Honua Kai Sales History

Overview   |   Sales History   |   Analysis   |   Current Trends   |    Conclusion

Since its introduction as the first Fee Simple beachfront property in Ka'anapali in over 25 years, Honua Kai has been the subject of significant coverage. And with its unique value proposition as a worldclass luxury resort with one of the best beaches in the world at its backyard, Honua Kai has been a prime target for savvy buyers looking for the perfect mix of business and pleasure: investing in a vacation property capable of generating substantial rental income.

Honua Kai Overview

With high-end finishes, a seamless integration of outdoor/indoor living, impeccably kept grounds, and amenities worthy of a 5 star hotel, Honua Kai offers real estate ownership unlike any other in Maui. Built first, the Hokulani tower consists of 188 units spread across 10 floors, with varying degrees of view corridors and interior living space. And the Konea tower consists of 191 units atop 10 floors, with the tower at a different angle than its southern counterpart in order to maximize view planes and privacy. Both towers are anchored by a series of pools befitting a luxury resort in the middle of the Pacific. Other amenities for the exclusive use of owners and their guests include a fitness center, lobby with concierge-styled services, an on-site deli, the highly-acclaimed Duke's restaurant, parking, and a newly opened spa. There is mixed speculation as to whether the developer will eventually construct the planned Luana enclave with luxury villas available for purchase, but please contact us for more definitive information.

Sales History

With 561 sales totaling $654,014,816 spanning over nearly five years (as of this writing on August 22nd, 2013) it can be quite daunting to analyze that amount of data in a meaningful way. So let us examine by using various metrics, to include average sales price, median sales price, and (arguably most insightful) price per square foot. First, it is noteworthy to mention that sales in 2009 and 2010 included a large number of pre-launch sales (signed years prior) coming to fruition - so in essence, they can be argued to be reflective of the market environment at the time of contract.

In a large property with varying offerings, from entry-level studios in the $500K range to penthouse 3 bedroom unit fetching ten times that amount, looking at overall averages may be misleading - but it can also give a good perspective of the overall market and its direction so it's worth reviewing.  As one can see from the chart below, prices took a sharp downward turn in 2011 but have seen a significant return thus far in 2013.

And now, let's break it down the same metric by size of unit. Two things that jump out is that the price per square foot for studios has been very consistent with minimal fluctuation (as compared to other size units) and that 3 bedroom units have been the beneficiary of a marked improvement in 2013 - more details on that later.

And by taking a look at number of sales, we can see that the bulk of Honua Kai sales took place in 2009 and 2010 by the developer, yet after a low point in 2011, the following years are trending upwards.

Condo Analysis

But in order to gain a better perspective of values and trends in a sub-set within a micro-market, let us examine each unit type.

Studios

Studios are in the stacks 19, 23, 33, and 37 of the Hokulani tower and stacks 15, 21, 31, and 37 on the Konea tower. As it becomes apparent, studios are in the inner corners of the courtyard - with most offering excellent views of the resort overlooking the ocean, while still being far enough from the pool as to not experience much noise. These are considered prime locations within the complex and as such, Honua Kai studios enjoy high demand as vacation rentals. Coupling the lower cost of acquisition with lower maintenance fees, while still producing significant rental revenue, it is no wonder these are popular among savvy investors. The price per square foot has not varied much, from $1,108 in 2009 to 2013's $1,127 - with the lone exception of 2010's $1,232. And below, we can examine the average and median sales prices through the years.

1 Bedroom Condos

The 1 bedroom unit subset at Honua Kai is one of the most interesting, as units can vary from premium stacks such as Hokulani's 13 stack and Konea's 06 stack, to less desirable mountain-facing Hokulani 24 stack. And going further, there is variance within this subset with the 1 bedroom + den units. What makes the 1 bed + den units so desirable is that they are in sought-after stacks such as Konea's 06 and Hokulani's 42 and the income these units can generate is almost en par with non-premium 2 bedroom units yet are sold at lower sales prices and incur a lower maintenance fee than the 2 bedroom counterparts.

So with that, let us review below the average and median sales prices through the year. After a downward spiral leading to 2012, the first half of 2013 is seeing a marked improvement in values for 1 bedroom units. 

2 Bedroom Condos

There can be marked differences within the 2 bedroom Honua Kai micro-market, with some of the more desirable stacks, such as Konea 03 stack and Hokulani 05, selling for significantly more than other others, such as Hokulani's 22 stack. Worth noting is that units such as Konea 812 may appear as though they are 'great deals' at first glance as one of the largest 2 bedroom unit - but the fact that is is a choppy 1 bedroom + den loosely retrofitted/converted to a 2 bedroom unit but with poor visibility and a closed off floor plan.

