Corcoran Luxury Market Report January 2023

About Corcoran Pacific Properties

Corcoran Pacific Properties, the exclusive Hawaii franchisee of The Corcoran Group, is a locally owned and operated company, founded in 2005 with a simple philosophy: treating every client as a friend, and every transaction as if it was our own.

Over the past 17+ years, honoring this philosophy, we established a culture of service and efficiency fueled by high-tech, smart investments in agents, and the tools they need to deliver world-class service while helping clients achieve their real estate goals.

By choosing only the most successful, experienced real estate professionals and dedicating every resource to support their success, we’ve grown to be the brokerage of choice serving Kauai, Oahu, Maui and Hawaii Island.

With our clients at the heart of our business, Corcoran Pacific Properties is dedicated to excellence, innovation and to continuously raising the bar when it comes to impeccable service, expert insight and a relationship-first approach.

Table of Contents

Page 5 Luxury Report Explained

Page 6 Welcome Message

Page 7 Hawaii Luxury Market Review

Page 8-13 Oahu Market Review

Page 14-19 Island of Hawaii Market Review

Page 20-25 Maui Market Review

Page 26-31 Kauai Market Review

Page 33-36 North American Luxury Market Review

Page 37 13-Month Market Trends

Page 38 Single-Family Homes Monthly Overview

Page 39 Attached Homes Monthly Overview

Page 48 Thank You!

Luxury Report Explained

The Institute for Luxury Home Marketing has analyzed a number of metrics — including sales prices, sales volumes, number of sales, sales-price-to-list-price ratios, days on market and price-per-squarefoot – to provide you a comprehensive North American Luxury Market report. Additionally, we have further examined all of the individual luxury markets to provide both an overview and an in-depth analysis - including, where data is sufficient, a breakdown by luxury single-family homes and luxury attached homes.

It is our intention to include additional luxury markets on a continual basis. If your market is not featured, please contact us so we can implement the necessary qualification process. More indepth reports on the luxury communities in your market are available as well.

Looking through this report, you will notice three distinct market statuses, Buyer's Market, Seller's Market, and Balanced Market. A Buyer's Market indicates that buyers have greater control over the price point. This market type is demonstrated by a substantial number of homes on the market and few sales, suggesting demand for residential properties is slow for that market and/ or price point.

By contrast, a Seller's Market gives sellers greater control over the price point. Typically, this means there are few homes on the market and a generous demand, causing competition between buyers who ultimately drive sales prices higher.

A Balanced Market indicates that neither the buyers nor the sellers control the price point at which that property will sell and that there is neither a glut nor a lack of inventory. Typically, this type of market sees a stabilization of both the list and sold price, the length of time the property is on the market as well as the expectancy amongst homeowners in their respective communities – so long as their home is priced in accordance with the current market value.

Report Glossary

REMAINING INVENTORY: The total number of homes available at the close of a month.

DAYS ON MARKET: Measures the number of days a home is available on the market before a purchase offer is accepted.

LUXURY BENCHMARK PRICE: The price point that marks the transition from traditional homes to luxury homes.

NEW LISTINGS: The number of homes that entered the market during the current month.

PRICE PER SQUARE FOOT: Measures the dollar amount of the home's price for an individual square foot.

SALES RATIO: Sales Ratio defines market speed and determines whether the market currently favors buyers or sellers. Buyer's Market = up to 14%; Balanced Market = 15 to 20%; Seller's Market = 21% plus. If >100%, sales from previous month exceed current inventory.

SP/LP RATIO: The Sales Price/List Price Ratio compares the value of the sold price to the value of the list price.

Map of Luxury Residential Markets

Hawaii Luxury Market Review

Corcoran Pacific Properties is pleased to present a closer look at the luxury real estate market in Hawaii, which includes detailed statistical analysis of Oahu, the Island of Hawaii, Maui and Kauai for December 2022.

As we close out the year of 2022, one phrase comes to mind to describe the current luxury real estate market in Hawaii “seeking a new normal.”

While the fast-paced growth seen for this sector of the market was astonishing to witness during the first part of 2022, as the year progressed sales started to stall and inventory levels, while still historically low, began to rise.

In comparison to 2021, the data for 2022 appeared to reflect a downward trajectory of demand for luxury properties, but in reality, it was the pandemic years that created a phenomenon in sales that is unlikely to be experienced again any time soon.

Today’s luxury market seems to be returning to something more resembling a pre-pandemic pace, with buyers becoming more discerning in their choice of property, decision process, and how they spend their money; especially as prices have remained stable and even close to record levels.

