and you’re given the enviable task of appraising an oceanfront homesite in the Manele Resort on Larry Ellison’s island of Lanai.

There are only eleven oceanfront lots currently developed in the resort (as shown roughly in the aerial below) and only one lot has sold in the last decade (Lot 130, for $3,612,500 in May 2011):

Lanai Oceanfront with Parcel Shapes

Manele Resort – Eleven Oceanfront Homesites
Photo Source: Bing Maps

The sale of Lot 130 is a godsend, but other than that, what is an appraiser to do for comps?

We can’t very well do a one comparable appraisal: We’ve got to go off island.

Two resort areas of the State of Hawaii that are similar to Manele Bay in terms of climate and resort appeal are Wailea (Maui) and Hualalai (Big Island).  All three neighborhoods have oceanfront homesites that could potentially provide sale comparables, and all three master planned communities are home to a prestigious Four Seasons resort!

Four Seasons Manele Bay

Four Seasons Manele Bay

Four Seasons Hualalai

Four Seasons Hualalai

Four Seasons Wailea

Four Seasons Wailea

What gives? Being (arguably I’m sure) the most prestigious hotel operator (“flag”) in the State of Hawaii, Four Seasons resort properties must meet certain strict criteria in order to qualify as a potential member of the brand.  Each of the three resorts on Lanai (Manele), Maui (Wailea), and the Big Island (Hualalai) are world class hotels that were constructed between 1989 and 1996, and have been well maintained in the interim.   As such, the physical plant of each resort should have reasonably similar cost/value attributes. (The Hualalai resort is a newer “bungalow-style” design that likely has more market appeal)

Under the assumption that each of the three properties benefit from first class or better improvements, differences in room rates likely capture a good portion of the market’s preference for a specific location/resort.  For an appraiser starved for data in a highly-unique sub-market like Manele Bay/Lanai, hotel room rates can provide much needed market support for potential location adjustments.

Consider the following:

FOUR SEASONS – HAWAII OCEANFRONT RESORTS 
Best Available Room Rate – August 19, 2013
Island Resort Hotel Name Year Built Room Rate
Big Island Hualalai Four Seasons Resort
Hualalai at Historic Kaupulehu		 1996 $920
Maui Wailea Four Seasons Resort
Maui at Wailea		 1989 $595
Lanai Manele Four Seasons Resort
Lana’i at Manele Bay		 1989 $459

That’s right, the best available room rate at the Four Seasons Hualalai is DOUBLE the same at Manele Bay!

The following chart shows the relationship of each hotel to its Manele cousin, and the indicated adjustment to equate each room rate to Manele:

Downward appraisal adjustments of 23 percent (Wailea) are serious business, never mind 50 percent allowances (Hualalai).  But for the appraiser who is digging deep for market support for a location adjustment, comparative hotel room rates are an interesting value indicator to consider.  In a future article I’ll examine the three neighbor island resorts in greater detail and see if these price relationships hold.

Questions, comments?  Please leave them in the comment box, I would be honored to clarify and/or expand.

Aloha, Chris

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