Honua Kai Resort & Spa Market Update – Resort Builds Considerable Momentum for the Future

As Hawaii braced for Tropical Storm Flossie to hit shores on July 30th, I got started on my August 2013 Honua Kai real estate market update. I live in Ka’anapali about a mile away from Honua Kai and we definitely experienced some higher wind conditions (I read they topped 50 mph at the peak), very eerie and interesting yellow and brown hues in the sky, and the blessing of rainfall.

In case you didn’t catch my last update, please sure to view my Mid Year Market Update at Honua Kai published last month. Since my last update, there have been a total of 8 sales at the resort ranging in price from $599k-$2,102,450. There are currently 2 resale properties under contract and I would venture to say about 15 developer units under contract.

I just recently represented Peter and Tracy Konidis of Ontario, Canada on their purchase of Hokulani #248 (above photo), a two bedroom/two bath partial ocean view unit for $975,000

What Has Sold at Honua Kai Recently?

As I mentioned earlier, there have been 8 sales in Honua Kai in roughly the last 5 weeks when I did my last market update. Year to date, there have been 49 sales at Honua Kai – 16 of the 49, or 33%, of the units have been resales compared to developer sales.

• Hokulani #337 – a studio/one bath 595 sq.ft. bath partial ocean view closing on 7.2.13 for $599,900.
• Konea #210 – a one bed/one bath 730 sq.ft. mountain view unit with the slightest glimpse of the ocean sold for $665,000 on 7.24.13 to an all cash buyer. This resale property spent about 3 weeks on the market before going under contract and sold for 98.5% of the original asking price. This closing clearly shows upward momentum on pricing trends at Honua Kai as the unit 4 floors up at 610 closed for $647,500 on 5.28.13. Konea #610 had more of an ocean view because of its elevation, which allowed those to look over Duke’s towards the ocean and Lanai.
• Konea #315 – a partial ocean view (interior courtyard so the partial ocean view was pretty good) studio/one bath 595 sq.ft. unit closed on 6.24.13 for $669,000. This was a developer unit and will be one of the last developer studio unit closings. Konea #215 just went under contract a few days ago.
• Hokulani #248 – (photo above) a two bed/two bath 1,100 sq.ft. partial ocean view closing for $975,000 on 7.23.13. I represented Canadian buyers from Ontario on this developer sale purchase.
• Hokulani #211 – (photo below) a two bed/two bath 1,100 sq.ft. partial ocean view (interior courtyard) closing for $1,285,000 on 6.24.13. I represented the buyers from California on this developer sale.
• Konea #504 – a two bed/two bath 1,250 sq.ft. partial ocean view developer sale sold for $1,119,900 on 7.16.13. There are only a couple of remaining two bedroom developer units offering partial ocean views in the low $1m range.
• Hokulani #605 – a two bed/two bath 1,100 sq.ft. true ocean view developer sale closing for $1,475,000 on 7.3.13.
• Hokulani #729 – a three bed/three bath 1,600 sq.ft. ocean view sale closing for $2,102,450 on 7.22.13.

2013 Honua Kai Resale Activity (YTD)

I included the % sold price vs original and the last listed price before the property went under contract because I think it is very interesting to see how this correlates with overall days on market.

The above spreadsheet is the compilation of 16 resale units that have taken place thus far in 2013. Click the following link and then once again on the next page for the full spreadsheet to open a new tab Honua Kai Sold Resale Spreadsheet

The real outlier here was the sale of Hokulani #218, originally priced at $1,225,000 and spending literally over 2.5 years on the market before it sold for $930,000; clearly the numbers would have been much closer were it not for this one outlier.

The DOM is Days on Market; our MLS includes the escrow period as part of the overall days on market. For financed transactions it is a safe bet that there was about 45-60 days spent under contract that contributed to the overall DOM figure.

Lastly, I wanted to point out that the cash sales in the resale market (YTD) have been more prominent at 62.5% of total sales as opposed to the developer inventory at 45% of the sales.

