Lower prices drive rebound in resort home sales
Higher demand and improved buyer confidence also helped the boost
By Andrew Gomes
Article from: Star-Advertiser
Buyer demand for Hawaii homes broadly rebounded last year, and a new report shows that the same was true for one segment of the state’s housing market: resort residences.
Sales of condominiums and single-family homes — new and previously owned — as well as house lots at master-planned resorts such as Wailea on Maui, Mauna Lani on Hawaii island and Princeville on Kauai ended a four-year slide with a 42 percent surge to 1,473 properties last year from 1,040 the year before.
The surge was in line with home sale increases for all homes on the neighbor islands, where gains last year ranged roughly from 20 percent to 60 percent. Most resort home sales were on the neighbor islands as opposed to Oahu, where the rebound for all home sales last year was closer to 10 percent.
The report by local market researcher Ricky Cassiday of Data@Work said the rebound in resort home sales was aided by improved confidence among buyers and the slow economic recovery, though the big driver appeared to be lower prices.
“No way around it,” Cassiday said in the report. “This strong rebound in activity is thanks to dramatically falling prices.”
The average sale price was $1.1 million last year, down 14 percent from nearly $1.3 million the year before.
Cassiday’s report said the average peaked in 2008 at nearly $1.6 million, which put the cumulative decline since then at 29 percent.
It’s uncertain whether prices will rebound this year. The 2009-10 price decline was a record. The previous record drop for resort home average prices in Hawaii occurred in a single year, 1977, when the average fell 27 percent, according to Cassiday.
Cassiday said Hawaii’s resort home market this year likely will either see prices stabilize, which could slow sales, or further price drops that would help sales continue rising. He said he’s betting more on prices rising slightly.
Last year, many resort home sellers were dropping prices. In other cases, lenders were pricing property attractively after foreclosure.
Cassiday’s report said 9 percent of resort home sales last year were foreclosures that sold for an average $737,343 compared with an average $1.35 million for nonforeclosure resort home sales. A report by RealtyTrac released earlier this year said 11 percent of all home sales in Hawaii were foreclosures last year.
Another factor in the average price decline has been developers cutting back on building high-end homes amid the economic downturn.
Developers sold 371 new resort homes last year, an 11 percent decline from the year before, the report said.
The divergence helped pull down the average sale price for all resort homes last year, as the average new home sold for $1.5 million compared with $971,277 for the average previously owned home.
Cassiday expects developers will have a smaller share of resort home sales this year if buyer demand grows ahead of home production by cautious developers slowly resuming construction.
In some cases, developers are offering incentives to spur sales.
Earlier this year, Castle & Cooke tried auctioning all its unsold inventory of resort property on Lanai. The company offered 11 homes and three lots, and ended up selling five condos at Manele Resort for close to $1.2 million each on average, or about 80 percent of the price for the most recent previous sale at Manele last year.
Last month, Brookfield Homes Hawaii publicized efforts to sell three golf course homes in its KaMilo subdivision at Mauna Lani with prices starting at $799,000. Last week, Brookfield announced an incentive of up to $50,000 in free designer furnishings for buying select KaMilo homes before May 15.
According to Cassiday’s report, there were 386 sales last year at the least expensive end of the market, between $250,000 and $499,000. At the high end, there were 358 sales for properties of more than $1 million.
Near the height of the market in 2006 and 2007, there were about 150 sales under $500,000 in each year compared with about 800 sales over $1 million.
$1.1 million. The Valley Island has held the top spot since at least 2006. The average on the Big Island was $704,328, followed by $465,369 on Oahu and $428,690 on Kauai.
Maui also had the most sales at 562. Hawaii island was next at 401, followed by Kauai at 345 and Oahu at 162.
If you live in Hawaii, try to keep your feet in the water and off of the gas pedal. As gas prices continue to increase throughout the country, the state of Hawaii is breaking records with its gas price at $4.51 a gallon for unleaded.
But, other states such as Alaska, Connecticut, Illinois, New York and the District of Columbia are also charging customers over four dollars for a gallon of gas. Trailing just a few cents away from four dollars per gallon are Indiana, Michigan, Nevada and Washington.
Hawaii residents have hit a high gas price before. In 2008, gas prices rose to $4.50/gallon. As gas prices throughout the country continue to rise, there will be less vehicular travel and more walking or transit transportation.
Having a vehicle that eats up your gas isn’t always a necessity. You could trade it in and purchase a more budget-friendly vehicle during the rising gas price period, or find alternative methods of transportation on and between our eight beautiful islands. Many people are investing in hybrid vehicles, like the Toyota Prius and all electric vehicles like the Nissan Leaf. With the federal and state tax credits for 2011, the Nissan Leaf is extremely affordable.
Another popular move in Hawaii is to install a solar system on your home to reduce or eliminate your electric bill. The payback period in Hawaii is very fast when compared to the other 49 states. Solar also has a healthy federal and state tax credit for 2011. Whether the state tax credit will be extended for 2012 or not, is currently up in the air.
Marriott to break ground for new hotel on Maui
A new 138-room Courtyard by Marriott hotel is expected to cost $16.5 million
By Andrew Gomes
Article from: Star-Advertiser
A decade-old plan to build a hotel near Maui’s main airport in Kahului is finally moving forward.
Participants in the venture led by Alexander & Baldwin Inc. announced that construction is slated to begin next week on a 138-room Courtyard by Marriott hotel. A groundbreaking ceremony is scheduled for today.
The project has long been desired by tourism officials who lament the lack of visitor accommodations near the airport, Maui’s commercial core and county government offices. But economic factors stalled development for several years.
A&B discussed the project publicly in early 2001, but after obtaining county approvals including a zoning change in 2002, the company declared in 2004 that it had deferred the project because of high construction costs.
Now A&B said the timing is right to build the hotel, which is estimated to cost $16.5 million.
“The economy is coming back,” Grant Y.M. Chun, vice president of the real estate subsidiary of A&B, said in a statement. “We are confident this hotel — long anticipated, for sure — will be a welcome and convenient option for short-term visitors from the neighbor islands, government officials desiring proximity to Wailuku offices and, quite possibly sports event or family reunion attendees.”
Marriott expects the hotel will appeal to business guests, travelers and visitors interested in exploring Central and Upcountry Maui.
The four-story complex will include a business center, meeting rooms, a pool, fitness center, bar and lounge. The hotel also will include a guest laundry, surfboard storage and a convenience store.
The hotel will be the third Courtyard hotel in Hawaii. The others are in Waikiki and on Kauai. One is also planned for Laie. Overall, Marriott presently manages 14 hotel and time-share properties in Hawaii under the Courtyard and other brand names.
The Kahului hotel will be on a 3-acre site at the intersection of Dairy Road, Haleakala Highway and Keolani Place, which leads to the airport.
R.D. Olson Construction, an Irvine, Calif.-based firm that has built Marriott hotels, is the contractor for the Maui project. A&B estimates that more than 50 jobs, including some for local subcontractors, will be needed to build the hotel.
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