When you sell real estate for Hualalai Realty but you need to live closer to the schools in Kamuela for your young children, where do you choose to live? A friend and colleague of mine is facing just that puzzle. We spent the weekend brainstorming about the choices in properties for sale on the Kohala Coast. He and his family have narrowed it down to just two oceanfront communities: Halii Kai at the Waikoloa Beach Resort, and the small community of Puako, nestled between the Mauna Lani Resort and the Mauna Kea Resort.
Buying Oceanfront in a Buyer's Market
The appraisers tell us that in a buyer's market, "location premium" gets squeezed. What that means is that the premium a buyer would pay (and a seller receive) for oceanfront or ocean view real estate, relative to a similar property without that feature, diminishes in a down market. Thus the eventual upside potential for those premium locations is greater. If you can afford to buy oceanfront property, now is the time to do it!
Two sides of the street in Puako on the Kohala Coast
There is a single road running the length of Puako, with a single row of houses on each side (except in a few locations where the lots have been split to allow two buildings on one lot). The homes for sale on the ocean side of the street are obviously more valuable than those across the street, many of which do not even have an ocean view because their view is blocked by the homes across the way.
At the market peak, a nice home on the mauka (non oceanfront) side of the road would have sold for the $2 million range. Now cottages are available for $1 million or less on the mauka side, and would sell for double that on the oceanfront.
My favorite active listing across from the ocean is Hawaii Life's: a nearly new cottage that mimics the traditional style, built at the front of the lot so the new owner can-if they choose-build a more substantial home behind:
Best buy at Puako: $1 million for this cottage across from the beach (MLS 240224)
On the Puako beach side, the house I think should be the next to sell is listed for $2,500,000...and based on last year's sold properties, should be prepared to accept an offer in the $2,000,000 range:
This 2-bedroom Puako beachfront home is listed for only $2,500,000 (MLS 238957)
If your taste and need is for a more substantial home but in a non-resort location, there is currently only one listed at Puako, the King estate offered for $4,500,000. At that price point, the savvy buyer would want to compare with oceanfront Kolea homes...but that's another blog post.
A hui hou