Honua Kai Historical Sales

With one closing taking place in 2008, the majority of the sales at the resort took place during 2009 and 2010. I thought I would include the following statistics that I compiled to illustrate the emerging prominence of the resale market at Honua Kai with the 2013 YTD stats markedly higher than any other period.

I would expect this trend to continue with a very limited supply of developer inventory being available. As of today, there has not been one single short sale or bank owned sale at Honua Kai – this is not to say that a few owners have not lost money when selling, but there has never been a sale disclosing the aforementioned status.

What’s Under Contract

About 15 developer units are under contract right now; this number is dwindling as the inventory at Honua Kai is shrinking and the remaining units are at higher price points, which historically sell at a slower pace. One resale property under contract:

• Konea #224 – a one bed/one bath unit of 750 sq.ft. with a mountain view currently listed at $649,000. The seller of this property paid $553,800 for this property in late 2010, so I am thinking that they will likely be making a profit on this sale. This property went under contract after about 5 months on the market.

In & Out of Contract

• Konea #544 – the largest one bedroom floor plan at 780 sq.ft. with a pretty nice ocean view on the northern side of the Konea (North) tower has been in and out of contract a couple times now. I featured this unit with a full length video in a previous post New Ocean View One Bedroom Resale Unit Just Listed.

Konea #818 is a new two bedroom resale listing offered at $1.295M. This unit sits on the southern end of the Konea (North Tower). It has tremendous mountain views, morning sun light as it faces east, and a partial ocean view, as you can see here.

What’s New on the Market?

• Hokulani #244 – a one bed/one bath partial ocean view listed for $710,000. This is currently the lowest priced one bedroom unit in all of Honua Kai. There have been offers on this property, but it is still available for sale. I have a video on file for the location of this unit, if you would like to see, please reach out to me directly. This property is definitely one of the strongest values in all of Honua Kai and I would not be surprised if it goes under contract any day.
• Hokulani #242 – a one bed plus den/one bath unit of 950 sq.ft. with a partial ocean view offered for $825,000. This is the only resale unit of this type and the developer only has a few more too. This is a great alternative for those who want a larger one bedroom unit that can comfortably sleep 6, but don’t want to pay the price for.
• Konea #818 – a two bed/two bath partial ocean view unit listed for $1,295,000. Buyers will find value in that this is the lowest two bedroom unit in all of the Konea (North Tower), and because of its elevation, it does have a view of the ocean and the island of Lanai.

I represented Keith and Lynette Carey on their recent purchase of Hokulani #211 an inner courtyard partial ocean view unit (photo above) for $1,285,000. There are only a select number of these developer partial ocean view units available starting in the low $1M range.

What’s Actively For Sale at Honua Kai?

There are close to 80 unsold developer units still available for sale with the majority of the units being two and three bedroom properties starting in the low $1M range up to just under $4M for oceanfront 3 bedroom units. Please reach out to me directly for all developer inventory actively and not actively on the market at this time.

Here is the complete list of all active resale inventory as well as a couple developer units, which provide a good representation of their remaining stock: Honua Kai Real Estate Gallery.

Pricing Trends and Predictions

• It is my personal prediction that we are going to see an increased number of the inner courtyard 3 bedroom ocean view developer units go under contract as they represent some of the strongest values amongst the remaining developer inventory. I just recently helped a client secure a unit like this in the low $2M range.
• I do think if the developer wants to see the same rate of liquidity on their remaining inventory that they are going to need to reduce prices most notably on 2 bedroom ocean view units in the Konea tower. I wouldn’t be surprised if they decide to do this, but buyers should be aware that even if they decide to do this it is very unlikely to be at the same level that they cut prices in 2011 and in early 2013.
• Units at the entry level of the price spectrum ($600k-$800k) at Honua Kai will continue to appreciate at the quickest rates from rock bottom prices in 2011 and 2012.
• I think that the overall level of transactions at Honua Kai is going to taper off just because of the lack of inventory, but we are going to continue to see an emergent resale market. Lending rates are still exceptionally good, rental returns at Honua Kai are getting progressively better, and there are a number of owners who now have equity in their properties and are able to sell them for a profit.

