Big Island

Price Reductions on Kohala Coast Oceanfront Resort Homes

Hot on the heels of my post about large Hawi homes on acreage with price reductions, come two significant reductions on single family residences in two oceanfront resort communities

One of them you may have picked up if you subscribe to a service that sends you price reductions on real estate of interest. The other is a hidden price reduction, as the property was off the market for a couple of months before being re-listed at a lower price. Either way, these two listings are each $500,000 cheaper than previously offered.

Deal or no deal?

Oceanfront resort homes for sale Kohala Coast

Half-million price reductions: Kolea home (MLS# 257650) and 49 Black Sand Beach home (MLS# 266575)

Lower Price on 49 Black Sand Beach Residence

There are currently five homes for sale at the Mauna Lani oceanfront community 49 Black Sand Beach, at prices ranging from just under $3 million for a 3,000 sq.ft. home with no ocean view (MLS# 226747), to $5.6 million for a 4,377 sq.ft. home designed by Lucky Bennett (MLS# 264963).

The most expensive listing happens to be on the lot next to the 4,827 sq.ft. residence that just came back on the market at $4,490,000 (MLS# 266575) – that’s $490,000 below its previous asking price.

None of the current ocean view listings at 49 Black Sand Beach are actually directly on the oceanfront. As the photo below (of the home that just had the price reduction) illustrates, their view of the ocean is across the golf course.

View of 49 Black Sand Beach from golf course

View of 49 Black Sand Beach home looking from Mauna Lani South golf course

So is this Price-Reduced Listing a Deal or No Deal?

On a $/sq.ft. basis, this home is the second best value, with (MLS# 266565) listed for $4,250,000 for 5,621 sq.ft. coming in lower. Both of these homes have 5 bedrooms, and both share a design feature that rules them out for a segment of buyers – namely, that they are two-story homes with the master suite on the second story for maximum ocean view and privacy.

Recent sales bracket the asking prices of the current crop of listings, with three of the four sales recorded in 2012 being direct oceanfront row, and the only 2013 sale to date being a short sale on a home with challenges (and a good value for the buyer at only $1,762,500 for 49 Black Sand Beach)!

My personal conclusion is that none of the current listings stands out as a great deal relative to the others, so buyer tastes and seller level of motivation will determine which is the next sale at 49 Black Sand Beach.

Lower Price on Oceanfront Kolea House (Waikoloa Beach Resort)

Kolea single family home lot 5

Living room photo illustrates quality Maryl construction and materials on Kolea Lot 5 home

The home for sale on Lot 5 at the oceanfront Kolea community in Waikoloa Beach Resort is only three bedrooms and 3,677 sq ft…and is now listed for $5,500,000 (MLS# 257650). This house is the only active listing of a single family home at Kolea.

Only one Kolea home sold in the past two years: a short sale with no ocean view that closed for only $2,800,000 in June. Distress sales have dominated the residential sales at Kolea with three of them in 2011 at under $3 million.

The listing itself mentions an assumable mortgage of $4.5 million…meaning that there is not a lot of play in the current price before sellers would need to bring cash to close. So no chance of getting this home at something like the short sale or foreclosure pricing of recent comps. That also means for a buyer who needs or wants to finance, the assumable mortgage is an opportunity as an appraisal is likely to come up short.

Comparing Value of Kolea versus 49 Black Sand Beach

What distinguishes Kolea from 49 Black Sand Beach, since both are Kohala Coast beachfront communities?

Beachfront pool amenities at Kolea and 49 Black Sand Beach

Kolea (left) and 49 Black Sand Beach (right) both have beachfront pools and amenities

Although the public has access to all beaches in Hawai’i, 49 Black Sand Beach residents have a private club built right on their little patch of sand. Kolea has a private path to the public beach at Anaehoomalu Bay, and more modest shared amenities.

More significantly from the standpoint of what appraisers call the principle of regression, aside from the 17 lots at Kolea, the rest of the neighborhood consists of 16 condominium buildings. Beautifully constructed condos, but condos nonetheless. 

The appraisal principle would suggest that if you took the exact same luxury resort home and placed it at Kolea or at 49 Black Sand Beach, it would be valued higher at 49 Black Sand Beach, where all the properties are single family residences.

While some resort home buyers might prefer Kolea for any number of reasons, suddenly the 49 Black Sand Beach listing with the $500,000 price reduction looks like a deal!

A hui hou,

Beth Thoma Robinson R(B)
Direct: 808.443.4588

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