Kohala Coast Resort Condos: Active Vacation Rental = Higher Days on Market
My two most recent listings in the Kohala Coast resorts went into escrow quickly. Other listings have been on the market for months. What do the lingering listings have in common? It is (mostly) not that they are overpriced. They are simply “active vacation rentals.”
Resort Condo as Second Home or Short-Term Vacation Rental: Which Do Buyers Prefer?
Letʻs start with Halii Kai at Waikoloa Beach Resort as an example. An astonishing 23 condos have sold so far this year, with two more already in escrow. Of these 25 sales, 8 have been my listings, which gives me an interesting data set to observe.
- 5 of my sold listings were active vacation rentals; the average days on market to sell? Over a year – 384 days
- 2 of my sold listings plus the one currently in escrow were not rentals. Days on market: 0, 1, and 7 days
- Current active listings are one for sale by owner and two active vacation rentals. Average time on market: 167 days and counting.
The truth is that right now buyers donʻt care. My two closed sales with owner occupants were both turned into vacation rentals upon closing. Although we still always get asked for rental history, 2020 was crazy in one direction (COVID restrictions against short-term vacation rentals) and 2021 crazy in the other direction (pent up demand for vacation) so recent history really does not matter.
But for sellers, it appears it was better to have a vacant, easy to show unit — both in the time required to sell and in receiving an acceptable offer at or near asking price.
Resort Condos Sell with “Virtual Showings” if Buyer Already Knows the Complex
The fact of “days on market” being nearly meaningless for heavily rented Kohala Coast resort condos is not new. I had really good listings that got listed and not sold year after year because prior to 2020 almost no one would buy without seeing in person, and most buyers came during the high season when they were crowding the very rentals they were wanting to see!
Even during the time when visitors to Hawaii were subject to a 14-day quarantine, we were still selling resort listings to buyers who had vacationed at the complex and already knew what they wanted. That was the case with a Kulalani at Mauna Lani 2-bedroom condo that we listed and sold in 24 days right after the start of the lockdown in 2020. That buyer is undoubtedly gloating as they purchased for $525,000. With prices soaring at Mauna Lani, similar units recently broke the $900,000 mark and a currently active listing is priced at $1,050,000.
We recently listed one of the rarely available 1,868 sq ft 2-bedrooms with 2-car garage. We had five parties through at an open house (mostly agents showing virtually) and daily showings before going into escrow in 17 days. The Kulalani homeowners association is still in litigation with the former developer, which limits sales to cash buyers; otherwise, we would have had a deal sooner.
Bottom line if you want to be a competitive resort condo buyer in this market:
- Work with an agent you can trust; be willing to write an offer based on a virtual showing and their advice;
- Have your proof of funds or preapproval letter ready to submit with your offer;
- Donʻt hesitate to offer near, at, or above asking price — this is not the time to negotiate if the listing is a desirable one and priced at or just above recent sales.