The number of vacant lots sold in Kohala Ranch again rose dramatically for a second year, with 32 completed sales in 2020 and nine additional sales pending as we open 2021. That was not surprising given the real estate market trends overall in 2020. Many of the buyers who viewed my home and lot listings told me weighing the alternative of building, particularly as inventory became scarce.
The statistics are only part of the news for those considering a purchase of vacant land at Kohala Ranch. The other big news in 2020 was the issuance of revised Design Guidelines for the first time since 2009.
Kohala Ranch Vacant Land Sales Increase Without Price Increase
A year ago I wrote that about 60% of the 519 parcels at Kohala Ranch were vacant, even including the 23 homes under construction at that time. But looked at from another perspective, over 10% of the unbuilt lots at Kohala Ranch changed hands last year.
The two vacant lots I listed last year sold to very different buyers. One buyer, himself a contractor, had a survey crew out to begin the design review and permitting process within a week of closing. The other buyers intend to keep the land for their heirs while enjoying frequent lunches and sunsets at the picnic table I used for staging that they asked to be included in the sale.
The large number of available vacant lots helps explains how even with volume increase from 18 sales last year and almost triple the 11 sales in 2018, prices did not increase correspondingly, with the median price edging up only $12,000.
The lowest price was a mere $129,000 for a lot in the Meadows. The highest priced lot sold was in the lower Heathers elevation. But although it was the highest sales price in 2020 at $450,000, the lot had been purchased by the sellers in 2004 for $555,000! While home prices have shown a strong recovery over the cycle, lot prices have not.
The most expensive current vacant listing is a lot in the Heathers asking $549,000. The lot directly above with almost identical acreage and views sold in November 2020 for $199,000, and the lot directly across the street is in escrow, asking price $245,000. It pays to shop carefully!
The Big News: Kohala Ranch Design Guidelines Tighten in 2020
Land buyers doing their initial search often inquire about Kohala Ranch lots because of these low prices for 3-10 acres, comparable with vacant lot prices for 10,000 sq ft home sites in Kapaau or Waikoloa Village. They are then surprised to learn that in a gated community with strict CC&Rs, their cost to build will mean they end up with a $1 million home as many lots need significant site work, there are restrictions on materials and design details, and even minimum landscaping requirements.
Up until last year, the minimum size for a Kohala Ranch home on a 3-5 acre lot, according the Design Guidelines, was 2,000 sq ft of interior space. And that was flexible in recent years. Only a couple of years ago buyer preferences were for smaller homes, particularly in a community like Kohala Ranch where many owners were retirees or part-time residents. With few homes under construction, the Architectural Control Committee allowed some smaller homes to be built, like a home of only 1,700 sq ft currently in escrow (and listed at $1,495,000).
Fearing a diminution of home values, Kohala Ranch homeowners convinced the Board to adopt revised Guidelines, increasing the minimum home size to 2,500 sq ft regardless of lot size (note: the smaller Heathers II lots have their own Design Guidelines). Feel free to contact me if you would like to review the Kohala Ranch Design Guidelines and discuss whether the home of your dreams would fit here.