Apologies to regular readers of my North and South Kohala real estate blog posts for my month-long absence. I’ve just returned from our family’s bi-annual visit to my husband’s native Switzerland, where I was asked in four languages “How’s the real estate market in Hawai’i?” This morning we walked into downtown Hawi to watch the Kamehameha Day parade, and the question was, “How was your trip?” followed closely by, “And how’s the market?”
My sense was that it had been an active 5 months in Kohala real estate…here are the statistics to prove it. (All statistics in this post refer to the area from Puakea to Pololu including Hawi and Kapa’au, but exclude the communities of lower North Kohala).
Pa’u riders pass through Hawi in the annual Kamehameha Day Parade
Activity Increases in Residential Kohala Real Estate
After a slow 2011 dominated by distress sales, the first half of 2012 brought some good news to the Kohala real estate market. There have been 18 homes sold in Kohala year-to-date. This compares with only 12 during the similar period of 2011.
Even bigger news is the composition of the sales. Last year, 58% (7 out of 12) residences sold were distressed, meaning bank-owned properties or short sales requiring bank approval. Of this year’s 18 sales, only 5 homes or 28% were distressed.
While Act 48, the legislation that took effect last May, has some effect in that it makes it more difficult for banks to foreclose, that law has also made banks more willing to approve short sales. The lower end of the market could possibly see more foreclosures in the next few years, but in Kohala we don’t have a ton of already-foreclosed properties sitting vacant…the “shadow inventory” one continues to read about in the national press.
Of the 18 sales so far this year, seven of them were under $250,000 (mostly the plantation-era homes that line the main streets in Hawi and Kapaau. Another five were $280,000-$500,000, including some homes on larger lots. The six properties that sold for $600K-$900,000 year-to-date are homes on acreage.
The non-gated community of Maliu Ridge was hot in the second half of 2011 as well, with a handful of distress sales having pushed prices down under $1 million. Eight homes have sold in the subdivision since the beginning of 2011; that leaves only one home for sale in this desirable area above Hawi.
This ocean view home with guest quarters in Hawi’s Puakea Bay Ranch is listed for $2,000,000 (MLS# 253892)
No sales have cracked the $1 million mark so far in 2012, although two homes did in 2011. These sales for $1,250,000 and $1,735,000 were luxury homes on large acreages on the mauka (mountain) side of the highway with ocean, Maui, and sunset views.
Our market averages two sales per year at the upper range, so 2011 was “normal” in that respect. No homes were for sale in gated Puakea Bay Ranch during 2011 other than the $13,750,000 oceanfront estate, but three homes are currently listed at prices from $1,688,000 to $2,299,000, so we would expect at least one sale there in the second half of this year.
Kohala Land Sales Show Dramatic Increase
The demand for vacant lots and acreages near the Kohala communities of Hawi and Kapa’au has also picked up. Nine parcels of land sold in the first five months of 2012 and one smaller residential lot is in escrow…compared with a total of 10 sales for the full year of 2011! Both 15,000 sq. ft. residential plots and larger lots up to 20 acres are selling with most of the activity outside the gated communities. The Puakea Bay Ranch and Puuepa Ranch subdivisions each had one sale.
In addition to the nine land sales reported in the MLS, the public purchase of 27 acres at Kauhola Point also closed escrow recently. The ten 2011 sales reported include the 17 acres acquired by the State at Paao.
The important coastal lands that have been put into trust over the past few years may be one reason why an oceanfront parcel at Ranch at Puakea sold for $3,200,000 in May — almost $200,000 more than the seller paid in 2005 and well above the $2,675,000 price on the adjacent oceanfront lot sold in 2009. With less oceanfront land available for private purchase, the value of available oceanfront parcels stands to increase.
New listing: 50 oceanfront acres in North Kohala for $3.5 million (MLS# 254069)
Non-oceanfront land prices are also edging higher. A 20-acre parcel on Kynnersley Road in Kapa’au sold for $625,000 in May while the highest price paid for a non-oceanfront 20-acre lot in 2011 was $550,000.
Properties continue to be sold to a mix of local buyers, and buyers from the Mainland and Canada in search of a second or retirement home. While the likelihood is that prices will increase only gradually, the Kohala real estate market is currently well balanced between demand and supply, and thus appears to have stabilized after a few challenging years.
A hui hou,
Beth Thoma Robinson, R(B)