We’ve written repeatedly about shrinking inventory and the start of rising prices in the Kohala Coast condo market. We’ve warned that foreclosure (REO) and short sale properties have become rare, prompting bidding wars.
I’ve been telling clients as they contact us in advance of their winter and spring visits that they need to consider sight-unseen offers, and telling long-time Hawaii real estate prospective buyers to buy NOW. We have several clients in escrow who having hesitated or made offers on condos in the past few years at lowball prices, have realized it is time for them to grab the proverbial bird in the hand at today’s prices.
Here are examples demonstrating lack of inventory, rising prices, and bidding wars we’ve seen from Waikoloa Beach Resort, Mauna Lani Resort, and Mauna Kea Resort over the past few weeks.
Wai’ula’ula at Mauna Kea 336 paired home with pool is a relative “buy” (MLS# 258537)
Bidding War and Rising Prices: Wai’ula’ula at Mauna Kea Villas Paired Homes
It was a classic moment at the most recent Kohala Coast brokers caravan. My business partner, Pam, engaged in friendly sparring with another bantam-weight listing agent as she announced her new listing at Wai’ula’ula at Mauna Kea (just to be clear, the two agents in question are physically bantam-weight, but professionally heavy-weight top producers in the Kohala Coast market).
Pam: “I have Wai’ula’ula 302 coming on the market for $1,650,000, but it is currently occupied so it won’t be available to see for another 10 days.”
TinyAgent2: “Don’t forget I have Wai’ula’ula 336 for sale for $1,499,000! I know it is not as good a location, but it is always rented and a great investment property.”
Context: the Wai’ula’ula Villas paired-homes were not flying off the shelf. One year ago, a short sale closed for $1,250,000. Earlier this year, a home that had been pulled from the market until the distressed property sold came back on and sold for $1,300,000.
Pam’s new listing received multiple offers and will close by the end of the year. The asking price of $1,650,000 was not an obstacle for a Wai’ula’ula villa in a prime location. Someone wanting a good buy should step up to the plate on 336 soon. It is the only active listing of any type (condo, paired, or single family home) at Wai’ula’ula!
Bidding War and Rising Prices: Villages at Mauna Lani
Villages at Mauna Lani 304 (MLS# 245885) is on the side closest to the Shops, but peek-a-boo!
If you are a regular reader of our blog posts and a fan of the quality construction and location at Villages at Mauna Lani, you might recall that for the past couple of years the Lehua floorplan has been consistently selling for right around $750,000. Suddenly, that price point looks like a thing of the past.
Villages 522, just down the street from the most recently sold unit 516, which went for $755,000, came on the market at $799,900. Within a week it had multiple offers. In case the bidders had second thoughts, Villages 603 came on the market a few days later at $850,000.
If you still want in the market at the lower price, you have an option: Villages 304. There is a theme emerging here, as this unit is in what would be considered a less desirable location, close to the Shops at Mauna Lani rather than a few steps from the Villages pool and amenity area. Still, the $775,000 asking price is suddenly looking pretty darn good.
Bidding Wars and Rising Prices: Waikoloa Beach Resort Condos
Yes, we still have buyers calling to ask about the availability of foreclosures (REOs) and short-sales. Our response is to warn those buyers, particularly at the under-$500,000 end of the market, to be prepared for multiple-offer situations and to write sight-unseen if necessary.
That scenario occurred just this past week with Waikoloa Fairways N33, a desirable top floor unit listed by the bank owner at $339,000. Earlier this year, two condos of this floorplan sold for $330,000. The most recent sale in September was at $340,000 for a turnkey furnished unit with a great rental track record. Now an as-is, empty bank-owned condo looks like a buy at that price!
The Hunt for Best Buys in Kohala Coast Resort Real Estate
Kolea 9H (MLS# 257655) is the lowest priced two-bedroom, offered for $830,000; looking the other way you’ll have peek of ocean
Finding “buys” for our clients is an ever-greater challenge. It is just a reality that Kohala Coast real estate prices are rising and while there are a handful of upcoming short sales and foreclosures, don’t forget that once these higher prices have been established they become the new market value for bank-owned properties as well as for non-distress sales.
My previous best-buy pick at Halii Kai, the two-bedroom 7A which was listed at $589,000, went into escrow…then the deal fell apart because the buyer had problems financing. It was pulled from the market and my understanding is it is about to be re-listed with a different agent at a higher price (probably reflecting the pricing on the three new Hawaii Life listings). Don’t know what the price will be, but 8A one building over is at $795,000.
With the Halii Kai 1,317 sq. ft. two-bedroom with ocean view edging towards the $800,000 price point, the Kolea equivalent is starting to look more in line with three listings above $800,000. Sorry if you have your mind fixed on the comps from earlier this year. All three sales this year of the two-bedroom 1,270 sq. ft. floorplan at Kolea were to my buyers, at prices ranging from $436,000 (for an REO) – $515,000. My buyer for the foreclosure was a bit concerned about the bidding war and all the additional closing costs he was asked to pay. With 20-20 hindsight, he looks pretty savvy.
Appraisals are based on sales in the past 3-6 months, which means they can lag as the real estate market rises. This presents a challenge for buyers who have to or choose to finance their purchase. We are seeing seller counteroffers in financed deals in which they ask buyers to affirm that their offer price is not contingent upon appraisal and that they have additional cash to put in to make the loan-to-value equation work if necessary. If you are a cash buyer, don’t hesitate to pay today’s prices. It looks like 2013 prices will be higher across the Kohala Coast resort real estate market.
A hui hou
Beth Thoma Robinson, R(B)