Plenty of ocean view property on the Big Island
According to the Wall Street Journal, finished (build-able) lot prices in some regions of the country are up significantly from early-2009 lows. Unlike lots in places like Las Vegas and Southern California, the market for$1 million vacation homes in Hawaii still has a way to go, says the Wall Street Journal, quoting Big Island real estate agent Beth Thoma Robinson for support.
Any real estate agent should be ecstatic about being quoted in the Wall Street Journal, right? I am. Except that the market view I expressed was actually something of a non-sequitur to the discussion of why the value of a large (660 lot) Hokuli’a development project south of Kailua Kona should have fallen so low. Which gives me an opportunity to discuss luxury real estate market dynamics on the desirable west side of the Big Island, let’s say from Hokulia (North Kona which includes Hualalai Resort and Kukio) up through the districts of South Kohala (Waikoloa Beach Resort, Mauna Lani Resort and Mauna Kea Resort) and the subdivisions in North Kohala which in some ways would be the most comparable with Hokulia in terms of their outstanding ocean views and residential character.
What I actually told the reporter was that our resort and luxury home market, including land and acreage in gated communities, simply ground to a halt along with the bumps in the economy in late 2008. Buyers shut their pocketbooks for the reasons quoted in the WSJ article. During the winter selling season early in 2009, buyers were everywhere but based upon what they were seeing in their home markets, prices here had some distance to fall.
Many sellers disagreed, and fewer deals were being done. That began to change by the fall of 2009, when renewed buyer confidence encountered more realistic seller expectations (and distress sales such as short sales and REOs). As I explained to the reporter, many luxury communities are having record sales volume this year. And that is exactly why the value of a large project would be diminished:
- There are great deals on the market in residential property. Resort quality, ocean view homes are on the market well below replacement cost.
- The buyer whose future retirement has been pushed out a few years might want to buy a lot to hold until nearer that timebut there is plenty of inventory of raw land, including stunning resort and oceanfront lots, in developments that are further along than Hokulia and less subject to vog and environmental and infrastructure challenges.
- The multi-million dollar buyer I work with typically does not come to the Big Island envisioning life in a community of 660 lots. They either want the ease of a resort lifestyle with all the amenities right at hand, or a more rural lifestyle in an area with its old Hawaii character intact. Neither of those describe Hokuli’a.
It also is why our Big Island team is having a fabulous year!
A hui hou,
Beth Thoma Robinson, R(S)