|1Q Hawaii resort home sales up 20% compared to 2009
Pacific Business News (Honolulu) - by Janis L. Magin Pacific Business News
Hawaii’s resort real estate market appears to be gaining ground this year, and the number of sales in 2010 could outpace the last two years, according to a new report.
A slowdown in resort home sales that started in 2006 appears to have bottomed out last year, according to the report by Ricky Cassiday of Data@Work.
Sales were up by nearly 20 percent for the first quarter of the year, a pace that could mean total sales may reach 1,288 homes by the end of the year, the report forecasted.
That would surpass the 1,058 sales of resort homes reported by the state in 2009, and the 1,082 sales closed in 2008, the report said. However, it would still fall well short of the 1,722 sales recorded in 2007 and the 2,048 sales in 2006.
Resales have been strong at certain resorts, especially the Big Island’s Hualalai Resort, which is home to two golf courses and a Four Seasons resort as well as luxury homes whose prices start at $2 million.
“We started last August,” said Rob Kildow, broker in charge at Hualalai Realty. “We had the largest single month in the 14-year history of Hualalai.”
First-quarter closings at that resort alone have totaled just under $48 million so far this year, more than six times the $7.5 million in sales closed during the first quarter of 2009, he said.
The report analyzed the number of closed sales and prices in resort-zoned areas on Oahu, the Big Island, Maui, Lanai and Kauai using Multiple Listings Services and state data. While the report includes data on such Oahu areas as Turtle Bay and Ko Olina, and such Maui areas as Wailea and Kaanapali, it does not count sales in Waikiki or Kihei and Napili on Maui, Cassiday said.
The report noted that part of the increase in sales could be attributed to falling prices, which have helped to stoke demand.
Sales have been higher at the lower end of the price range — less than $1 million — and at the high end of the spectrum, or more than $4 million, the report noted.
The middle market “used to be the strongest stuff,” Cassiday said. “When the market was going up everybody was moving up and they would flood into the middle ranges. Then that crashed.”
There were 322 sales during the first quarter with an average sales price of $1.2 million, the report said.
The majority of sales during the first quarter were resales, which can give a better snapshot of the market, since developer sales tend to have a one- to two-year lag between reservation and closings. The resale market actually has had four quarters of rising activity, the report said.
There will be fewer and fewer developer sales as major projects are completed and sold, Cassiday said. Honua Kai on Maui is currently actively closing sales, and closed 45 sales in March alone.
“So the resale market will be a bigger and bigger component of these things,” he said.
The larger Big Island resorts such as Hualalai and Mauna Lani are mostly resales these days, especially at the higher end.
At Mauna Lani Resort, anything more than $5 million and oceanfront is seeing increased activity this year, said Yvonne Khouri-Morgan, broker in charge at Mauna Lani Realty.
Prices also have come down there, she said. Last year “was pretty much a lost year for most of us, because the prices weren’t coming down and the buyers were holding off, waiting.”
This year there are more people looking and more offers are being presented to sellers, she said.
“What I’m seeing is West Coast-American cash buyers,” she said. “Buyers who have been looking for many years (are)seeing this is an opportunity.”
Kildow said Hualalai sees a lot of people taking advantage of the low mortgage rates to finance their purchases so they can keep their cash in other investments.
However, cash is king there, too.
Three recent sales at Hualalai, for $13 million, $9 million and $8 million were all-cash deals, Kildow said.