With all of the volatility in the stock market and uncertainty about the Coronavirus (COVID-19), some are concerned we may be headed for another housing crash like the one we experienced from 2006–2008. The feeling is understandable. Ali Wolf, Director of Economic Research at Meyers Research, addressed this point in a recent interview:

“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”

There are many reasons, however, indicating this real estate market is nothing like 2008. Here are five visuals to show the dramatic differences — and why this matters for homebuyers and sellers in Kihei, Wailea, and throughout Maui.

1. Mortgage standards are nothing like they were back then.

During the housing bubble, it was difficult NOT to get a mortgage. Today, it is tough to qualify. The Mortgage Bankers’ Association releases the Mortgage Credit Availability Index, which shows how strict lending is. This is key for Maui real estate buyers who tend to bring stronger financial profiles, especially in markets like Kihei condos and Wailea condos.

2. Prices are not soaring out of control.

Below is a graph showing annual house appreciation over the past six years, compared to the six years leading up to the housing bubble. Prices in Kihei, Wailea, and other Maui communities have risen steadily, but nowhere near the explosive and unsustainable pace of the early 2000s. Limited coastline development supports long-term stability across South Maui neighborhoods.

3. We don’t have a surplus of homes on the market. We have a shortage.

A healthy real estate market needs about six months of inventory. Anything less drives prices up. In 2007, the mainland faced oversupply. Maui today experiences extreme undersupply — particularly in Kihei and Wailea — due to limited buildable land, zoning restrictions, and a natural cap on new development.

These geographic and regulatory constraints create a structural shortage unique to islands like Maui. This is one of the primary reasons the Maui market does not resemble the pre-2008 environment.

4. Houses became too expensive to buy.

The affordability formula combines home prices, wages, and mortgage rates. Back then, prices were high, wages were low, and mortgage rates exceeded 6%. Today wages have grown, rates are lower, and affordability is stronger nationwide. Even in a high-value market like Maui, these conditions create a more stable buying experience than during the bubble.

5. People are equity rich, not tapped out.

Before the crash, homeowners were aggressively borrowing against their homes. Today, most U.S. owners — and especially Maui homeowners who often hold property long-term — have substantial equity. This dramatically reduces the risk of foreclosures or distressed listings.

During the housing crash, negative equity drove foreclosures and price drops. That environment does not exist today — and Maui’s tight supply makes such a scenario even more unlikely.

Bottom Line for Kihei, Wailea, and Maui

If you're concerned we’re repeating the same patterns that led to the 2008 crash, the visuals above show why today’s market is fundamentally different. Maui’s combination of strong equity, responsible lending, and extremely limited inventory makes this a far more stable and sustainable environment for buyers and sellers.

For a deeper look at current property, view the Maui Real Estate Recent Listings.