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To Buy or To Build: Side By Side Comparisons

My first episode on HGTVʻs Hawaii Life show featured a family who were trying to decide between buying an existing home or buying a vacant lot and building from scratch. At the end of the episode, they decided to make an offer on a Kohala Ranch lot; and the end of the day, they bought and remodeled a home around the corner from the first home they viewed on the episode.

Iʻve said several times in several blog posts that my general advice to clients moving from the Mainland is that if they can find a residence that checks most of their boxes, in one of the locations they like, they should buy that. But if they canʻt, and their time line is such that they can wait at least two years before moving in, buying land and building is an option.

Usually, a buyer doesnʻt have the opportunity to literally make a buy or build decision on an identical location. But a few options come to mind among current Kona-Kohala Coast real estate listings where a buyer could do just that.

Puako oceanfront home for sale

Puako oceanfront home listed for $5,100,000 (MLS# 294745); vacant lots prices currently $2.5 – 3.8 million

Ocean View: Kohala Ranch Heathers

As I said, my HGTV clients decided to offer on a lot in Kohala Ranch; it was actually purchased by another client who worked with an architect on plans for a stunning home. Then – you guessed it – they found an already built home that they loved and decided not to wait to move to Hawaii until their planned residence was built. They are already enjoying their Hawaii Life and that great ocean view lot is back on the market.

Kohala Ranch Heathers Lot for sale

Kohala Ranch Heathers lot has unobstructed ocean views and a head start on building plans

A buyer could work with the architect who did the plans for this lot to cut months off the design, HOA approval, and permitting process. The 3-acre lot is listed at $299,000 (MLS# 297084).

But what if you canʻt wait?

A home has been listed one lot over from this lot. Completed in 2014 after a two-year build, the residence has 3 bedrooms and 3 baths, a relatively modest (for the area) 2,524 sq ft, pool and spa. Listed at $1,185,000 (MLS# 295313) that works out at asking prices to around $350/sq ft, which is what you should expect to spend at a minimum to build a home in Kohala Ranch.

Olapa Kohala Ranch Heathers home for sale

If it works for you…buy this Kohala Ranch Heathers home. If not, buy the lot almost next door and build.

Oceanfront: Kolea at Waikoloa Beach Resort

With only 17 lots at beachfront Kolea in Waikoloa Beach Resort…and homes already built on twelve of them…it caught my eye when the two Kolea vacant lots on the market recently had their prices reduced to $1,600,000: (MLS# 256190) and (MLS# 256116). Thatʻs quite a reduction from the list price of $3,450,000 at which theyʻve languished for years, and puts them below most Naupaka Place and Puako oceanfront lot listings.

Kolea vacant lot oceanfront for sale

Lot 12 at Kolea (MLS# 256116)…youʻd want to build your house back from the shoreline trail for privacy.

There is only one single family home currently listed at Kolea, the house on lot 14, asking price $4,595,000 (MLS# 289556). The home is 5 bedrooms and 4,373 square feet, working out to about $684/sq ft. That sounds steep…except the most recent sold comp, the residence on Kolea lot 5, sold earlier this year for $4,820,000 and had only 3,677 sq ft, working out to $875/sq ft excluding a $1.6 million value for the land. (NOTE: both of these home prices include furnishings, so subtract out around $100/sq ft when you are comparing with building costs alone).

Kolea home for sale oceanfront

Kolea home for sale…your own pool plus walking access to the beach at A-bay (MLS# 289556)

Either way, subject to the numbers you get from your architect and contractor, in this case it might be cheaper to build than buy.

Ke Alohi Kai – Oceanfront Kailua Kona

Sometimes the reason to buy rather than build isnʻt in the numbers alone. Sometimes the residence just canʻt be replicated. Thatʻs the case with a home Iʻm in love with at Ke Alohi Kai, a small gated oceanfront community off Alii Drive in Kailua-Kona. Asking $3,950,000 (MLS# 294464), this pod-style home handcrafted primarily from ohia overlooks tidal pools. It would be difficult to obtain the materials, but even more difficult to permit a pod-style home with recent code changes.

Pod style oceanfront home Kona

Sunset view at oceanfront home in Ke Alohi Kai, Kona offered for $3,950,000 (MLS# 294464)

The lot next door to this spectacular residence is on the market for $995,000 (MLS# 294465). That gives us a price per sq ft of $1,068 for the home…although the 2,766 sq ft doesnʻt give credit for the spaces between the pods, which makes the home live larger.

Given the asking prices of oceanfront listings up the coast, perhaps the smart move is to buy both the house and the lot next door, protecting privacy and views.

Oceanfront lot for sale Kona

Aerial view of oceanfront lot (MLS# 294465) for sale between existing residences: the home on the right is for sale.

Have a buy versus build question for another Big Island coast community? Iʻd be happy to give you my insight.

A hui hou,

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

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