More than half way through 2022, with the general economic mood having shifted from exuberance to nervousness, the question I get asked in every call, by buyers and sellers alike, is whether it is yet a buyerʻs market, and whether prices will be coming down. Luckily I can now direct them to Hawaiʻi Lifeʻs newly released detailed statewide Luxury Market Report for the first half.
The focus of our Hawaiʻi Life Luxury Market report is the real estate segment over $3 million in sales price, with additional focus on the subsegment of ultra-luxury properties listed over $10 million, where we are the market leader in sales. I have been pouring over the data, trying to understand how to best serve my seller and buyer clients. (Just ask if you prefer me to email you the report rather than trying to download it from the link)
Without going into spoilers, the data say “no” to the buyerʻs market notion as there is still too little inventory in most luxury market locations. As the report says “Indeed, in the luxury and ultra-luxury market segments, we’re turning countless would-be buyers away, not just for lack of quality inventory, but for lack of any inventory.”
Our Kohala Coast resort market is still inventory-challenged at the luxury level. I continue sending out “I have a buyer” letters with no success. In the North Kohala market where a luxury listing is typically a home on acreage, we still are seeing demand, but at least we have a handful of outstanding listings both in gated communities and outside them.
The Luxury Home Market in North Kohala – Inside and Outside of Gated Communities
As the Report notes, there is a new segment of mobile luxury buyers who can live anywhere and who want privacy, a high-value location, and a more sustainable lifestyle. Once upon a time North Kohala luxury homes were mainly to be found in the gated communities like Puakea Bay Ranch and Kohala Ranch. In recent years we have seen newer luxury homes built on large acreage outside of the large communities by owners who valued more acreage with freedom from restrictive CC&Rs and active homeowner associations.
Compared with other Hawaiʻi North Shore markets (think Oʻahu and Kauai), North Kohala Big Island luxury real estate is attractively priced. The highest sale last year was $4,150,000 for two essentially oceanfront lots totaling 43.89 acres with a small home on one of them. To date in 2022, the Puakea Bay Ranch equestrian property with an extra parcel (total 20 acres) that sold for $4,110,000 is our highest sale.
There are only seven North Kohala homes for sale fitting the luxury home cut-off of $3 million (thatʻs including one at $2,995,000). Three are in Kohala Ranch and one is in Kohala Waterfront. That leaves only two options outside of these communities, and each of them will appeal to a different buyer.
Two Hawi Homes on Acreage with Agricultural Potential
Five years ago I fell in love with a working farm on 141 acres stretching between Hawi and Kapaʻau and included it in this blog post about ocean view estates with large acreage then for sale. Be sure to check out the video of my preferred building site in that post.
The existing home on the property is a modest 1,360 sq ft with three bedrooms — perfect for stays while you build your primary residence, or for a live-in caretaker. Because there are two parcels included in the sale, no special applications would be required to build another home, and in fact there are home plans by a respected local architect available to speed up the process if you like them.
The other currently active listing of a luxury home on acreage near Hawi is makai (ocean side) of the highway just around the corner from Puakea Bay Ranch as you head along the coastal highway into Hawi town. This is a completely different proposition: the owners added detached bedroom suites, an infinity-edge swimming pool, and upscale architectural detail to a home they bought at Puuepa Ranch (a small subdivision of thirteen 20-acre lots with big ocean views and cattle grazing), transforming it entirely on the inside, while keeping the exterior suited to the location.
Cattle currently graze the acreage but horses and equestrian facilities would fit the landscape as well.
If none of these options checks the boxes for you, feel free to reach out so I can keep you in mind when new listings appear. None of these are cookie-cutter homes, so you might need to be patient or flexible to find whatʻs right for you in a small town, low inventory environment.