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Kohala Ranch Vacant Lot Sales 2022

The number of Kohala Ranch home sales in 2022 dropped 25% compared with 2021ʻs feeding frenzy. Buyers who could not find the home that suited their criteria turned to vacant lots they could build on, for a record number of 71 sales in 2021. In 2022, that dropped to only 31 sales, a decline of 56%. That takes us back to the 2020 level — which was when we saw the start of the hot market for land sales at Kohala Ranch, with the developer also noting and beginning to put his remaining lots up for sale. There was a similar pattern in both residence and land sales, in that 2/3 of those sales occurred in the first half of the year.

Whatʻs to come in 2023? Read on for my surprising discovery about the current Kohala Ranch vacant land listings.

Kohala Ranch Summit Home Under Construction

With fewer homes for sale at Kohala Ranch, buyers turned to the option of buying vacant land to build on. This is one of dozens of homes currently under construction.

Number of Kohala Ranch Lot Sales Drop But Prices Increase in 2022

The pattern of land sales at the Kohala Coast gated community Kohala Ranch was very similar to the pattern of residential home sales in the community for 2022. Key points:

  • Fewer sales than in 2021
  • High average prices than in 2021
  • A slowdown in the second half of the year.
Summary – 2022 Vacant Lot Sales at Kohala Ranch
# Lowest Highest Average Median Mode
Listings 31 $250,000 $625,000 $444,706 $450,000 N/A
MLS Sale $ 31 $269,000 $610,000 $436,326 $445,000 N/A
DOM to sale 31 2 210 67 67 N/A
Sale/Current Price 31 85.2% 110.0% 98.1% 98.3% 100.0%
Sale/Original Price 31 81.2% 112.7% 97.5% 97.8% 100.0%
Price per Land SqFt 31 $1 $14 $4 $2 N/A

As longtime readers of this blog might remember, Kohala Ranch spans elevations from 200ʻ above sea level to 3,000ʻ above sea level and lot sizes range from under 1 acre in the Heathers II section, to almost 14 acres in the Summit section. Most Heathers and Meadows lots are roughly 3 acres; Meadows II lots are 5 acres. Price/sq ft or acre is a pretty meaningless number as building requirements and possibilities are similar regardless of lot size. Typically the value of a lot is related to the quality of the ocean, sunset, mountain and coastline views; the typography and ease of building; any existing sitework or plans that could simplify, shorten or reduce the cost of the approval and building process.

Lot prices have been cyclical over time; lots that sold for $600,000 at the previous peak in the mid-2000s fell to half that value when the market slowed after 2008. Because the holding costs were low (very low until the free range cattle disappeared from Kohala Ranch), many owners bought a lot to hold for a future retirement date that was decades in the future. When I evaluated the lower North Kohala gated community vacant lot inventory in 2019, only 41% of the lots in Kohala Ranch had homes built or in progress.

One factor driving the price increases in recent years was the developer releasing some of his remaining inventory in Meadows II and Heathers II sections. Over one-third of sales in 2021-2022 were prime developer inventory.

Active Kohala Ranch Lot Listings and Outlook for 2023

Kohala Ranch Meadows II listing

View from a Kohala Ranch Meadows II active listing of 5 acres offered for $565,000

There are currently 31 active lot listings at Kohala Ranch, at prices ranging from $297,000 for 4.57-acre Meadows lot to $712,500 for a 10.26 acre Summit lot. Clearly there are characteristics that differ between these two lots: size, views, ease of building. What they have in common with each other – and in fact what 20 of the 31 vacant lots for sale have in common with each other — is that they were purchased by the Sellers since 2020.

In other words, two-thirds of the current Kohala Ranch lot listings are sellers who bought in the recent hot market. Not all them have the same reasons for selling. Some realized how long it would take them to build and decided to buy a home instead. Some are just trying to make a profit. And some are selling for the usual reasons, meaning life happened.

As of this writing there is not a single lot in escrow, and we are about half-way through what would be the high season if the old cycle of real estate sales mirroring visitor arrivals were re-establishing itself. If sales activity for the year is back to 2017 or 2019 levels, there is around 18 months of inventory. If we hit the low level of 2018, this looks like 3 years of inventory. I would expect that the listings that are $100,000 over what the seller paid a year ago will linger, driving up average days on market.

In short: my take is that this may be the start of a buyerʻs market for vacant land at Kohala Ranch, with some pretty decent inventory to choose from. Just make sure you get the scoops on comparable sales for the lot you like before you make an offer.

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Abdulla Junaid

February 14, 2023

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