Looking for a specific type of 2 bedroom Honua Kai unit? Contact us, we know the market exceedingly well and would be happy to answer any questions that may have.

3 Bedroom Condos

For those seeking luxury living with all the conveniences of a modern, highly acclaimed resort in Kaanapali, the choice becomes clear:  Honua Kai 3 bedroom luxury condos! These are positioned mainly in the front of stacks of the towers (02, 50, and 51 in Konea  and 01, 02, 50, and 51 in Hokulani) and in the center stacks of the 'U' (25 and 29 in Hokulani; and 25 and 29 in Konea). Even within this luxury sub-set, there are some that are far and above the rest in terms of unique value proposition, such as Hokulani 501 and 650, and their respective counterparts in Konea 601 and 651. And for those interested in the convenience of ground-level living (think walking directly to the pools, restaurant, etc. from your unit), then Konea 150, 151 are among the strongest values in all of Maui - with Hokulani 101 and 102 holding among the most unique values that will EVER be found on Maui, turnover is likely to be minimal with these specialty legacy properties. Now let us examine average and median sale prices through the years:

What is clear is that these units offer significant square footage, a solid investment opportunity, and a setting unlike any other in West Maui. We know the Honua Kai 3 bedroom micro-market, contact us for details.

Recent Honua Kai Market Trends

But of course, although historical sales data can provide good context and mirror larger, long-term cycles, these are not necessarily reflective of today's current trends and market conditions. As such, let us examine how the first half of 2013 is stacking up to the same time period of the previous year. At first glance, that 1H 2012 recorded 47 sales versus 1H 2013's 43 may be misleading - sure, the current year period had slightly fewer recorded sales but let's look deeper at how those sales have broken down:

What becomes most poignant is that sales in the first half of 2012 were, up to a large extent, almost exclusively 1 bedroom units - and it is noteworthy to point out that there were no sales of 3 bedroom condos within that time period. However, 2013 saw a more balanced absorption, with 2 bedroom and 3 bedroom sales experiencing marked improvements. That translated in an increase in sales volume of over 60%:  1H 2012's $28,106,100 increasing to 1H 2013's $45,924,955! Caveat, the market continues to recover and shifts quickly, contact us for the latest information on sales activity, Honua Kai news, new inventory, etc.

Conclusion

As the Honua Kai real estate market continues to evolve, there are some reasonable conclusions/observations that can be made:

*  Developer: The developer has long included 2 years of pre-paid HOA fees as an incentive - and for current owners purchasing additional units, it is 3 years. And with some special units being offered with 3 and even 5 years of pre-paid HOA's, it is clear that the developer is intent in selling its remaining inventory. However, for bargain hunters, the developer typically does NOT come down much on price based on their significant analysis of market values and current trends.

*  Absorption: As noted above, 2011 and 2012 saw absorption by the market of primarily the entry-level inventory. However, what is becoming clear is that buyers are again gaining confidence and purchasing some of the premium 2 bedroom / 3 bedroom units.

*  Financing:  In the years immediately following the real estate crash, financing for properties such as Honua Kai (condotels/non-warrantables) was unnecessarily stringent. However, in the past year we have seen lenders loosen their qualifying criteria and we are seeing more well-qualified buyers again procure financing. Be prepared to put at least 25% as down payment (and our Canadian clients can expect at least 30%). Be mindful that there are only a small handful of lenders who underwrite these type of mortgages, so feel free to contact us for more information.

*  Return On Investment:  In terms of ROI, Honua Kai presents one of the strongest values - arguably, THE strongest - in the Maui real estate market, perhaps even in all Hawaii. And as the resort continues to earn a reputation as one of the best destination locations in West Maui, occupancy and rental rates continue to climb.  We can discuss in finer detail, contact us to better gauge your personal real estate objectives.

*  Resales: As mentioned above, developer inventory is dwindling and with the overall Maui real estate market trend upwards, we are finally arriving in market conditions in which some original sales are able to sell at a profit - of course, this is not all inclusive of every unit as it is dependent on acquisition cost.

We take great efforts in following micro-market conditions and have a keen pulse in the Honua Kai market. For those interested in purchasing or selling a Honua Kai condo for sale, contact us - our objective is to inform our clients with all relevant information with which to make an educated decision and to make the purchase process as seamless/enjoyable as possible.

Honua Kai Resources

All the sales data and property information above are deemed reliable but are not guaranteed. We have taken great care to examine all data available through the Realtors Association of Maui and the following resources:

Hokulani - Floor Plates and Map

Konea - Floor Plates and Map

Hokulani - Developer's Public Report (large file, contact us for access).

Konea - Developer's Public Report

Honua Kai Biennial Registration