How Will The Wildfires Effect The Maui Real Estate Market


I want to start by saying our hearts are heavy from the loss we have suffered on Maui. I don’t think any Maui resident was unaffected, even just in a small way. If you live on Maui, chances are you have friends or family that lost everything. I grew up in south Florida, and after hurricane Andrew many of my friends lost their homes. Consequently, I always felt like hurricanes were one of the worst natural disasters. August 8th, 2023 changed my belief. A fire is so catastrophic, because your home is not just destroyed; it’s charred and reduced to a pile of ash. There’s often nothing left.. not even a wet or torn photograph. While I can’t relate to how our friends in Lahaina feel after losing their home and their hometown; we are mourning with you at the loss of our beloved Lahaina town and the great loss that our Lahaina neighbors have suffered.

The lanai of a condo in Kaanapali that we worked on in 2019 before the fires of 2023 tore through Lahaina.
A beautiful view of Lahaina before the fires from the lanai of a condo in Lahaina that we worked on in 2019.

The County of Maui has some great resources on their website dedicated to the fires, you can find that link here.

The impact of natural disasters on communities is undeniable, and wildfires are no exception. Beyond the immediate destruction and displacement they cause, wildfires can also send shockwaves through local real estate markets. The intricate interplay between property values, supply and demand, insurance costs, and public perception creates a complex landscape that’s crucial to understand for both buyers and sellers. In this article, we delve into how wildfires affect local real estate markets and what stakeholders should consider in their wake.

Property Damage and Value

When wildfires sweep through an area, they can wreak havoc on homes and properties and fire that tore through the town Lahaina on the island of Maui, Hawaii on August 8, 2023 was no exception. Properties that have been directly affected by the fires often suffer from damage ranging from mild to severe, and often completely catastrophic. Sadly Lahaina experienced the worst case scenario, and most of our homes and businesses were completely lost in this devastating event. This damage, coupled with potential lingering effects like smoke odor, and the loss of businesses on Maui can significantly impact property values. Homes that have been spared direct damage might still experience a decline in value due to their proximity to the disaster.

Supply and Demand Dynamics

A sudden reduction in the housing supply due to widespread property destruction can create a supply-demand imbalance. The displaced residents, in search of new homes, compete for the limited available properties. This competition could potentially drive up prices in Lahaina, creating a seller’s market on Maui in the aftermath of a wildfire. However, as the recovery process progresses and new construction starts, the market may eventually stabilize.

Insurance Premiums

In the aftermath of wildfires, insurance companies reassess the risk of insuring properties in fire-prone areas. As a result, homeowners may face higher insurance premiums not just in Lahaina and Kula; but all over the island of Maui and State of Hawaii for all homes, condos, and businesses. For potential buyers, this additional cost can be a deterrent, further affecting demand for properties in Maui. Elevated insurance costs can influence affordability and potentially lead to decreased property values.

Market Uncertainty

The uncertainty that follows a wildfire could cast a shadow on the Maui real estate market for years to come. Buyers and sellers may adopt a cautious approach, leading to a slowdown in market activity. Sellers may hold off on listing their properties until the situation stabilizes, while buyers might postpone their purchasing decisions due to concerns about the future prospects of the area.

Perception and Stigma

Even if a property hasn’t been directly affected by a wildfire, the stigma associated with living in a fire-prone area can impact its marketability. Buyers might be wary of investing in properties that are located in regions with a history of wildfires. This perception can lead to a prolonged marketing period and potentially lower offers from cautious buyers. We sincerely hope that the fires on Maui in August of 2023 do not lead to a long term stigma that hurts the Maui or Hawaii real estate markets.

Government Regulations

In response to wildfires, local governments often revise building codes and regulations to enhance fire resistance and prevention. While these regulations are essential for community safety, they can impact property development plans and renovation projects. Compliance with stricter codes can increase construction costs and potentially affect property values. Obviously Lahaina was the kind of town that could never be replaced. But add the advancements in building code regulations and rebuilding the town of Lahaina is likely going to be a very complicated task that will take many many years. One of the biggest challenges we have with building homes and condos on Maui is that getting permits takes at least 1-2 years! Hawaii in general, but especially Maui is known as having the slowest permitting process in the country! This was a major constraint on our housing shortage when times were good (before the Kula and Lahaina fires).

As an example, we have been working on building a small 500 square foot cottage to be a rental unit in Pukalani. It’s been about 2 years so far, and we have not received permits or gotten approval from the county. In the end, I’m expecting it to take us about 4 years total from start to finish to build our cottage. Now just imagine the county planning department being inundated with thousands of new permit applications within a few months.. How many years is it going to take them to get permits? And where will these victims live for all of these years, and who will be paying their mortgage while they are paying rent this whole time?

Now that we have thousands of families displaced and a critical need to rebuild, I am sincerely worried about how long it’s going to take homeowners to get permits and rebuild – particularly if thousands of victims apply for new permits to rebuild at the same time. Fingers crossed that Maui County comes up with some sort of fast track permitting process for victims of the fires.

Economic Impact

The economic fallout from wildfires can ripple through various sectors of the local economy. Job losses, reduced economic activity, and a decline in tourism can collectively influence the real estate market. A weaker economy can lead to decreased demand for housing, causing property values to dip.


Wildfires are a stark reminder of the vulnerability of communities to nature’s fury. Beyond the immediate destruction, these events could have lasting effects on local real estate markets on the island of Maui, Hawaii. Property values, supply and demand dynamics, insurance costs, market uncertainty, and public perception all play a role in shaping the post-wildfire real estate landscape. Buyers and sellers alike should carefully consider these factors and consult with local real estate experts to make i/nformed decisions in the wake of such events.

Today I received my first call from a Lahaina homeowner asking if we would buy their property. Sadly she had a buyer lined up and was in escrow to sell when the fire happened 8/8/23. Personally I don’t think now is a good time to sell a property in Lahaina. I’m sure some people will be forced to sell if they can’t pay their mortgage on top of their new rent, and their bank will not work with them to provide forbearance or pause payments. But if there’s any chance you can hold onto your property I think this will be in your best interest. If you can’t hold it for 3-5 years, then I would try to wait at least a few months for the dust to settle. I would suspect anyone that is looking for a property to buy in Lahaina right now is likely just looking to take advantage (except for maybe some victims or Lahaina residents that just want to buy a house that wasn’t burned while they wait to rebuild).

If you have questions or need help please feel free to reach out to Maui Home Buyers. We are heartbroken like everyone in our community, and we would like to help anyway we can; whether it’s just by answering some of your questions, giving you tips on how to work with your bank to feasibly make your mortgage payments, referring you to the best Realtors for your area/scenario, helping you find the best contractors to help you rebuild, or any other way we can use our experience to help the community of Maui and the victims of the fires.

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