Best Buy – New Listing at Ranch at Puakea on the Big Island

Readers of this blog will know that the small (13 lot) gated oceanfront community near Hawi, known as Ranch at Puakea, is a favorite of the Hawaii Life Big Island team. Up until now, all the non-oceanfront Puakea Bay Ranch lots have been priced over $1 million, and the oceanfront nearer to $3 million. This week, the owner of Lot 10 decided to put his 20-acre lot on the market for only $879,000, which for this particular community is a best buy, bordering on the proverbial “screaming deal”.

Ranch at Puakea Lot 10 (MLS# 239758) is a best buy for an almost-oceanfront 20 acres at $897,000

It would be easy for the cynical prospective buyer to wonder whether this is really a “buy” or whether the other lots listed at $1.1-1.2 million (both within Ranch at Puakea, and one lot for sale at a similar distance from the ocean at Puakea Bay Ranch next door) are just overpriced.

To see the value it helps to understand how the development at Ranch at Puakea compares with other options both inside and outside of gated communities in North Kohala, and to be familiar with what else has sold this year in the raw land/equestrian property category.

First, let’s look at the value in terms of desirability: partly the location itself, partly the care designed into Ranch at Puakea by the developer (actually, a group of partners who live and develop in Aspen, Colorado, and therefore have a sense of what high-end buyers want).

• Access to the ocean—Most of the oceanfront in oceanfront North Kohala consists of dramatic cliffs. Ranch at Puakea owners share a sweet cove where it is actually possible to get into the water.
• Multiple sources of Ag and potable water—Many of the large-acreage gated communities, such as Kohala Ranch or Puakea Bay Ranch, are not really suited to agricultural use and few owners even keep horses despite the equestrian trails rimming the communities. That is because individual lot owners don’t really have access to sufficient water. Kohala Ranch is on a private water system charging higher rates; Puakea Bay Ranch has county water…but each lot’s allotment would be easily consumed by household use, and the typical pool water features and landscaping right around the house. In contrast, Ranch at Puakea has both county water, and its own well system, with lines and meters already brought underground to each lot (along with the other utilities: electric, phone, and cable). Although, right now the pastures are a beautiful green thanks to recent rains, through most of the summer months that was not the case.
• Aesthetics, privacy, and sight lines guided lot design—In the photo above, you can see clearly that while the lot lines on three sides lay out a pretty regular rectangle, the road side is a gentle curve. From the moment you enter Ranch at Puakea, you notice that the road leading to all the lots is not a straight line (as at Puakea Bay Ranch or Puuepa Ranch), but meanders down the hillside. Keawe post fences and sculpture in the road speak to an upscale ranch aesthetic. The 10 ocean view lots were laid out around natural contours of the land…two lot owners have recently broken ground on their residences, but the only visible evidence from the road would be the gracious driveway taking shape.
• Modest CC&R’s—My analysis is that large lots have been selling outside of gated communities rather than within them this year primarily because buyers don’t want to be constrained by minimum building requirements, or architectural review. The developer at Ranch at Puakea believes that those attracted to the community will, like them, be touched by the sense of place and want to build with sensitivity, quite possibly not a large home, but of exquisite design and construction. The choice of contractors for the properties currently under construction would confirm that. One of them is the builder of this home (MLS# 235911) for sale for $2.2 million at Puakea Ranch directly mauka (above) Ranch at Puakea.

The second component of the value I see is in the comparison with recent land sales. There have been three 20-acre lots sold this year in the Hawi to Kapaau district we call Kohala:

• The first sold, last April, was not in a gated community, but accessed by a county road that is in parts unpaved. At a similar elevation above sea level, it had no public electricity available, and a sub-meter for county water. A large portion of that lot lies in a gulch…an advantage for some buyers, but not valued by all. The price for that lot: $777,000.
• The next parcel, sold in July, was also outside of a planned development. Access is right off of one of the main roads in the area, Kynnersley Road, which means all utilities available at the road. On the other hand, this lot is at a significantly higher elevation, and care would have to be taken in building to be clear of road views and noise. The price: $795,000.
• A lot in Puuepa Ranch sold in November for an unbelievably low $525,000, nearly half the previously recorded sale. The challenge in this small development was that one of the earlier purchasers decided to simply do a strategic default when their land loan came due, hence there is an REO (bank-owned) lot dragging down the pricing. Sales ground to a halt in Puuepa when the wind farm powered up just to the East. I’ve taken the time to sit on available lots with prospective buyers at sunset so they can see that the orientation of their home will be with its back to the windmills, but the first impression is usually a strong negative. Although there is access to the oceanfront and historic sites from the lower boundary of this project, some prospective buyers are also bothered by the idea of a major heiau, and public usage of the area between them and the ocean.

If you want to know more specifically about Ranch at Puakea Lot 10, feel free to contact me directly. I am not the listing agent, but have spent significant time on the lot this year (a long story involving pasture for my horses!). I also can compare and contrast with my listing on lot 3 (MLS# 230339), which just had a $100,000 price reduction.

A hui hou,

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