Pāʻia Real Estate Market Update March 2018
Pete Jalbert with The Maui Real Estate Team gives readers an update of the Pāʻia real estate market through March 2018.
This small beach town has been one of the stronger real estate markets on the island this cycle. With very limited growth in inventory over the last 15 years and a significant increase in demand, the recipe for price increases has been in place for some time.
After completing a market update focusing on Spreckelsville, this update will focus more on Pāʻia town itself and the neighborhoods of Kūʻau located to the east of Pāʻia town.
Here are the notable sales numbers from the second half of 2017 and the first couple of months of 2018 in Pāʻia town.
- There were eight homes and one condo sold in the last half of 2018. There have been three homes sold thus far in 2018. There are an additional five homes under contract.
- Over the same period of 2016-2017, there were 14 homes sold and one condo sold. That is a 22% decrease in home sale volume.
- The median price of the homes sold over the last 8 months is $747,000. The average sales price for the 11 homes that closed is $1,837,563. Over the period between July 1, 2016 and March 15, 2017, the median price of homes sold was $590,000 and the average price was $840,000. That is a 25% and a 218% increase respectively. These charges aren’t solely a reflection of increases in value. They are also due to a higher number of more expensive sales and less inventory and activity at the lower price points in the market.
- The high sale over the last eight months was $4,855,200 for an oceanfront home in Pāʻia. The five-bedroom, four-and-a-half-bath home with 3,809 square feet of living space is situated on a 15,882 square foot lot. The sale was notable as it was the first luxury home auction in the Pāʻia area.
- This was one of four sales in Pāʻia that closed over $3 million. The other three closes were all ocean or beachfront properties.
- The lowest priced home sale was $521,000. This was for a three-bedroom, two-bath home with 1,508 square feet of living space on a 7,871 square foot lot on Baldwin Avenue.
- The one condo that closed at Kūʻau Plaza sold for $354,000. That is a new record-sale for a one bedroom in that complex.
While the Pāʻia area is pretty small, the housing stock can be diverse. The numbers above give the big picture. Jalbert dives deeper by looking at some of the individual neighborhoods in the community.
Skill Village is a neighborhood located above the Pāʻia Mill on Baldwin Avenue. It consists of mostly modest homes built in the mid to late 1980s. A lot of the homes priced in the entry point of the Pāʻia market are located in Skill Village. It also tends to be one of the busier neighborhoods in Pāʻia for sales activity.
During the last half of 2017, the neighborhood bucked that trend. There were only two sales. The recent activity has also been happening at higher price points. The lowest priced sale in the neighborhood closed for $600,000. That was for a well maintained three-bedroom, one-bath home with 984 square feet of living space on a 6,164 square foot lot.
The highest priced sale was actually the highest all time sale in the neighborhood. A home at 85 Palekana Street sold for $700,000. This four-bedroom, two-bath home has 1,576 square feet of living space. That record appears to be short lived with a larger, highly upgraded home located at 549 Kuanana listed for $849,000 currently under contract. Even if the sale price is well under asking, it is highly likely that this will be a new record. That house is somewhat anomalous from other current activity in the neighborhood.
After about a year or more of limited listings, we have seen neighborhood inventory increase since the start of the year. The property at 549 Kuanana is one of seven homes that are currently listed in the neighborhood. Four of the seven homes are under contract. The price points are also a little more accessible with four out of seven listings priced below $600,000.
Pāʻia Halelani is a neighborhood that most don’t know by name. Located behind the Pāʻia Community Center, most of the community’s modest homes were built in the early 1970s. The neighborhood has not seen a lot of activity lately with no sales in the last couple of years. Within the last month, the first two listings in some time came to market. Both homes are priced under $500,000, a relative rarity these days in the Pāʻia market. That said, the bank owned property at 246 Kahiko is in such poor condition that they are not even allowing showings due to safety concerns. That means a cash buyer is the only possibility. The other home at 210 Kahiko also has considerable deferred maintenance and may also require cash to purchase. These two properties will not provide a great indication on neighborhood values when they close due to their poor condition.
Kūʻau Bayview is an Alexander and Baldwin subdivision built in the late 1990s. The subdivision has been one of the strongest neighborhoods in this market cycle. It was the first neighborhood on the island to set all time market highs after the last downturn. It has had relatively limited activity on the MLS during the last eight months. The listing at 34 North Laelua is the only property listed on the MLS at this time. That home is currently under contract. There was one for sale by owner in the neighborhood that recently sold. There is also one other For Sale by Owner which just came on the market.
This is more a property type or general location than neighborhood. The shoreline of Pāʻia has seen a fair amount of real estate activity over the last eight months with four closes. They are a fairly diverse set of properties. There was the aforementioned auction property. That plain and simple was a luxury oceanfront home. The second highest sale was for a large plantation style home right on the oceanfront of Pāʻia Bay. The home was filled with Old Hawaiʻi Charm and fetched a price tag of $3.6 million.
While the previous two sales were finished articles, the last two oceanfront sales were more upside purchases. The first was .64 acres on the beach at Pāʻia Bay. There are two structures on the property including a three-bedroom, two-bathroom home with 2,260 square feet of living space and a three-bedroom, one-bath home with 960 square feet of living space. The zoning allows for the possibility for a third structure. The last sale included over an acre of oceanfront in the middle of Tavares Bay with a 1930s vintage old Hawaiʻi-style home. The sea wall on the property began to fail while it was under contract. This led to a price reduction during the transaction. The new owner will need to address that issue. These two properties both closed for $3.3 million.
Unless, there is an influx of new listings, Jalbert expects a slow down in activity for oceanfront homes in Pāʻia . There are just three Pāʻia oceanfront properties on the market at this time. One is priced well over the all-time record sale for oceanfront homes in Pāʻia outside of Spreckelsville. Another home is priced just below the record sale. The all-time record sale was on more land, with bigger, newer and more upgraded homes. A buyer would really need to fall in love with the respective locations of those listings to pay close to the asking prices.
Pāʻia Market Outlook for the rest of 2018
Pāʻia has relatively limited inventory at this time. That is likely to be the biggest constraint to a lot of sales activity for the rest of the year. Another thing to watch is interest rates. While we have a little more inventory in Skill Village, lower priced properties may cool off a little if we see a significant rise in interest rates.
The fundamentals of Pāʻia overall remain strong. It still has a fairly limited number of properties and the future development of homes will likely remain slow. Demand comes from both on-island residents and off-island buyers. That should keep Pāʻia as one of the more sought after real estate markets on the island.
Sellers will find that the lack of inventory makes this a good time to come to market. Sellers do need to put thought into their pricing. Even with limited inventory, overpriced properties can sit for a while under current market conditions.
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