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Best Buy – Price Reduction on Kuki'o-Ka'upulehu Home on the Big Island

This Kukio—Ka’upulehu home (MLS# 232960) looks like a best buy at $7,950,000, fully furnished

The caller had a question for me. Of a dozen $7 to $8 million residential listings at Kukio, two stood out. Whereas the typical home for sale in this price range seemed to be under 5,000 sq. ft. on less than 1/2 acre of land, two of those homes were over 6,000 sq. ft. on a little over an acre.

Were these homes a good investment opportunity, or was there something he was missing? After a little homework, including a preview of the properties, the answer is clear: the best buy at Kuki’o is at Ka’upulehu.

There are a few caveats including, as always, the best buy for a buyer for whom it is the right fit!

Let’s start with the pluses:

Design. The architecture and finishes of the home include everything one expects in an exclusive resort property in Hawai’i. Things like pocket doors along the length of the great room as well as corner pockets on both dining room and master bedroom opening up to the infinity edge pool, and the outdoor showers off of each bedroom suite. At the same time, the finishes are just traditional enough to stand up well as fashions change over time. The kitchen is particularly well appointed (I was ready to make a cappuccino in the built-in Miele machine).

Spacious guest house. Sometimes the separate guest house is so small relative to the main house that guests can feel like second class citizens. This guest house has two suites and a smaller office/additional bedroom, a media or “mini great room,” and even its own laundry room. Besides having fabulous mountain views, the grassy area between the guest and main almost gives the feeling of a real “back yard” with a fire pit and cascading fountains. Extended family would be quite comfortable in their own space.

Privacy. All the lots in Ka’upulehu are around one acre, giving it a less dense feeling than the main part of Kukio. Although there will be a handful of front row houses between you and the ocean, there is plenty of lava buffer to make sure each home has its privacy.

Bang for the buck. On a dollar/sq. ft. basis, and with appropriate furnishings included, this home is clearly priced to sell. The price reduction from the original $9,350,000 asking price apparently came after an unsuccessful offer, and therefore is probably a strong market signal of what this seller would take.

What will hold some buyers back:

Location. Ka’upulehu is a funny animal. The visionary investor will see a purchase here as getting in on the ground floor, knowing they will be laughing all the way to the bank when acres of lava become a first-class golf course, and more than just a handful of exquisite residences grace the development. In the meantime, some prospective buyers will feel isolated, as Ka’upulehu is actually separated from the rest of Kuki’o by the entire Hualalai Resort.

View. Although for now there is a big unobstructed view in between the two front-row estates currently built, there is a good possibility of a large estate impeding the middle of this home’s ocean view in years to come (see the cleared pad in the photo above).

The compensations:

Kona Village Resort connection. If the Kuki’o Beach Club seems too far, take your golf cart down the path to dine at the Kona Village next door.

Hualalai in the middle could be a plus. Buying property at these resorts does not include membership in the clubs, which must be purchased separately. However, the owners of the developer-built homes at Ka’upulehu will have unique options. This is a more complicated topic than I can cover without writing war and peace as a blog post, but I’d be happy to explain to qualified buyers.

Ka’upulehu Club is already built, although restaurant services will come with more residents

A hui hou!

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Adam

January 25, 2011

There have been several auctions at these resorts over the last 24 months. What are the square foot cost differences to what is offered. Did a new restaurant ever open at the four seasons golf club house? I am hesitant to buy here given auctions / downtrend in Hualalai (along with bank owned offers). I don’t care about laughing to the bank… just want stability and a halt to declining services (for the money). thx.

Adam

January 25, 2011

There have been several auctions at these resorts over the last 24 months. What are the square foot cost differences to what is offered. Did a new restaurant ever open at the four seasons golf club house? I am hesitant to buy here given auctions / downtrend in Hualalai (along with bank owned offers). I don’t care about laughing to the bank… just want stability and a halt to declining services (for the money). thx.

