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Kohala Coast Resorts – Middle Range Stable to Appreciating

To continue the review of the 2012 Kohala Coast condo real estate market that I began in my post about the lower (under $500,000) end, let’s look at the mid-range: around Mauna Lani average sales price (median year-to-date being $715,000) and where the Mauna Kea resort condo market begins (all of the condos in the Uplands are listed in the $500,000 – $1 million range.)

Although the inventory is not drying up altogether as is the case with the under $500,000 market segment, the inventory of short sales and REOs (bank-owned properties after foreclosure) has all but disappeared.

The number of distress sales in the past couple of years was a significant proportion of the total sales, and therefore, appraisers could not throw out those sales; now they are almost non-existent. Hence my conclusion that the middle range of the market is now stable to appreciating in price.

Going, going…view from Wai’ula’ula at Mauna Kea short sale. Asking price $795,000 (MLS# 247266)

Mauna Lani Resort Condo Buyers Favor Newer Communities

Although one can buy a spacious Islands at Mauna Lani, or a one-bedroom condo at Mauna Lani Point or Terrace for under $1 million, most of the real estate purchases in this price point are at the newer communities. Newer condos purchased at the height of the market were the bulk of the distress sales, but that aside, we find few buyers consider both.

Some buyers do not like the older styling, or wish not to deal with interior renovations to put in travertine floors and granite counter tops; they prefer a garage to a carport, or just have to have a built-in BBQ on the lanai. Those buyers are focused on the newer condo projects.

Villages at Mauna Lani 516 has privacy, proximity to pool, and is priced to sell at $769,000 (MLS# 247869)

The level of demand for mid-range Mauna Lani resort property seems to be pretty consistent year-on-year: 16 sales last year recorded through May and 17 sold or pending so far in 2012. In both years, half those sales were at two high-end newer projects: Villages at Mauna Lani and Ka Milo. 

Both of these newer communities also have models that sell in the over-$1 million price point, so buyers are responding to what appraisers call the “principle of progression”…meaning that they are getting a deal in a neighborhood with higher priced homes, rather than paying the highest price within a community of lower priced homes.

The Villages at Mauna Lani has 5 sales under $1 million completed or pending. With the remaining two distressed properties now taken, a Villages buyer has a choice of three units in the price point, all the Lehua floor plan. These sold consistently at a $750,000 last year (furnished, non-distressed), so current asking prices of $769,000 – $800,000 still look like a solid buy for now.

The other hot project among the Mauna Lani real estate options is Ka Milo, where three are in escrow currently – exactly as many as sold in the first part of 2011. The key news is: one of those three sales is the same unit in 2011 and 2012! Yup, a developer sale from last year at $699,000 came back on the market this year and had an accepted offer within 15 days at a $795,000 asking price.

Ka Milo’s newer phase of construction in this price point has two drawbacks compared with earlier built units: less desirable locations and “value engineering” to hold down construction costs to deliver within today’s market pricing. Hence the desirability of the first phase Ka Milo condos.

Under $1 Million Means Smaller at Mauna Lani Terrace and Point

The first round of construction at Mauna Lani is closer to the Beach Club and hotel amenities and these properties command a premium for ocean view. The buyer whose priorities are walking to the beach, or seeing the sun drop into the ocean will lean towards the established communities: Mauna Lani Terrace, Point, and Islands.

Although older projects did not have the distress sales because many owners bought well before the recent price boom they can still sell at today’s market price. The lucky buyers who purchased, for example, a 1-bedroom Mauna Lani Terrace in 2011 or 2012 for around $600,000 got their condo for half what a buyer who purchased in 2007 paid.  

Even with the requisite $200K-$250,000 to completely refurbish and refurnish, there should be upside when the location premium expands in a sellers market. My pick under $1 million is Terrace K102…which hit the market at $925,000 at the start of the year, but is already down to $795,000 asking price….below what the 2010 buyer paid for this floor plan.

Lowest priced condo at the Terrace is a 1-bedroom for $795,000 (MLS# 250136) with view across the fish ponds towards the ocean

If you like the older style, but need more than one bedroom, check out the Islands at Mauna Lani instead.

Mauna Kea or Waikoloa Beach Resort – Fewer Listings in Middle Range

Between the two condo properties for sale at Mauna Kea in the under $1 million range, my pick for value is Wai’ula’ula. Again, I am applying the principle of progression. Aside from having a nicer amenity area than Kumulani for those who don’t care to drive to the hotels to swim or workout, the fact that there are duplex and single family homes at higher price points would indicate a higher upside for Wai’ula’ula as the market tightens. With three sales recorded so far this year…two at $800,000 level and the premium unit at $950,000, buyers have good choices with two out of the three current listings.

Fully furnished, asking price $869,000…plenty of ocean view and little traffic below (MLS# 245994)

Wai’ula’ula L202 has a nice private location well oriented for ocean views and is a short sale, which the bank should have no problem approving at somewhere near the $795,000 asking price. For a furnished ready to rent option, I still like E201 at $869,000 asking price.

Kolea at Waikoloa Beach Resort is often considered by the same clients who look at Wai’ula’ula at Mauna Kea. The quality of construction and finishes are comparable, and both communities mix freestanding homes and condos. There the similarity ends.

From a lifestyle consideration, Kolea has a private path directly to the beach at A-Bay; Wai’ula’ula requires getting in a vehicle to reach the beach at the Mauna Kea or Hapuna Prince hotels. On the other hand, Mauna Kea is considered a more exclusive resort than Waikoloa.

All Kolea villas have the big pocket doors to lanai; lowest priced listing is $1,050,000 short sale (MLS# 253768)

Unfortunately, at the moment there is not a single active Kolea listing under $1 million to compare with what’s available at Wai’ula’ula. The closest would be a new short sale listing which is a ground floor 3-bedroom of similar square footage. Asking price is $1,050,000, but based upon the most recent comparable sale of $940,000 for a fully furnished villa one building over, I’d say the right offer should fall in the target range of this blog post.

A hui hou,

Beth Thoma Robinson, R(B)
Direct: 808.443.4588
Email: Beth@HawaiiLife.com

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