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Big Island Market Update – Kohala Coast Resort Vacant Lot Sales

I recently had an owner at Hualalai Resort look at the oceanfront lot I have listed for sale at Naupaka Place. This surprised me because, generally speaking, I find there are two very distinct types of buyers for resort property, whether a vacant lot, residence, or condo. Those two kinds of real estate buyers are in search of different lifestyles.

One buyer is attracted to a location with tremendous and exclusive amenities, and is willing to pay for them. Examples of where this buyer might land would be Hualalai or Kukio, 49 Black Sand Beach at the Mauna Lani Resort, or Kauna’oa at the Mauna Kea Resort.

The other buyer just wants to curl up in a hammock at their oceanfront property, reading a good novel, and watching their children or grandchildren make sand castles. That buyer will more likely land at Puako or Naupaka Place.

Beachfront Naupaka Place lot (MLS# 233826) offered for $2,975,000

As I look at what’s sold in the way of vacant lots at the exclusive Big Island resorts in the first half of 2011, I was also surprised to discover that the pace of sales dropped substantially at Hualalai, Kukio, and Ka’upulehu, but held steady further up the coast. I might have expected the opposite given that visitors close to Kona are finding fewer days when their views are affected by vog conditions than we’ve had for several years.

Along the Kohala Coast, five resort lots sold in the first half of the year. Two were at Pauoa Beach at Mauna Lani Resort, one at Mauna Kea Fairways South, and two at Kauna’oa at Mauna Kea Resort. None of these lots were directly oceanfront locations, but both Pauoa and Kaunaoa have access to beautiful private amenities and the homes will be walking distance from the beach. Prices ranged from $1,025,000 at Pauoa, to $2,500,000 at Kaunaoa. This pace of sales is fairly similar to the first half of 2010.

Rarely available Cape at Mauna Lani vacant lot is front row (MLS# 240848); 1 acre for $2.6 million

In contrast, ten lot sales were reported for Hualalai Resort and Kukio in the first half of 2011, compared with 20 lots sold in the first half of 2010. At the more exclusive resorts, the volume of lots sold was only 50% of last year – with a similar upper price level.

Prices ranged from $1,500,000 for a lot in Hualalai at Lipoa Place which would be near the highway with distant ocean views, to a handful of sales in the $4 million range for “front row” as none of their lots are true oceanfront. The two $4 million sales are technically at Ka’upulehu, which is the new resort area on the north side of the Kona Village Resort, with real estate sales handled by Kukio Properties.

What about the other type of buyer, who is not as interested in amenities (perhaps because they already own a lot at Hualalai and so have access to their amenities!)? My impression is that the under $4 million asking prices on oceanfront homes for sale at Kolea and Puako are depressing the market for raw land.

For example, at Kolea there are still 4 lots listed at prices ranging from $1,800,000 to $6,250,000. Meanwhile, there are 5 homes listed at prices ranging from $3,400,000 to $6,500,000. In other words, at Kolea the real estate buyer will find oceanfront luxury homes offered below replacement cost, which makes it harder to sell lots to the segment of buyers who are purely investors, or who don’t have very particular specifications for their home.

At Puako, at the moment there are only larger oceanfront parcels for sale. These acreages are offered for $5.5 million and $5.9 million, and consist of multiple lots of record, which means each allows for up to three residences to be built as a family compound or development opportunity.

Build your own family compound, or develop this $5.5 million Puako parcel (MLS# 246180)

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Katie Minkus, R(BIC)

July 8, 2011

Beth – you might be interested to know that the listing agent for the $16M oceanfront residence in Hualalai that sold earlier this year told me the buyers are going to tear the house down and rebuild. So there’s another “bare lot” comparable for you! I asked him if I could please have the gorgeous koa kitchen cabinets before the demo team comes in, and he said I should “get in line.” Sigh. One person’s trash is another’s treasure, right? (Love working the high end of the market – endlessly fascinating).

Katie Minkus, R(BIC)

July 8, 2011

Beth – you might be interested to know that the listing agent for the $16M oceanfront residence in Hualalai that sold earlier this year told me the buyers are going to tear the house down and rebuild. So there’s another “bare lot” comparable for you! I asked him if I could please have the gorgeous koa kitchen cabinets before the demo team comes in, and he said I should “get in line.” Sigh. One person’s trash is another’s treasure, right? (Love working the high end of the market – endlessly fascinating).

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Beth Thoma Robinson R(B)

July 9, 2011

@ Katie, How many times do we hear that in Puako too, that a house you or I would dream of owning is considered a tear-down by the new buyers? It interests me to try to guess which of today’s “must have” high end items will make the house seem dated 10 years from now. Or whether a distinctive style (Balinese pod home comes to mind) will make it hard to sell down the road. To your point, if your location is front row at Hualalai (or maybe oceanfront Naupaka for that matter), there will still be a buyer!

Beth Thoma Robinson R(B)

July 9, 2011

@ Katie, How many times do we hear that in Puako too, that a house you or I would dream of owning is considered a tear-down by the new buyers? It interests me to try to guess which of today’s “must have” high end items will make the house seem dated 10 years from now. Or whether a distinctive style (Balinese pod home comes to mind) will make it hard to sell down the road. To your point, if your location is front row at Hualalai (or maybe oceanfront Naupaka for that matter), there will still be a buyer!

Erik Hinshaw

July 9, 2011

I think the recent Tsunami had a lot to do with it as well. As Hualalai was hit and closed for a while many possible Hualalai buyers vacationed elsewhere this spring. Similarly it also depressed oceanfront sales. I helped one savvy buyer get a great deal on an oceanfront home during this period. The smart buyer will snatch up oceanfront or Hualalai/Kukio lots while the competition is low.

Erik Hinshaw

July 9, 2011

I think the recent Tsunami had a lot to do with it as well. As Hualalai was hit and closed for a while many possible Hualalai buyers vacationed elsewhere this spring. Similarly it also depressed oceanfront sales. I helped one savvy buyer get a great deal on an oceanfront home during this period. The smart buyer will snatch up oceanfront or Hualalai/Kukio lots while the competition is low.

Debbie

August 9, 2011

Great post, thank you! We’re in the beginning stages of planning our Hawaiian vacation and doing a lot of research. One of our favorite Big Island resorts is Sheraton Sheraton Keauhou Bay – looks so nice and they have a lot of great deals!

Debbie

August 9, 2011

Great post, thank you! We’re in the beginning stages of planning our Hawaiian vacation and doing a lot of research. One of our favorite Big Island resorts is Sheraton Sheraton Keauhou Bay – looks so nice and they have a lot of great deals!

Beth Thoma Robinson R(B)

August 9, 2011

@Debbie, there are also vacant lots for sale in the Keauhou area!

Beth Thoma Robinson R(B)

August 9, 2011

@Debbie, there are also vacant lots for sale in the Keauhou area!

Katie Minkus, R(BIC)

August 9, 2011

@Debbie – mahalo for leaving a comment! I love staying at the Sheraton – ask about the oceanfront rooms where you literally watch the surf spray up in front of your room! Awesome! There’s a lot of history – and a lot of good story telling about the property, too. Enjoy your trip!!

Katie Minkus, R(BIC)

August 9, 2011

@Debbie – mahalo for leaving a comment! I love staying at the Sheraton – ask about the oceanfront rooms where you literally watch the surf spray up in front of your room! Awesome! There’s a lot of history – and a lot of good story telling about the property, too. Enjoy your trip!!

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