MAUI Real Estate after the STR Ban - Are Property Values CRASHING ???

[@steveb540i]

That sample size was quite small. As an owner of a West Maui A2 zoned unit I believe the impact will far exceed a 20% decline as this gets dragged out in the courts. Who will want to buy with so much uncertainty? I hope these bastards get voted out of office soon.

[@MakuaMaui]

It’s already up to 30% on the properties actually selling.

[@nancyw9952]

For Papakea, you did not account for the 80-120k price tag for the pipe project. To make the pricing accurate, I think you would need to add that amount (not to mention the rehab costs ) to the sales numbers. Every owner will have a loan on there property added in June 2026 once the piping project is complete.

[@bk7097]

Love your updates, Mahalo for doing this, well appreciated 🙏🏻

[@richl6725]

When the rental inventory reduces, the rental rates will go up on individual units. Most likely reducing tourist visits. It would be interesting to chart the rental increases in the hotel zones and watch the tourist dollars shrink. That said, less tourist dollars mean more financial strain of companies relying of those tourist dollars. Thus less jobs. Less jobs and pay will make more long term rentals seen more expensive in relationship to income and thus less affordable. This is a bad plan. Maui would be better off developing unused land for lower cost housing and cut the red tape to get it done. We have stayed at the Royal Mauian many times over the years and have seen a steady increase in the rental cost. June 2024 was our recent visit. We were given a quote for next year at an increase of 10 percent. Sadly, we think the June 2024 visit will be our last. We support local businesses on every visit and know how important that has been. I feel sorry for their loss. Thank you Jesse for all you do, very informative.

[@areuaware6842]

FEMA is paying all the rent.

[@Jayronimo40]

Great technical analysis!! Some of us do appreciate spreadsheets and statistics!! 🙂

[@JesseGWald]

Glad it was helpful!

[@areuaware6842]

"There are three kinds of lies, Lies, Damn lies and Statistics"

[@davewil3]

Kaanapali Shores has growing inventory, very few going under contract. But LARGE asking price decreases. A 2 BR just dropped $250K.

[@century21niseko81]

Really?

[@areuaware6842]

Yup, and this is only the beginning...

[@donchennavasin6726]

Spreadsheets and statistics should be everyone’s cup of tea! Thanks, Jesse!

[@clifflong7944]

Values crashing? Does that mean locals can move off the beach and take showers before they go to work?

[@MakuaMaui]

If they had credit and a job they could attempt to buy one.

[@peterl708]

I was on Maui 2 weeks ago. There is so much empty land there. Why don’t they build more houses?? I assume the empty lands are owned by someone? Gov can buy back from whoever’s the owners, no? Family and I had interest in getting a vacation home in Hawaii one day. But for now, will put that dream aside due to this uncertainty

[@GaryGarbrecht]

There is a lot of land owned by the city and county in West Maui. Many of the locals are very bigoted agains mainlanders. This group (voters) would rather destroy the STR market to hurt the mainlanders than solve the housing shortage with more housing.

[@MakuaMaui]

So how is the mayor going to make up for the last tax revenue after crashing these property values by 30%? These properties pay almost half of all Maui taxes collected. Smart….

[@scottr9354]

Jesse, Do you think that some of the older Condos in Maui could get hit with large assessments for building repairs in the future similar to Miami where some owners are getting assessments up to $140,000 to retrofit and repair structural deficiencies?!

[@dmitripruyn1587]

I would guess that Maui politicians will back off on these proposals because of the loss of tax revenue that is already hitting them. It will interesting to see how the politicians will explain having to shift these taxes to locals. Why not do a segment on how much tax a non resident STR owner pays to the state of HI and county of Maui. I think most locals have no idea.

[@SeanD808]

Bissen didn't care... He said Maui can't run a deficit and they'll just raise taxes to compensate... “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.” ― Rahm Emanuel

[@MakuaMaui]

Correct, they’re crashing the economy and Maui is missing hundreds of millions of tourists dollars monthly. The inept mayor needs to go.

[@triciasagecreek8669]

I would be interested in knowing that number... I have looked in to several units to buy but am waiting until this mess is figured out as well

[@MakuaMaui]

@@triciasagecreek8669 Don’t wait too long because once this storm passes they’ll bounce up in value overnight. The good deals are already selling pretty quickly down 25-30% from the peak. If you buy in a quality complex right now they’re still booking near 80% occupancy. Don’t mess around with second class resorts that aren’t currently being booked much at all.