Beth Robinson R(B)

January 25, 2011

@Adam, thanks for your questions and perspective. It is interesting that auctions are of concern to you, because our impression is that the well-publicized auctions are actually doing a good job of bidding up prices on the properties they sell. The banks seem to be pretty savvy about pricing their listings…if they were underpricing you would not see them linger on market. For example, the home at Kukio about which my colleague Heidi just blogged has been on the market about 6 months.

By the way, if you look at listings on the Hawaii Life website, you will see at the bottom of the description a calculation of $/sq ft for that listing, and for the neighborhood/resort. For Hualalai, I think that’s about $1275/sq ft if memory serves.

One thing I always tell owners is the more quickly we can clear distress sales from the market, the more quickly that location will achieve pricing stability. Maybe it would be better in the long run if the banks were actually more aggressive, since of course the on-site sales agents will protect values as best they can (good for sellers, not so good if you are a buyer).

As for declining services, that reminds me of a story about the early days of Hualalai…but that I will save for another blog post…

Beth Robinson R(B)

January 25, 2011

@Adam, thanks for your questions and perspective. It is interesting that auctions are of concern to you, because our impression is that the well-publicized auctions are actually doing a good job of bidding up prices on the properties they sell. The banks seem to be pretty savvy about pricing their listings…if they were underpricing you would not see them linger on market. For example, the home at Kukio about which my colleague Heidi just blogged has been on the market about 6 months.

By the way, if you look at listings on the Hawaii Life website, you will see at the bottom of the description a calculation of $/sq ft for that listing, and for the neighborhood/resort. For Hualalai, I think that’s about $1275/sq ft if memory serves.

One thing I always tell owners is the more quickly we can clear distress sales from the market, the more quickly that location will achieve pricing stability. Maybe it would be better in the long run if the banks were actually more aggressive, since of course the on-site sales agents will protect values as best they can (good for sellers, not so good if you are a buyer).

As for declining services, that reminds me of a story about the early days of Hualalai…but that I will save for another blog post…

Pam Deery, R(B)

January 25, 2011

Beth; Thanks for the great information about these two most recent homes and their amenities. From my understanding, the Alii memberships being offered by the owner of these two fabulous properties surpass anything else available throughout the resort!

With the ocean front lots priced at $4.5 – $5.5, these two homes are without question priced to sell.

Adam; The long awaited re-opening of the club house restaurant is scheduled for February 1,2011.

Pam Deery, R(B)

January 25, 2011

Beth; Thanks for the great information about these two most recent homes and their amenities. From my understanding, the Alii memberships being offered by the owner of these two fabulous properties surpass anything else available throughout the resort!

With the ocean front lots priced at $4.5 – $5.5, these two homes are without question priced to sell.

Adam; The long awaited re-opening of the club house restaurant is scheduled for February 1,2011.

Beth Robinson R(B)

January 25, 2011

@Pam, thanks for chiming in, I’d totally missed answering the question about the restaurant. That’s why we make such a great team!

Beth Robinson R(B)

January 25, 2011

@Pam, thanks for chiming in, I’d totally missed answering the question about the restaurant. That’s why we make such a great team!

Heidi White

January 26, 2011

Yes Beth, Thanks for the comparison. The best buy might be a Ka’upulehu but not all of us like being over at that location. That’s the difference. If privacy is your thing…. maybe….but a lot of us like the beach and that means getting closer to the Beach club amenities & surf or even Kua bay. That’s the beauty of it all; there is something for everyone at Kuki’o.

Heidi White

January 26, 2011

Yes Beth, Thanks for the comparison. The best buy might be a Ka’upulehu but not all of us like being over at that location. That’s the difference. If privacy is your thing…. maybe….but a lot of us like the beach and that means getting closer to the Beach club amenities & surf or even Kua bay. That’s the beauty of it all; there is something for everyone at Kuki’o.

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