Maui Market Report – March 2025

Apr 3

Written By Wendy Ruppenthal

As winter came to a close and seasonal visitors wrapped up their stays, Maui’s real estate market began to show early signs of a spring awakening. While overall property sales remained relatively slow, March brought a modest rebound—driven primarily by an uptick in condo activity.

Buyers still hold the upper hand for now, but with real estate activity picking up along the West Coast, we may be catching a glimpse of what’s to come. Historically, when momentum builds there, Maui tends to follow not far behind.

Single-Family Homes

Sales came in at 49, with a median price of $1,295,000. Most sellers received about 96% of their asking price, and 16% of homes sold above list. With a median of 80 days on market, buyers are taking their time—highlighting the importance of strategic pricing and presentation.

Condominiums

Condos led the charge in March with 60 units sold and a median price of $822,500. Also receiving 96% of list price on average, condo activity picked up thanks to late-season interest from snowbirds looking to turn vacations into investments.

Land

Land sales remained quiet, with just 10 parcels sold and a median price of $705,000. Only 90% of list price was received on average, and no parcels sold above asking—a clear signal that land buyers still have room to negotiate.

What This Means for You

We’re in a transitional moment. Inventory is climbing, and while buyers are cautious, they’re still out there—especially those looking ahead to summer or planning for long-term lifestyle shifts. If you’re thinking of selling, now’s the time to get ahead of the curve.

1031 Exchanges in Hawaii:

A Smart Strategy for Savvy Investors

A 1031 exchange is a powerful tool for real estate investors, allowing them to defer capital gains taxes by reinvesting proceeds from a sold property into a like-kind property. While this tax-deferral strategy applies across the U.S., Hawaii has unique regulations that make it essential for investors to understand the rules before moving forward.

The Key Benefit of a 1031 Exchange

• Tax Deferral: By reinvesting proceeds into another investment property, you can defer capital gains taxes, allowing your equity to grow tax-free and keeping more of your investment dollars working for you. This strategy enables investors to reinvest their full proceeds rather than losing a portion to taxes, maximizing long-term wealth-building potential.

Hawaii-Specific 1031 Exchange Rules

• Hawaii State Tax Withholding: If you sell a Hawaii property and exchange into an out-of-state property, you may still owe Hawaii Capital Gains Tax. Additionally, if you are a non-Hawaii resident, the state may withhold 7.25 percent of the sale price under HARPTA (Hawaii Real Property Tax Act). FIRPTA, a 15 percent federal withholding tax, applies only to foreign sellers. A qualified intermediary and tax professional can guide you through potential exemptions.

• 45-Day Identification Period: You must identify potential replacement properties within 45 days and close within 180 days of selling your original property—no exceptions.

Understanding Like-Kind Property in Hawaii

A common misconception is that "like-kind" means exchanging a condo for a condo or a home for a home, but that is not the case. The IRS defines like-kind property broadly for real estate, meaning you can exchange:

• A single-family home for a condo, apartment building, or commercial space

• A vacant lot for a rental property or business property

• Multiple smaller properties in exchange for one larger property, or vice versa

To fully defer capital gains taxes, the total value of the replacement property (or properties) must be equal to or greater than the relinquished property’s value. If the replacement property is of lesser value, the difference (known as “boot”) may be taxable.

Multiple Property Exchange Guidelines

• You can purchase multiple replacement properties as long as their combined purchase price meets or exceeds the sale price of the relinquished property.

• The Three-Property Rule allows you to identify up to three replacement properties of any value, from which you must close on at least one.

• The 200 Percent Rule permits you to identify multiple properties, as long as their total value does not exceed 200 percent of the relinquished property’s value.

For investors, second-home sellers, and first-time investors, a 1031 exchange can be an invaluable strategy for maximizing returns. If you are considering one, let’s discuss how to structure your exchange for the best outcome in Hawaii’s unique market.

As we enter 2025, the Maui real estate market continues to evolve, creating opportunities for both affluent buyers and first-time homebuyers. Whether you’re considering selling your property, investing in Maui real estate, or purchasing your first home, staying informed on market trends is essential.

Here’s a look at the latest market data:

 🏡 Single-Family Homes

• Median Price: $1.2M – the lowest since December 2023

• Average Days on Market: 94

 🏢 Condominiums

• Median Price: $675K – comparable to January 2023

• Average Days on Market: 123

 Although home prices have softened, buyer demand is increasing, and days on market are trending downward, signaling a positive shift in the market.

 What Does This Mean for You?

 For Sellers:

• With buyer activity picking up, now is a great time to prepare your home for sale.

• Strategic pricing and professional presentation will maximize your property’s value.

• Shorter days on market mean well-positioned homes are selling faster.

For Buyers:

• With price adjustments, the market is creating new opportunities for first-time buyers and investors.

• More inventory means greater choices, whether you’re looking for a luxury home or an entry-level property.

• With interest rates stabilizing, now is a great time to make a move.

   Have questions about the market? Let’s talk!Whether you’re searching for luxury real estate, an investment opportunity, or your first home, we’re here to guide you every step of the way.