Local buyers the minority in Maui real estate market

 

Maui County is the only county in the state in which less than half – 48 percent – of single-family home and condominium buyers were residents while the remaining 52 percent were from the Mainland or foreign countries, according to a study by the Research and Economic Analysis Division of the state Department of Business, Economic Development and Tourism.

Released last week, the study tracked home and condo sales data from Title Guaranty, a real estate title services company, from January 2008 to September 2015. In that period, there were 20,752 residential sales in Maui County. Of those, local buyers purchased 9,968, or 48 percent. Mainland buyers accounted for 9,310, or 44.9 percent, and foreign purchasers acquired 1,474, or 7.1 percent.

“Maui County is loved by the Mainland buyers and also by Canadian buyers,” state Chief Economist Eugene Tian said, adding that interest in purchasing Maui properties is fueled by tourism and direct airline flights to the islands.

While higher demand from Mainland and foreign buyers would create upward pressure on property values and make it more difficult for residents to purchase homes and condos, it’s also good for tourism when off-islanders buy a second home in the islands and then spend money in the local economy, Tian said.

Statewide, there were 139,998 sales of homes and condos. With around 70 percent of the state’s population, Oahu had the most sales with 85,860, or 61.3 percent; followed by the Big Island with 26,348, or 18.8 percent; Maui County with 20,752, or 14.8 percent; and Kauai with 7,038, or 5 percent, the DBEDT study reports.

Maui County had the highest percentage of Mainland buyers at 44.9 percent (9,310 sales) and the highest percentage of foreign buyers at 7.1 percent (1,474).

Oahu had the highest percentage of local buyers with 84.7 percent (72,686) and the lowest percentage of Mainland buyers with 11.7 percent (10,044).

In Maui County, the average sale price paid for properties was $627,162, with local buyers paying an average of $470,817, Mainland buyers shelling out $735,919 and foreign buyers spending $883,842.

Using statewide figures for comparison, buyers in the islands overall paid an average of $526,326, with local buyers spending $478,189, Mainland buyers $630,390 and foreign buyers $785,604.

Sales figures from West and South Maui regions – both with large numbers of condominium units – show a majority of buyers from the Mainland – 62.7 percent in West Maui and 52.6 percent in South Maui. Also, South Maui had the highest percentage of foreign buyers anywhere in the state at 13.1 percent, the only region in double digits in percentage of sales to buyers outside of the United States.

West Maui ranked second statewide in homes sold to Mainland buyers, 3,656, behind Honolulu with 5,327. Kona was third with 3,155 Mainland buyers, followed by South Maui with 3,120 purchasers from the Mainland. Upcountry was ninth statewide with 1,286 sales to Mainlanders.

Only two communities in the state outside of Maui County had less than half of their local buyers purchasing property during the study period. Those were Kona, with 46.3 percent resident and 50 percent Mainland buyers, and Hanalei on Kauai, with 35.4 percent local and 61.7 percent Mainland buyers.

Statewide, there were 32,838 homes and condos sold to Mainland buyers, with 38.4 percent (12,624 sales) coming from California, followed by 10.5 percent (3,435) from Texas, 8.5 percent (2,792) from Washington state, 3.4 percent (1,128) from Oregon, 3.3 percent (1,094) from Colorado, 2.6 percent (869) from Alaska, 2.6 percent (840) from Arizona, 2.5 percent (832) from Florida and 2.4 percent (802) from Illinois.Buyers from all other states made up 25.6 percent (8,422).

The highest average sales price in Hawaii from buyers of any state was Illinois at $1.2 million, and the lowest price was Alaska at $382,950.

An average of 1,629 homes in Hawaii per year in the study period were purchased by California residents, while 443 homes per year went to Texans and 360 homes per year were bought by residents of Washington.

Among foreign buyers, Canadians and Japanese bought the most properties in Hawaii. Canadians purchased 2,497 at an average price of $721,297, and Japanese buyers acquired 2,144 at an average price of $840,344.

Maui County captured 53.5 percent of the Canadian buyers statewide but only 1.6 percent of those from Japan. The Canadian purchasers paid an average of $868,162 for Maui properties, while Japanese paid an average of $968,467. Oahu took 88.1 percent of the buyers from Japan, and 22.6 percent of those from Canada.

Buyers from Hong Kong paid the most on average for 112 Hawaii properties – $1,047,457, followed by the rest of China with 112 properties at an average price of $936,738 and Korea with 95 properties at an average price of $882,894.