There are buyers who have felt that that they have missed the boat with the earlier price reductions and in terms of purchasing at rock bottom prices, I think this is accurate. However, I think there is much less uncertainty at Honua Kai now than there previously was due to:

• the Maui market, as a whole, is much better
• the rental returns are much better
• the resort’s title including “Spa” will actually come to fruition sometime later this month as it opens its doors
• the resort is just glowing with positive reviews and has built considerable momentum for the future

Aloha from Ka’anapali, Maui,

My Blog Series on Honua Kai Condos

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1. Honua Kai Resort in Kaanapali, Maui – Start here, as this blog will provide you with a good overview of the resort including video on its location, and its world class amenities and ownership offerings.
2. Honua Kai Resort Real Estate For Sale – Kaanapali, Maui Condos For Sale – This post focuses on the inventory actively for sale and where all the units are located.
3. Honua Kai Resort Mid Year 2013 Market Update – We are beginning to see a clear trend that the resale market has become far more prominent than it has in the past.
4. Canadian Financing at Honua Kai available with 30% Down Payment – 18% of the owners at Honua Kai, how are they securing these properties?
5. Honua Kai Rental Income Figures – With some of the strongest returns of any ownership opportunity in Hawaii, Honua Kai deserves your strong consideration for short term cash returns on investment.
6. New Ocean View One Bedroom Resale Unit Just Listed – check out this post on my one bedroom best buy in all of Honua Kai.
7. Honua Kai May 2013 Market Update Report – Read about the new developer price reductions and all the recent market activity down at the resort.
8. 50 New Price Reductions on Two and Three Bedroom Units at Honua Kai – New developer price reductions announced on April 18, 2103.
9. Honua Kai March 2013 Market Update Report – There has been a significant increase in the level of sales for two bedroom units at the resort. Read all about it here.
10. One Bedroom/One Bath Mountain View Unit at Honua Kai Sold for $525,000 – Congratulations to the Kojima Ohana on their recent resale purchase at Honua Kai.
11. 5 Remaining One Bedroom Plus Den Units for Sale at Honua Kai – They are sold out of developer one bedroom units but check out this video blog for this niche units starting in the high $700k range.
12. Honua Kai 2 Bedroom/2 Bath Condo Sold a Seller’s Perspective – What our seller client had to say about our team selling their property for a $135,000 short term gain.
13. 2 Bedroom Ocean View Best Buys at the Honua Kai Resort and Spa – Feb ’13 post on the best ocean view and partial ocean view two bedroom units.
14. 4 New One Bedroom Listings at Honua Kai – Posted on January 2013 be sure to check out these best buys priced under $550K
15. Honua Kai January 2013 Market Update – What’s happening in the new year at Honua Kai? Are prices increasing?
16. Honua Kai HOA Fees Increasing By 10% Effective Feb. 1, 2013 – What are the current fees, what do they cover, and what other costs of ownership are involved?
17. 25% Down Payment Financing Options at Honua Kai – Get the inside track on leveraging your cash investments at Honua Kai.
18. Canadian Couple From Vancouver B.C. Purchases a 3 Bedroom Honua Kai Unit for $1,900,000 – Did you know that many of the owners at Honua Kai are from Canada?
19. Honua Kai November 2012 Market Update – The latest news after a crazy year of selling
20. Honua Kai January 2012 Update – Why Honua Kai is the hottest deal in town right now
21. Honua Kai Purchase Process – An owner’s perspective of purchasing and experiencing the resort.
22. 35% Price Reductions on Condos For Sale at Honua Kai Resort – Read about how the developer dramatically slashed the prices at Honua Kai and where some of the best deals are at.
23. Price Reductions on Honua Kai Resort One Bedroom Units – Video blog on 1-bedroom units that are Screaming Deals.
24. Honua Kai Resort in Kaanapali – Best Two Bedroom Deals – Video blog on 2-bedroom units that are Screaming Deals.