Truly a buyers market on the Kohala Coast - the numbers July 20, 2008
Posted by brobinson in : Mauna Kea Resort, Mauna Lani Resort, Puako, RE Market, Waikoloa Beach Resort , add a commentI’ll start this analysis with an anecdote. Towards the end of 2007 I attended a broker’s open at a beautiful house on the Kohala Coast. Over wine and pupus, the main topic of conversation was whether to take yet another overpriced listing at any of the newer condo projects where the supply of resale listings already was 4 or 5 years at current annual rates–or to pass and let it go to another agent. Developers with unsold inventory were undercutting the market with incentives and price reductions, but for the most part owners were unwilling to even contemplate that they’d bought at the market peak and in the short-term the value of their investment had fallen.
The story the numbers seem to me to tell is that in the first half of 2008, sellers have become more realistic and the condo resale market has picked up at Mauna Lani and Waikoloa Beach Resort. Perhaps too, buyers realize that although you can’t find the bottom of the market until you see it in your rear-view mirror, it is plain that mortgage rates are headed up, which can matter more to a monthly carrying costs than a bit more or less in price.
The analysis that follows is only for the under-$3 million market, as I covered the upper end in my earlier post.
Let’s start at the top (north, in my geographical view) with Mauna Kea. Just as in the lower resorts, the condo market is dominated by developer unit sales. Both of the Mauna Kea projects in the uplands, Kumulani and Wai’ula’ula, were sold pre-construction, so the 22 sales reported in the first half 2007 were largely made in earlier years. Eight of these homes in developer projects closed in the first half of this year, and as of yet no resales. The price trend is also similar to the other resorts: all of the sales in 2007 were over $1 million, but four of the sales in 2008 were under $1 million–that’s 50% of the condos sold! In the first six months of each year two residential properties were sold in this under $3 million range. Again, as in the higher end of the market, land sales dropped from two to zero.
Moving down the coast to the Mauna Lani resort, the condo resale market took a 25% surge from 16 to 20 sold (and developer inventory sales doubled from 9 to 18 as Kulalani and Ka Milo sales began to close escrow. Here too, the downward creep in pricing is evident. Whereas in the first six months of 2007 there were no sales below the $600,000 threshold, in 2008 six out of the twenty sales were under $600,000! Reported land sales dropped from 3 to one lonely sale so far this year.
Digging into the detail at Mauna Lani, what comes to mind is the old saw: “What are the three most important things to look for in a real estate investment? Location, location location!”. Resale volume and pricing at Mauna Lani Point and Mauna Lani Terrace is strong, especially for nicely updated units. The emerging winner in resales at newer projects looks to be the Villages in Mauna Lani, which is not surprising given the Maryl quality construction and proximity to the new Shops at Mauna Lani. These taken together represent the solid higher end of sales, over $1 million creeping up to just over $2 million.
Continuing down the coast to the Waikoloa Beach Resort, the first six months of 2007 recorded 13 sales (taking out developer inventory). In the corresponding period of 2008, hold on to your hats!, 19 sales reported means almost a 50% jump in volume! And the reason? Only one sale in the 2007 period under $500,000, compared with seven sales in 2008. The higher end of this resort (over $1 million which is only at the Centex-built Kolea and Halii Kai) was stable at 4 sales in 2007 and 3 in 2008 (first six months.)
Just to round out the picture, it is also the lower end of Puako that sold in the first half of this year: two residential sales last year at $1.8 and $2.0 million were replaced by two sales in the first half of this year at $855,000 for a lot with a tear-down cottage, and a Puako Beach Apartment for $250,000 including the fee in this leasehold complex.
A hui hou,
Beth
beth@hawaiipalmproperties.com
Cell: 808-443-4588
Hawaii Palm Properties, Inc
Office in downtown Hawi near Bamboo restaurant
www.hawaiipalmproperties.com
Walk to the Beach - Part 2 April 23, 2008
Posted by brobinson in : Puako , add a commentIf you simply MUST be walking distance from the beach but don’t want to be within a Kohala Coast resort, Puako is your town.
Here the “mostly makai” of our blog title is taken to an extreme when it comes to pricing. Houses line both sides of the road (yes, there is The Road, not roads plural). Mauka of the road, where a walk to the beach requires you to cross the street, the price of a lot with a tear-down cottage is in the $1 million range. For example, recently under contract is an 816 sq ft cottage on 14,000 sq ft lot that was listed for $1,050,000.
On the beach side of the road, that little cottage on one-third of an acre will cost three times that. A nice beach home? As in the resorts, you are now in the $6-8 million and up range.
The big splash of the season down Puako way (aside from those made by breaching humpbacks) was the release of the eight lots of One Puako Bay. This is a gated enclave, thus offering a bit more security for its residents. And yes, the location is spectacular. These are not large lots, approximately half to two-thirds of an acre, in keeping with the Puako aesthetic. Coming up on 80 days none have sold yet, so if building is your dream, you can have the pick of the litter!
A hui hou
Beth
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Beth Thoma Robinson R(S) CELL 808-443-4588 OFFICE: 808-889-1295 beth@hawaiipalmproperties.com |