[@cmra1997]

Thank you for this video. I'm curious about one thing though. How much of the more recent sales are panic sales? Meaning how much of the owners accepting that price was their panic about the STR ban & wanting to get out before it gets worse?

[@JesseGWald]

Good question. Only time will tell for sure.

[@CharlieVinciTeam]

Great Vid Jesse!! Thank you for all the great content!!

[@lufthansa3000]

Hey Jesse, I own a Luana Garden Villa at the Honua Kai which is protected and I don't want to sell because I want to see Maui rebuild thus making my real estate more valuable in the long run. I bought during Covid at the absolute low of the market knowing that Maui was gonna boom...and it did, but what are your thought about the Honua Kai?

[@gregmaine1069]

Thanks for your thoughtful analysis.

[@mtracey168]

Great insights. How are you factoring rising insurance premiums / HOA? I suppose it’s affected all units equally?

[@GlenAlanPhillips]

As earlier noted, the Papakea numbers are more like a 10% decline - not 20%. The cash call on a two bedroom unit for the plumbing project are just under $100,000 so market prices have been reduced to reflect this number. Only building A has been completed on this 1.5 year project in this massive project.

[@beckyumphrey2626]

$700k for 600 square feet. That is insane. I can buy a 75 acre ranch with a 2000 sq.ft home in my area.for $500k.

[@oasistobe]

I can see why real estate brokers would be whining about an STR ban. Fact is they have been legally held up in many markets on the mainland for many years now.

[@JesseGWald]

there is actually a very recent example of the courts overturning a proposed change in short term rental rules here in Hawaii: The minimum number of days for short-term rental properties on Oahu had been 30 days for a very long time. In 2022, the City of Honolulu passed Bill 41, a law that changed the minimum to 90 days. They were sued and recently lost. The outcome of the lawsuit means that the current minimum to back to 30 days.

[@oasistobe]

@@JesseGWald In the San Juan Islands of Washington State, the Country requires STRs to have a special permit, and they strictly limit the number of permits available. This limit has been in place for at least ten years.

[@islandbirdw]

Maui has become unaffordable. Our family bought a lot n Olinda and built a cedar home there it wasn’t cheap but much more possible for average upper middle class to achieve back then. They liked upcountry for the solitude and the cooler weather. The views were unobstructed of both bays, simply stunning. They sold 25 years ago to folks who lived in Honolulu and wanted to get away to the country. So another modest family. Now it’s just only for the rich and famous. 🤷🏼‍♀️

[@psay4857]

Im waiting for bigger discounts before buying. No STR for me since i will be living in the unit.

[@SurfCityBill]

@psay4857 I agree. The run-up in pricing over the last 4 years is due for a correction. The STR issue may or may not contribute to that.

[@NLR759]

STR bans hit the middle-class investor the hardest. This is the demographic that needs to do STR in order to be able to afford an investment property that they may use themselves occasionally as a vacation property. Very wealthy people own larger, more expensive properties, and can afford to let them sit empty when not in use. No one seems concerned about those properties not being fully utilized as housing, everyone is hyper-focussed on the middle class investor who is scraping by to own a vacation property and needs STR income in order to be able to afford it. The mega wealthy who let their houses sit empty can continue to do whatever they want.

[@albertlatscha]

100% correct , people seem very negative towards this group of people who are just trying to invest

[@seanammon6993]

Having a second property in Maui isn't exactly middle class. If you simply want to invest do it somewhere else where housing isn't as big of an issue.

[@albertlatscha]

@seanammon6993 banks, big corporations, and private investors do this at a macro level ...

[@CaraBirkholz]

Curious about the volume of sales compared to last year? The sample sizes are pretty small

[@JesseGWald]

I agree, the sample size is very small. I will make another video when we have more closed sales to analyze.

[@piperlani]

Great video!👍🏼🤙🏼

[@chinoyhealingfoodstravels8888]

Greetings from Redondo Beach 🇺🇸🇺🇸Thank you for this invaluable update🌷🌷

[@mariorivera5533]

For STR owners, it seems that steep increases in Property Taxes will force people out as it has nearly doubled in just two years. Continued increases like this may not be tolerable. Could be another important metric to analyze.

[@aulusa]

Hi Jesse Do you know how the Kapalua Bay, Golf and Ridge properties are zoned? Thx Mike Baker

[@ericdahl6727]

Apartments -

[@ericdahl6727]

Well I know the Ridge / Golf Villas are...