During the last two years the growth of savings, equity, and investment portfolios, as well as historically low interest rates, afforded many existing and new affluent buyers to purchase luxury homes without too much concern about increasing prices. But the last six months has seen a more cautious approach with a focus on the purchasing a property for the long-term rather than quick fix.

We saw this more cautious approach play out as the last few months of 2022 saw a distinct rise in the demand for lower priced luxury properties and a declining supply of inventory, as compared to the higher-priced properties. This also may signify a return to a more normalized market where vacation-style properties were in higher demand compared to exclusive estates.

Second home purchases by the affluent are forecast to remain a high priority for the affluent in 2023, which together with the return of the tourists, both from the mainland and international venues, will drive the luxury real estate market. Hawaii’s property diversity offers the perfect fit for the wealthy’s changing priorities, that are currently focused on amenity-filled, move-in properties in locations that provide access to their preferred lifestyle choices.

The luxury market may continue to soften for the next few months, but equally prices are likely to remain at near record levels as low inventory levels will continue to exert their influence.

As in all markets, there are always opportunities and challenges for buyers and sellers for certain property locations, types and price points. The opportunity to work closely with a real estate expert familiar with local trends is the best resource to navigate the specific and varied markets found within the Hawaiian Islands.

OAHU

Solds Median Sales Price Inventory

1 % $830 $838

100.00% 96.82%

VARIANCE:

Total Inventory Total Solds Sales Price Days on Market Sale to List Price Ratio Sale Price Per SqFt. Oahu Market Summary | December 2022

• The Oahu single-family luxury market is a Balanced Market with a 16% Sales Ratio

• Homes sold for a median of 96.82% of list price in December 2022.

• The most active price band is $2,100,000-$2,299,999, where the sales ratio is 42%.

• The median luxury sales price for single-family homes is $2,285,000

3Square foot table does not account for listings and solds where square foot data is not disclosed. 4Data reported includes Active and Sold properties and does not include Pending properties.

327 451

7 % $879 $940

Median Data Review | December

Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 OAHU Attached

100.00% 98.15%

- 2 %

Oahu Market Summary | December 2022

• The Oahu attached luxury market is a Buyer's Market with a 14% Sales Ratio

• Homes sold for a median of 98.15% of list price in December 2022.

• The most active price band is $750,000-$799,999, where the sales ratio is 31%.

• The median luxury sales price for attached homes is $915,000

Homes

Single-Family Attached

Island of Hawaii

ISLAND OF HAWAII

ISLAND OF HAWAII

13-Month Luxury Market Trend4

Single-Family Homes

Median Data Review | December

Sales Price

129 % 59 135

- 41 % 41 24

$1.65m $1.43m

- 13 %

Days on Market

Sale to List Price Ratio Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022 Dec. 2021 Dec. 2022

867 $613

VARIANCE: Total Inventory Total Solds

- 29 %

VARIANCE: - 4 % 26 25

Island of Hawaii Market Summary | December 2022

• The Island of Hawaii single-family luxury market is a Balanced Market with an 18% Sales Ratio

• Homes sold for a median of 98.42% of list price in December 2022.

• The most active price band is $1,200,000-$1,299,999, where the sales ratio is 64%

• The median luxury sales price for single-family homes is $1,427,500

• The median days on market for December 2022 was 25 days, down from 26 in December 2021.

3Square foot table does not account for listings and solds where square foot data is not disclosed. 4Data reported includes Active and Sold properties and does not include Pending properties.

ISLAND OF HAWAII Attached Homes

Median Data Review | December

117 % 29 63

100.00% 99.05% VARIANCE: 8 % $769 $828

VARIANCE: - 1 %

7

11 27

VARIANCE: 145 %

• The Island of Hawaii attached luxury market is a Balanced Market with a 17% Sales Ratio

• Homes sold for a median of 99.05% of list price in December 2022.

• The most active price band is $1,000,000-$1,099,999, where the sales ratio is 100%.

• The median luxury sales price for attached homes is $1,570,000

• The median days on market for December 2022 was 27 days, up from 11 in December 2021.

ISLAND OF HAWAII Sales Activity

Single-Family

Attached

Maui Hawaii

MAUI

13-Month Luxury Market Trend4

Single-Family Homes

Median Data Review | December

96.67%

- 3 %

• The Maui single-family luxury market is a Buyer's Market with a 10% Sales Ratio

• Homes sold for a median of 96.67% of list price in December 2022.

• The most active price bands are $1,700,000-$1,799,999 and $4,900,000-$5,899,999, where the sales ratio is 40%

• The median luxury sales price for single-family homes is $2,159,500

• The median days on market for December 2022 was 92 days, up from 82 in December 2021.

