Best Buy – More Hali'i Kai Condo Short Sales on the Big Island

With the inventory of condos for sale at the Kohala Coast resorts dwindling—and multiple offers becoming more common—the short sale and developer close out prices at oceanfront Hali’i Kai seem, to me, to be the best buy at either Waikoloa Beach Resort or Mauna Lani Resort in the $400,000 to $1 million price point.

The under $500,000 market has been particularly “hot” the past six months with 44 sales and 31 units contingent (meaning either in escrow or short sales with offers awaiting lender approval). There are currently no REO (bank owned after foreclosure) properties for sale in this price point, although there are still a few I can think of in the pipeline as failed short sales.

Let me repeat: 75 entry-level condos at Waikoloa Beach Resort and Mauna Lani found buyers in the past six months, and there are a total of 39 active listings. That works out to a 3-month supply if the buying trend continues! And, given the number of inquiries my colleagues and I are receiving, there is still plenty of interest in properties under $500,000, especially condos with vacation rental potential. Hence the stories of multiple offers and bidding wars on desirable listings.

The private oceanfront poolside restaurant at Hali’i Kai is popular with owners and renters

Hali’i Kai is one of the most attractive real estate options at Waikoloa Beach Resort for several reasons:

• The oceanfront amenity area with pool, fitness room, and private restaurant
• Low density condo community with quality construction
• Proximity to golf, shopping, restaurants
• The Halii Kai developer still has about 20% of the condos for sale, and they have decided to price aggressively to compete with short sales and foreclosures!

Recently, a reader of a related blog post about Halii Kai asked why so many of these short sales have been falling out of escrow. This has happened on several of my own short sale listings. My listing partner, Pam Deery, and I find we are most successful at short sales when we price close to where we know the bank’s valuation or appraisal will be. Although we may be able to negotiate a bit lower than that fair market value because the bank has a cost to foreclose, despite our best advice, we find some buyers get fixated on their low ball number.

Halii Kai 9C (MLS# 227346) and 16E (MLS# 236590) are both offered right around the $500,000 mark. Both are current on HOA dues and in move-in condition. Both recently lost their buyers when the bank countered near list price. At this price, they are bargains compared with developer alternatives! At just above $400,000, Halii Kai 18H (MLS# 231165) is the lowest priced 3 bedroom and the lender is still willing to work with us on a short sale.

Other listing agents try to address this phenomenon by listing high. I believe the two ground floor 3 bed, 2 bath units in Building 12, offered as short sales, have no offers because the asking prices (just under $1 million) are $150K-$200K above the number a buyer could expect the lender to approve! When a larger 3 bed, 3 bath had its price reduced to $999,000 as a short sale, it was under contract within days.

These four Halii Kai short sales, which could be bought at half-off the original sales prices, look to me to be best buys in a real estate market where good value has suddenly turned scarce!