[@JesseGWald]

They are all Apartment Zoned.

[@ericdahl6727]

@@JesseGWaldWhen I was looking at prop at The Ridge I was told the two dirt parking lots below the west side (above The Montage) were zoned Apts - never thinking to ask the zoning of The Ridge …

[@MarshaWaldArtofLivingMaui]

Very informative video🌺

[@Denver645]

You are in my development filming this. Definitely no STR allowed here

[@JesseGWald]

Hello neighbor. Correct, no STR's allowed here.

[@mikew8128]

No news updates for awhile? I guess no news is good news?! This probably not gonna happen? Mahalo

[@Missy-xr4fs]

Do you think the increase in HOA fees have affected the reduction in pricing in the condo market?

[@JesseGWald]

Yes, it has likely contributed to the price reductions.

[@century21niseko81]

Interesting. Thank you

[@davidbarker6899]

I would be interested with the STR on Oahu.

[@JesseGWald]

@davidbarker6899 I'm actually in the process of buying an STR on Oahu for myself. Feel free to call or email for details if you are interested.

[@ericdahl6727]

Ridge Kapalua: ‘21 purchase no updates $1.3M. 6/24 comparable sale > $1M …

[@socalsp3]

Good

[@dennisjohnson9024]

we should brand this type of sardonic entitlement validation

[@wlifting]

Niece piece, how many units were bought during COVID by the hedge funds? They have been unloading units nationwide in the past 6 months.

[@newfguy1826]

discount? Thant is funny

[@areuaware6842]

Of course property values are crashing, that is what they want.

[@bdd187]

Foreclosures resume starting Jan 1, 2025 which will create further downside pressure. Party is over folks!

[@SurfCityBill]

While banned STR properties may very well see a price differential from non-banned, there could be other factors involved. I'd like to see a larger sample size as more sales occur.

[@JesseGWald]

I agree. I'll make another video in a few months when we have more closed sales to analyze.

[@gathtv1399]

Probably unconstitutional? That's thrown around a lot so if you want consideration, it's best to expand on what part of our constitution you think is in play. I get to Maui once or twice a year and stay in full service hotels, so I won't presume to speak for renters, owners, or the residents of Maui, but having met so many amazing residents and natives of the island, I hope it works out best for them. Those of us who visit can't be the primary concern. Anyhow, God bless to the people of Maui.

[@JesseGWald]

The Fifth Amendment of the U.S. Constitution provides that "[n]o person shall be ... deprived of life, liberty or property without due process of law; nor shall private property be taken for public use, without just compensation."

[@youruiz]

@@JesseGWald This "takings" action has almost no chance of plaintiff success. This isn't the first case of this type in the country under the umbrella of zoning regulation, all of which end in finding in favor of the government's ability to regulate zoning. There is clear, preexiting zoning deliniating short term occupancy for tourism and long term residential use. The county will be able to frame it as clarifying and enforcing already existing regulation and that the business use of STRs are counter to residential zoning as previous case law shows all across the country. Not only that but a sophisticated actor (someone engaging in real estate investment) should have foreseen the regulatory risk to continued growth in value of this type of investments. Stick to index funds and t-bills

[@ItsEdSilha]

STRs should be illegal, period.

[@ericdahl6727]

@@ItsEdSilha Well, there's this thing called property tax, which at the current rate for STR's brings in ~$75M from the properties affected. Down zone to LTR drops the tax rate from 12.50 / 1000 to $3.00. That's just the beginning for lost revenue...

[@JesseGWald]

@@youruizthere is actually a very recent example of the courts overturning a proposed change in short term rental rules here in Hawaii: The minimum number of days for short-term rental properties on Oahu had been 30 days for a very long time. In 2022, the City of Honolulu passed Bill 41, a law that changed the minimum to 90 days. They were sued and recently lost. The outcome of the lawsuit means that the current minimum to back to 30 days.

[@seanoflaherty6678]

void

[@pt109che]

Thanks for the updates. So we are coming to Maui in December 2024 and planning to stay at VRBO in the Kehei area, hope that does not affect us soon.

[@rwnljn]

It’s Kihei.

[@JesseGWald]

It won’t affect you at all. Even if this does pass, the current proposal wouldn’t go into effect in Kihei until January 2026. The county planning commission suggested an even longer timeline.

[@rocket9580]

i wonder how many realtors will get sued...