13-Month Luxury Market Trend4

VARIANCE: 81 % 48 87

VARIANCE: 1 % $1,630 $1,646

Median Data Review | December

VARIANCE: - 56 % 34 15

100.00% 97.30%

VARIANCE: - 3 %

VARIANCE: - 23 % $2.33m $1.80m

68 77

VARIANCE: 13 %

Maui Market Summary | December 2022

• The Maui attached luxury market is a Balanced Market with a 17% Sales Ratio

• Homes sold for a median of 97.30% of list price in December 2022.

• The most active price band is $1,200,000-$1,299,999, where the sales ratio is 75%.

• The median luxury sales price for attached homes is $1,795,000

• The median days on market for December 2022 was 77 days, up from 68 in December 2021.

Single-Family Attached

Kauai Hawaii

Single-Family Homes

13-Month Luxury Market Trend4

Median Data Review | December

Kauai Market Summary | December 2022

• The Kauai single-family luxury market is a Buyer's Market with a 11% Sales Ratio

• Homes sold for a median of 96.60% of list price in December 2022.

• The most active price band is $1,300,000-$1,399,999, where the sales ratio is 100%.

• The median luxury sales price for single-family homes is $1,629,504

• The median days on market for December 2022 was 61 days, up from

13-Month Luxury Market Trend4

Median Data Review | December

31 52

$930 $798

VARIANCE: - 14 %

99.10% 96.42%

VARIANCE: - 3 %

26 84

VARIANCE: 223 %

Kauai Market Summary | December 2022

• The Kauai attached luxury market is a Buyer's Market with a 13% Sales Ratio

• Homes sold for a median of 96.42% of list price in December 2022.

• The most active price bands are $950,000-$999,999 and $1,100,000-$1,199,999, where the sales ratio is 50%

• The median luxury sales price for attached homes is $1,345,000

• The median days on market for December 2022 was 84 days, up from 26 in December 2021.

Single-Family Attached

Luxury

IS IN EACH DETAIL.

HUBERT DE GIVENCHY

North American Luxury Review

A Year in Review - 2022

The best way to describe 2022 might be that it started with a ‘boom’ and ended with a ‘fizzle’ – certainly this is an apt description when looking at the declining sales each month over the last year. At the start of 2022, new inventory, especially for property types in high demand, flew off the shelf, but by the end of 2022, sales had all but stalled in comparison.

Predictions versus Reality

2022 had been predicted to be a calmer year, with trusted trends, such as the spring real estate market returning with increased inventory levels, that would help plateau price increases. Demand was still predicted to be strong for luxury properties, but with the frenzy of 2021 replaced with a more discerning consideration of the property’s value.

What had not been predicted was the influence of variables such as Ukraine, inflation, interest rates, and speculation about recession, which created a year of contradictions, uncertainty, and unexpected consequences. However, despite all these mitigating factors, the overall luxury real estate market remained resistant to any dramatic or negative change and still retains its safe investment appeal to the affluent. Even though there has been a continued slowdown in sales activity in the last quarter, prices have not only remained stable in most luxury markets but at near-record levels.

Sales activity and price growth at the rate seen from March 2020 to March 2022 could not continue indefinitely, and although the slowdown may have felt dramatic compared to these last two years, the reality is that the market has returned to the more normalized pace of pre-pandemic days rather than there being a significant correction.

Inventory A Major Player in 2022

Inventory levels certainly controlled much of the buying narrative during 2022. The number of sales in the first quarter of 2022 was only limited by the lack of new inventory entering the market, as the number of homes for sale hit a 20-year low.

While there was a significant increase in the listing of properties in the market in the second quarter of 2022, this only served to bring the level back up to the point that gave buyers a little respite–the result of which was an increase in the number of sales.

2022 Inventory vs. Sold

By the third quarter, interest rate hikes saw luxury sellers hesitate to put their homes on the market as they were unwilling to give up their low interest rates. According to Jim Egan, Morgan Stanley’s U.S. housing strategist, “Over 90% of the market is fixed rate, for one. Most people have locked in their affordability.”

Inventory, especially new inventory, is critical in the luxury real estate market. The lack of it helped stabilize the price and saw many markets remain more favorable to sellers. Consequently, by the end of 2022, the market had all stalled. Luxury sellers chose not to enter the market because they saw that rising inflation and interest rates were causing hesitation in buyers, and they feared they would not get the same price their neighbors had received the previous year.

Outside Influences Impact on the Luxury Market

Three key influences played a significant role in the slowdown of sales.

• Interest Rates

Luxury buyers, for the most part, are less affected by the rise in interest rates. However, the dramatic increases in 2022 saw that potential sellers chose not to list their homes, realizing that they would double their interest payments if they secured a mortgage on a new property.

