THE ENDURING APPEAL OF LUXURY
Common themes emerge from an analysis of luxury home sales data and interviews with Coldwell Banker Global Luxury agents in dozens of markets throughout the United States and around the globe. No two markets are identical, but prices have held up overall, even after rising sharply since the current boom began in earnest in 2013. At the same time, there was a moderation in the
pace of luxury home sales in 2018 due to several factors, including increasing inventory levels, elevated pricing, and—to a lesser degree—rising interest rates.
From our annual review of global luxury real estate trends, four themes resonate. The two most prominent are the persistence of demand for high-end properties all around the world, and the ways in which new developments are rising up to meet demand. Another major trend among wealthy individuals is a preference for owning multiple homes in several countries, especially across the borders of the nations of North America. A final observation from field reports and a review of market data is that communities hit hard by a natural disaster tend to rebound strongly. From
hurricanes to wildfires, the historical record shows that luxury markets are resilient in the face of adversity, including news that residents in fire-devastated California communities are already beginning to rebuild after last year’s disastrous fires.
MARKET BECOMING MORE BUYER-FRIENDLY
The second largest of Hawaii’s five major islands, Maui was mostly a patchwork of sugar cane and pineapple plantations before the first hotel appeared in Hana on the island’s east coast in 1946, foreshadowing a future rich in tourism.¹ Sugar companies opened planned vacation communities, first at Kaanapali Beach on the western part of the island in the 1960s, and then on the eastern part a Wailea in the 1970s, turning Maui into a world-class resort destination over the past four decades.
As tourists flocked to Maui’s pristine blue waters and wide sandy beaches to surf, snorkel, and fish, its dozens of golf courses and tennis clubs beckoned sports enthusiasts from all over the world.
“Before long, Maui became a very desirable destination for vacation home buyers from California and the west coast of the U.S., as well as from Canada, Japan, and many people from Europe,” says Volker Weiss of Coldwell Banker Island Properties in Wailea. “Location is everything, with proximity to water and views of highest importance for high-end properties.”
Following a furious appreciation of home prices over the past six years that took property values back to levels not seen since before 2008, there are signs of a moderate slowdown that is tipping the scale in favor of buyers.
“Maui is definitely becoming a buyer’s market,” says Weiss. “People are way more cautious, more educated, and they wait a lot longer before making a purchase.”
In the top 10% of the Maui condominium market, median price per square foot in 2018 was down 8% from 2017 to $1,312, while properties spent 30% more days on market at a median of 162 days. Among single-family homes, price per square foot was down 22% to $700.