With uncertainty about inflation and stock market volatility, combined with news reports of easing in some real estate markets, buyers seem a bit more concerned about the potential for falling Hawaii real estate prices than they were at the start of 2022. While I still see intense demand supported by fundamental changes in the profile of buyers, especially for investor and second home clients with 1031 exchanges or simply asset reallocation or future retirement goals, I find myself counseling prospective buyers to look for relative value, and for scarcity value as their best protection on the downside.
Thatʻs why I am enthusiastic about the new oceanfront listing at Haliʻi Kai at Waikoloa Beach Resort.
Haliʻi Kai 14D – 2 bedroom Direct Oceanfront Condo For Sale Appears to be a Value in Todayʻs Market
It was a reunion of sorts when I showed up at the open house for Haliʻi Kai 14D – the listing agent and I were sales agents for the developer at the time that we showed these buildings wearing hard hats pre-construction. Without even looking it up, we know that the second floor 2 bed/2 bath condos on the ocean sold in 2006 for $1,910,600 — and of course that was unfurnished and the current listing is being sold turnkey, offered at $2,499,000 with a short term vacation rental license and future bookings. Ignoring the value of furnishings, that is just appreciation of 31% in 15 years.
Now letʻs look at recent sales for Kolea, the other resort community built by the same developer at the same period. A listing went into escrow there today, asking price $2,000,000. Kolea 16M, a third-floor two bedroom condo in the building closest to the road and farthest from the ocean, sold in 2007 for $1,195,000. If it closes anywhere near $2,000,000 — as is likely since a ground floor unit in the same building sold this year for $1,895,000 — thatʻs 67% appreciation — more than double what I just calculated for the Haliʻi Kai condo.
Buying for Location Value and Scarcity Value
As the saying goes, there is only so much oceanfront. And it is even more rare for the oceanfront properties in our Kohala Coast resorts to be condominiums rather than single-family homes which in a similar location would be a multiple of the price.
The Haliʻi Kai community has 24 buildings, of which only three are directly on the ocean. Each of the buildings has four floorplans, repeated twice. That means there are only six of the larger, corner two bedroom units like 14D. So you have both location value and scarcity value for this listing.
Of the three oceanfront buildings, Building 14 is in the middle — more private than the other two. Building 13 is right by activity at the Ocean Club, and Building 15 is actually next to the oceanfront amenity area serving Ke Kailani at Mauna Lani Resort!
I am not saying, by the way, that the Kolea condominiums are necessarily overpriced. Maybe the market has finally figured out that this is the only condominium community on the Kohala Coast with direct beach access. Similarly constructed condominiums at Mauna Lani Resort lack ocean view, let alone access; and at Mauna Kea Resort, the condo properties are actually mauka (mountain side) of the highway.
In summary, if this is the right time for you to buy for whatever reason, you can look at the value factors — but donʻt forget what matters most if you plan to use the property yourself is still going to be whether this is the right fit for you and your lifestyle.