• Stock Market

Corrections in the stock market made luxury buyers more cautious – especially if they were looking to leverage their equity portfolio. The downturn saw corrections of more than 10% as the starting point that had many real estate investors hunker down and wait for stability to return.

• Inflation

Rising inflation and constant predictions of recession also gave affluent sellers and buyers a reason to pause. With so much uncertainty and speculation, especially in the last six months of the year, as to the possible implications on the value of homes, those who did not need to sell didn’t, and buyers hesitated to commit for fear of paying too much.

Inventory Sold

Luxury Properties Retain Their Strong Appeal

Despite the impacts of these outside influences, buyers are still eager to invest in luxury real estate, especially if they can negotiate more favorable terms. Properties are still selling if they are priced right or hold a special appeal to a current purchaser and, most importantly, are move-in ready – a demand that is still high on the requirements for most buyers.

Cash buyers have returned during the last six months – previously, even the ultra-wealthy were taking advantage of the historically low interest rates. In today’s market, sellers are keen to work with cash buyers as the transaction is less risky as it does not rely on an institution to provide funds or change their mind on pre-approved funds.

Leveraging their cash may be a short-term proposition for many affluent buyers, who, with an eye on the longterm investment potential of their luxury property, will at some time refinance, especially when interest and loan rates start to shift downward.

Real estate is still considered to be one of the safest investments as, historically, capital values have appreciated year over year, and even though the rate of return may fall compared to the last two years, expectations are that home values will continue to climb.

A Buyer’s Market, but Not Quite!

Buyers have been able to take advantage of the slower market, even though prices have not fallen to the levels that some had hoped. For the first time in two years, they have had more opportunities to buy a property without severe competition from multiple buyers and increasing prices leaving them out of the bidding game.

While there are more opportunities for price negotiation, there are even greater possibilities to include more favorable terms, such as requesting longer closing times, closing costs, or the completion of renovations within their offer, all of which were rarely seen during the last few years as fierce competition drove sales.

Taking a Longer-Term View

Ultimately, the major lesson from 2022 has been that market corrections can shift fast, so taking a longer-term view on investing in real estate, especially luxury properties, is an important consideration.

Equally, we have seen a swing in the appreciation of a property from being another investment asset to one of major importance in people’s lives. The affluent are willing to pay for a luxury property that provides for their security, safety, and overall well-being.

Properties, whether primary, secondary, or investment, are being purchased by the affluent with future requirements in mind, and if a property meets their criteria, whether interest rates are high or not, this will often have little impact on their decision.

Future Expectations

As we head into a new year, we expect the luxury real estate market to remain softer than last year, but it is important to remember that we are simply returning to a more normalized market. Expect properties to stay on the market longer, prices not to drop significantly, and the affluent to make decisions based on long-term investment.

We highly recommend working with a luxury property specialist during this unconventional market to ascertain what is truly happening in your local marketplace. The art of selling and buying in this market needs a critical and analytical approach; understanding the realities and setting expectations accordingly will ensure that goals are achieved.

For the Luxury North American Market

Luxury Monthly Market Review

A Review of Key Market Differences Year over Year

Single-Family Homes

2,395 6,054 $88,693 15 50.57%

Single-Family Homes Market Summary | December 2022

• Official Market Type: Seller's Market with a 24.20% Sales Ratio.1

• Homes are selling for an average of 97.74% of list price

• The median luxury threshold2 price is $950,000, and the median luxury home sales price is $1,232,500.

• Markets with the Highest Median Sales Price: Vancouver ($2,500,000), Whistler ($2,500,000), Los Angeles ($2,500,000), and San Francisco ($2,500,000).

• Markets with the Highest Sales Ratio: South Shore (72%), Hamilton County (67%), St. Louis (66%), and East Bay (57%).

Luxury Monthly Market Review

A Review of Key Market Differences Year over Year

Attached Homes

New Listings Total Sold Sales Ratio Med. Sale Price 585 2,434 41.25%

Attached Homes Market Summary | December 2022

• Official Market Type: Balanced Market with a 19.93% Sales Ratio 1

• Attached homes are selling for an average of 98.12% of list price

• The median luxury threshold2 price is $700,000, and the median attached luxury sale price is $864,623

• Markets with the Highest Median Sales Price: Vail ($2,000,000), San Francisco ($1,950,000), Aspen ($1,800,000), and Whistler ($1,750,000).

• Markets with the Highest Sales Ratio: Howard County (208%), Nashville (101%), East Bay (99%), and Santa Barbara (89%).

Luxury Monthly Market Review Attached Homes

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