BY BETH THOMA ROBINSON — The Kohala Coast resort real estate market has reached an inflection point in 2012 with the under $500,000 inventory disappearing, the mid-range ($500,000 – $1 million) firming as short sales and foreclosures are scarce, and the over $1 million condo market showing real strength, especially in developer new construction.
In the first half of 2011, 10 condominium properties listed for over $1 million were sold between Mauna Kea, Mauna Lani, and Waikoloa Beach Resorts. This year, there are already 9 closed sales in mid-April, with another 10 high-end condo sales pending!
In this market segment we are looking to obtain relative value through negotiation rather than wishing fruitlessly for screaming deals…and in many cases, these properties are for the buyer who is willing to pay well for quality and location, knowing that the downside is low.
Developer Sales Attract Upper End Buyer
In the over $1 million price point, over half of the closed sales this year, plus two of the pending sales, were in just two projects: Kauna’oa at Mauna Kea Resort and Ka Milo at Mauna Lani Resort. The properties in question are technically “condos,” but in actuality are spacious homes; paired town homes in the case of Halia Hale at Kauna’oa and single family homes within the condo community of Ka Milo. As such, they offer more privacy than an ordinary condo, but at an affordable price point compared with buying or building a true single family home in either of the two resorts.
Other than that, the two communities are quite different.
The twenty ocean view town homes built by the developer at Kauna’oa share the fabulous amenities with owners building on the lots which occupy the remaining acreage…and best of all are the only new construction ocean-side of the highway at Mauna Kea Resort…a golf cart ride or walk to the hotel’s beach. Asking prices on the two remaining are $2.1 million and this year’s closed sales ranged from $1,950,000 to $2,800,000.
Ka Milo also consists of stand-alone or paired homes, but the entire community shares its amenity area with the Kulalani condominium community next door. These homes have little or no ocean view, but many buyers enjoy the proximity to the Shops at Mauna Lani in one direction and Fairmont Orchid in the other. During the peak years, the paired homes sold for prices comparable to what single family homes are going for now: $1.3 – $1.4 million.
Since Ka Milo’s inventory is currently depleted, I’d recommend looking across the street at the Villages at Mauna Lani. One closed sale at over $1.5 million and another in escrow at $1.4 million asking…but you still have your choice of an Alii floor plan with pool for $1,695,000 asking (MLS# 245887)…or go for broke with the just listed completely furnished Kahili next door, with two vehicles included for $1,895,000 (MLS# 253808)
Kohala Coast Condos Walking Distance From the Beach Command Premium Pricing
Mauna Lani Terrace, Mauna Lani Point, and Kolea at Waikoloa Beach Resort make up the majority of the remaining sales in this over $1 million price point and dominate the $2 million range. What these three communities have in common is their proximity to beaches.
Since you can do an awesome job of upgrading and redecorating for around $100/sq. ft. – but the view is forever – one value purchase at Mauna Lani Terrace or Point is a big ocean view but un-renovated unit (these were, respectively, the first and second condominiums built at the resort). The other way to go is less view, but upgraded interior.
In the latter category, Mauna Lani Terrace L201 is looking attractive after the price reduction this week to $1,250,000 (MLS# 243631)…compared with two sales of 2-bedroom units last year at $1,600,000 and $1,650,000 and one pending at an asking price of $1,485,000.
Over at Kolea, there was only one sale last year of a penthouse condo, bank-owned after foreclosure. One of those rare situations in which a bank mispriced, the list price of $1,390,000 was bid up to $1,569,000 (unfurnished, as is condition). Buyers sat it out for a bit hoping for another bargain basement sale.
The reality that no more of these beauties are in the distress pipeline has now set in with buyers: two third floor Koleas villas are in escrow at asking prices of $2,200,000 and $2,450,000. (A third pending sale is a lease-with-option). My choice among the remaining third floor units is in Building 8, asking price $2,095,000 (MLS# 220238).
In case you are wondering, at the peak these were $3 million condos, unfurnished. The majority of buyers I’m seeing in this market segment are buying for their family’s use, and getting the lowest price is secondary to finding the right home and lifestyle. About a third of the buyers are financing, since interest rates remain attractive on jumbo loans.
Beth Thoma Robinson, R(B) is with HawaiiLife.com