Luxury Market Report, Q2 2023: Statewide

Hawai’i luxury market report sheds light on an increase in overall luxury inventory in Q2 2023 and decade-long market trends

A look back at Hawai‘i’s luxury real estate market indicates that active inventory on O‘ahu began climbing after reaching the lowest point in February 2022 for homes and March for condos, ushering a subsequent rise observed across the island chain. Maui’s active inventory for luxury homes and condos reached the lowest point in March 2022, but has been steadily rising since then and Kaua‘i's active inventory for luxury homes and condos reached the lowest point in April 2022, but has also been steadily, albeit slowing, rising. Meanwhile, the Big Island of Hawai‘i’s active inventory for homes and condos reached the lowest point in Q2 of 2022, but has since maintained a steady growth rate.

As of spring of 2022, Maui’s days on market (DOM) has witnessed a consistent upward trend for all property types while O‘ahu’s days on market has consistently been trending upward for all property types since July 2022. Since August 2022, Kaua‘i’s days on market has witnessed a consistent upward trend for all property types and the Big Island’s days on market has been trending upwards for all property types.

In terms of sales, the peak of inactivity for most Maui markets occurred at the dawn of 2023, followed by an upward trend in sales figures for residences and condos since January. Given the current trends, we anticipate a positive sales activity trend on Maui if the rise in inventory and DOM continue. Although 2023 started off slow, the current data strongly suggests a resurgence of sales activity on O‘ahu, especially if mortgage rates retreat from the July 2023 high.

The peak of inactivity for most Kaua‘i markets occurred at the dawn of 2023, followed by an upward trend in sales figures for homes and condos since January. In terms of sales on the Big Island, activity bottomed out at the beginning of 2023, followed by an upward shift in numbers for both homes and condos.

Given the current trends, we anticipate a positive sales activity trend in Hawai’i if the rise in inventory and DOM continue, particularly if mortgage rates descend from their July 2023 peak.

Join us as we take a closer look at each island’s residential sales for the luxury market. Exploring the 10-year appreciation data behind market volatility and what the current Q2 2023 data suggests about the direction the market is heading.

Kaua’i Luxury Market Statistics Overview

10-Year Residential Real Estate Appreciation

Kaua‘i experienced fluctuations in sold listings, as evident in a gentle rise and fall of over the past decade. The pandemic’s impact on the island’s luxury real estate market, however, was apparent in the significant peak in sold listings in 2021, with 196.7% more sold listings by year end as compared to the same period in 2020 (Interestingly, 2015 saw 200% more sold listings than previous year). Kaua‘i’s negotiation rate held the same implications for buyers in 2019 as it did in 2022: At a 95% sold-to-list ratio, buyers could offer 90% and expect to pay about 95% of the listing price. Looking at the past decade, the real estate market on Kaua‘i has exhibited appreciation in value, surpassing the surge in value witnessed during the pandemic and signifying the resilience of the market.

Maui Luxury Market Statistics Overview

10-Year Residential Real Estate Appreciation

In 2021, the pandemic’s impact on Maui’s luxury real estate market was evident in the substantial spike in sold listings, with an unprecedented 147 properties sold. The island is slowly coming down, hitting 96 sold listings in 2022 (which is still notably high compared to 52 sold in 2020). It’s safe to say that the market has yet to settle from the pandemic-related surge. Maui saw its highest sold-to-list difference in 2022, with a ratio of 95% that alerted sellers to a 5% negotiation rate. When looking back over the past decade, high-end listings are clearly not sitting on the market for as long. After fluctuating prior to the pandemic and seeing a bump in 2020, DOM decreased to -14.4% in 2021 and continued its descent to -42.7% less when comparing year-end 2022 to the same quarter the previous year. This is the biggest drop in DOM on Maui in 10 years, demonstrating that demand is still strong and underscoring a substantial and sustained growth in property values.

Hawai’i Island Luxury Market Statistics Overview

10-Year Residential Real Estate Appreciation

Over the past decade, Hawai‘i Island saw fluctuations in sold listings, inching up and dipping subtly. In 2021, the pandemic’s impact on the luxury real estate market was apparent in the dramatic spike in sold listings, with a 103.3% increase from 2020 to 2021, as compared to a 31.8% from 2012 to 2013.

The sale-to-list ratio Measuring the difference between the final purchase price and the original asking price of a luxury property, the sale-to-list difference was 96% in 2021 and landed at 94% by year-end 2022, alerting sellers to a 4% negotiation rate. In 2020, days on market bumped up 38% before dipping -38.8% in 2021. This underscores the importance of looking beyond the anomaly of the pandemic surge, and reaffirms the island’s strong and resilient market performance.

O’ahu Luxury Market Statistics Overview

10-Year Residential Real Estate Appreciation

Over the past decade, O‘ahu was no stranger to fluctuations, with sold listings inching up and dipping slightly. In 2021, the pandemic’s impact on the luxury real estate market was apparent in the spike in sold listings, with 110% increase comparing year-end 2020 to 2021. What makes this number even more remarkable is that by year-end 2020, there was a - 27.4% decline in sold listings. The sold-to-list ratio of 97% also demonstrated the tightest negotiation rate yet of only 3%. The island’s days on market saw a bump up 32.3% from 2019 to 2020, before a pandemic-related drop of -38.2% in 2021. If the days on market is any indication, the surge isn’t over, as DOM fell once again in 2022, dropping -16%.

Looking Forward

When looking at how Hawai‘i’s property values have changed over the last 10 years, it’s important to consider that the real estate market became more volatile once the pandemic ended and interest rates started rising.

With too few houses and properties available for sale, there was an inconsistency in the types of properties being traded month over month, which resulted in fluctuations in the valuation of Maui’s real estate and a massive spike in luxury property sales on O‘ahu by year-end 2021. This inconsistency in the types of properties being traded also resulted in fluctuations in the valuation of real estate on Hawai‘i Island and Kaua‘i'.

The stunning threshold that was set on Maui when 147 luxury properties sold in 2021 must also be considered. We anticipate that Maui’s market will head back to that threshold even as it becomes less liquid. Based on the subtle -3% decrease in sold properties on O‘ahu by year-end 2022, we expect that the new, soaring threshold that was set is going to relax at a much more gradual pace.

We wouldn’t be surprised to see a new and higher floor on Hawai‘i Island, and the bid to ask may come down a few points, resulting in a sale-to-list ratio of 90%. What’s more, Kaua‘i’s sold listings, which spiked a dramatic 196.7% by year-end 2021, are coming down slowly, with a drop of only -18% by year-end 2022. It’s unclear whether the market will settle… and in actuality, it already may have settled. As such, looking solely at this period for statistical analysis may not provide the most accurate picture of Kaua‘i’s real estate market trajectory.