Despite concerns over the end of free range cattle grazing and short term vacation rentals at Kohala Ranch, 2019 so far is seeing the strongest residential sales in this Kohala Coast gated community since 2016, both in terms of numbers and the highest sales price achieved of $2,700,000. With six months of 2019 in the rear view mirror, we have 10 closed sales, and four more listings are in escrow.
The last time there were more than 14 sales in a year in Kohala Ranch was in 2005, the peak market for this community in both prices and activity. That is also the last time we saw a sales price higher than $2,700,000.
Prices Shift Higher for Kohala Ranch Homes – But Remain Far Below Their Last Peak
At mid-year 2018 I reported that more homes sold at Kohala Ranch in the first six months of 2018 than in the entire year of 2017, with nine sales completed or pending. In the end, 12 Kohala Ranch residences sold in 2018. The pace of sales is variable at Kohala Ranch, from 6 to 14 annual sales throughout the ups and downs of the cycle, but over the past 10 years on average 10 homes sold per year.
So far this year there have been three Kohala Ranch sales over $2 million, and one just grazing that number at $1,950,000, after two years in which all the homes sold for less than that ceiling. Prospective Kohala Ranch buyers might be interested to know that one of this yearʻs three sales that topped $2 million was a home that sold for $3,920,000 in 2005 and changed hands this year for $2,330,000. That 2005 eye-popper was the only sale over $3 million ever recorded in Kohala Ranch.
Sellers might be interested to know that not a single home has sold below $1 million at Kohala Ranch this year, and we have to go back to 2008 to find the last year that was the case. The lowest priced listing as of this writing is $1,473,000 (MLS 623672)
I expected to see more listings of homes that had been used as vacation rentals, as owners woke up to the new reality. However, only two current listings have been used as vacation rentals, and both had been on the market prior to the passage of the new legislation, so sellers had already decided to sell. Two of the four highest priced sales this year had also been short term rentals when the owners were not in residence. The question is whether limiting the Kohala Ranch market to buyers who do not want or need to rent will put downward pressure on prices. At this point, it seems not to be a factor, or perhaps only at the margin.
Also of note: two of the homes sold in the Meadows were modestly-sized spec homes (around 2,100 sq ft) selling right around $1.2 million with great ocean views but no swimming pools. Add a swimming pool and a lower elevation and then the price, whether at Kohala Ranch or elsewhere along the Kohala Coast, will climb nearer to $2 million.
Are Any of the Active Kohala Ranch Listings Good Buys?
Letʻs say you are a prospective buyer sold on Kohala Ranch, but nervous about where we are in the real estate cycle. Or the direction of mortgage interest rates. Or the potential of more sellers and fewer buyers as the short term vacation rental regulations take effect. How would you hedge your bet?
There is a cluster of Kohala Ranch homes for sale at around $1.5 million, mainly in the lower Heathers section. Most of them need some updates or new kitchens, or they might have uncommon floor plans. You can always remodel to fix finishes or floor plan. What you cannot change is the view. In my opinion, your best hedge at Kohala Ranch is always the view.
Let me know if you have questions or would like to see any of the Kohala Ranch properties.