As regular readers of my North Kohala real estate market updates recall, in analyzing the Kohala real estate market, I separate out the communities near Kawaihae from “Kohala.” I consider the subdivisions just around the corner from Hawi at Puakea as still in the “Kohala” market, and the lower North Kohala communities as fitting in the Kohala Coast market.
This blog post covers 2015 vacant land sales from Puakea east through Hawi and Kapaau, to Niuli’i near Pololu.
Speaking of Pololu Valley, many ocean view acreage lots in Kohala have beautiful mountain views as well, like this parcel (MLS# 272836 $495,000)
Bottom Line: Fewer Sales, Higher Price Points in 2015
As I predicted in my 2014 review of land sales, with less inventory at lower price points, 2015 brought fewer sales of vacant land and a modest upward trend in price on some comparable parcels. There were a total of 22 parcels sold, ranging from $130,000 for a little residential lot on Holy Bakery Road, to two 20+ acre parcels at Ranch at Puakea that were listed for $1.2 million each, and sold for $850,000 and $902,500.
This Ranch at Puakea 20-acre lot is priced well relative to 2015 comps at $769,000 (MLS# 280584)
Just as in the residential real estate market, the least expensive listings went quickly and sold for asking price. More expensive land listings can take nearly a year to sell…and many of these have been listed repeatedly for several years, so the apparent days on market does not always tell the story.
As much of Kohala is zoned Ag-20a, meaning agricultural, minimum 20 acres, in some ways a 20-acre lot serves as a benchmark for me to look at pricing. Although averages can be misleading, the median price for 20 acres in 2015 was $630,000, versus $520,000 in 2014. Part of this was a different mix, but for similar parcels, the market seems to be up perhaps 5-10% depending on location.
Another important factor in the market for raw land in Kohala is the willingness of sellers to finance. Of the 22 sales, six of them were seller-financed and only four buyers got land or construction loans. More than half of buyers paid cash. Land loans generally require 30-35% down and the term is only three years. However, if an agricultural property qualifies, Farm Credit Services of Hawaii is an excellent choice for financing land in Kohala.
Outlook for 2016: Will Land Sales Slow Again?
Looking at the 40 active listings of vacant land in Kohala, the range in asking price is $330,000 for a 10-acre parcel at Puakea Bay Ranch that just opened escrow, to $18.5 million for 498 acres including 11 parcels and a big stretch of oceanfront.
Ocean view 20-acre lots at Hawi Nani are being offered for $649,000 (MLS# 288990)
With a median price point of $782,000, the listings are even more skewed towards higher prices and gated communities. While gated communities with strict CC&Rs, paved roads, and all utilities underground have their fans, sold statistics show a large segment of the Hawi-Kapaau buyers are looking for a property where they can do farming or ranching, or just build their home without a design review process.
These buyers favor smaller subdivisions like Hawi Nani right in Hawi with 20-acre lots priced around $649,000, or the six-lot subdivision in Kapana’ia with the three remaining lots priced at $495,000 for 6.5 – 9 acres with a pedestrian easement to walk to the oceanfront.
Lots for sale just above Kapanaia Bay are suitable for horses or farming. Asking $495,000 (MLS# 272834)
The Hawi Nani subdivision has access to HELCO for electricity, but has a well for subdivision water. The Kapana’ia lots have County water, but are off-grid for electricity.
If you have a particular idea in mind, I’m happy to consult on which parcels would best suit your goals.
A hui hou,
Beth Thoma Robinson, R(B)