Honua Kai Sales Update May 2015

This month's Honua Kai monthly update comes a bit early - unless new sales are recorded (or reported) over the weekend, then the below form the basis on which to report current micro-market conditions. Any necessary updates will be posted immediately below and check regularly for Honua Kai condos for sale.

New Listings

NO NEW LISTINGS IN THE MONTH OF MAY!!! Only one new listing was inputted in the month of May, but it was for statistical purposes only (the sale of an unlisted property, which will be detailed below). The lack of new listings can be VERY alarming for buyers as pent up demand is NOT being met with new inventory. For sellers, this can prove to be a prime opportunity to come on the market for a fast absorption. More on this at the conclusion of this post.

Pending

No transactions currently pending (in escrow), as reported to the Realtors Association of Maui. As a caveat, the developer does not always list their inventory to the MLS until closing, hence ghost inventory may be currently in escrow that is not documented. 

Sold

May 2014 was a phenomenal month in that 16 sales recorded. However, May 2015 proved to be a very successful month but in a different aspect. Whereas May '14 saw tremendous absorption, the median sales price was $1.15M, which is easily eclipsed by median of May '15 at a whooping $2.195M. Clearly values have not increased THAT drastically in the past 12 months, but what is important to note is that the high-end units are being absorbed at a rapid pace, far outnumbering smaller units (at least when looking at such a granular levels such as month year over year). The total sales volume was nearly $16M for the month. A very interesting note is that of the 7 sales, 5 were financed and only 2 cash sales (year to date, across all sales on Maui, over 41% have been cash). The 7 Honua Kai sales in May were as follows:

Konea 614 - Mountain-view unit facing the courtyard. It has the elevation but due to the layout of the building (the '12' stack protrudes forward), it does not have view corridors. Selling for its asking price of $739K, it could be argued that the buyer got a good deal on the purchase.

Konea 403 - Interior courtyard 2 bedroom units have selling very competitively in the past year and the sale of this unit for $1.565M is reflective of current market values.

Konea 313 - The '13' stack in Konea is highly sought-after due to its large lanai and orientation. That is sold for more than 403 (which had more elevation and was closer to the front of the tower) is reflective of the value in the lanai. Sales price of $1.59M

Konea 629 - As the developer diminishes its inventory of center stacks of 3 bedroom villas, they have become more of a commodity and sales price have climbed accordingly. Sales price of $2.195M with no concessions (and not a developer sale). 

Hokulani 404 - Forward enough to NOT be affected much by the construction on the southern parcel (Westin), this unit posed a strong value proposition. A 3 bedroom unit with big view corridors for $2,227,450 = good value both in terms of long term growth and lifestyle proposition.

Hokulani 350 - The 3 bedroom front-row villas have been selling consistently in the mid $3M's, with some special units tipping the scales quite substantially. Hokulani 350, however, has ocean view corridors which go over the roofline of Duke's and with close proximity to the pools, it may be subject to more noise than say the northern Konea villas ('50' and '51' stacks) or the southern Hokulani villas ('01' and '02' stacks). With a $3M sales price, it is a fair adjustment in value.

Hokulani 501 - There are special properties throughout Maui and Hokulani 501 is among the most special Maui luxury condos. Front row with virtually the best view corridors in the entire property (quiet side of Hokulani, yet overlooking the pools/restaurant for a resort feel) AND over 3,000 square feet of outdoor space, totaling nearly 6,000 square feet of enjoyment. At a sales price of $4.6M, the new owner should be proud in the purchase of one of the most special condominiums on Maui. 

Conclusion

We keep harping on this every month, but values ARE increasing and those who stand on the sidelines may get themselves priced out of the market very quickly. The lack of inventory is more pronounced with NO new listings hitting the market in May. There are specific niches that are underserved now by lack of options: studios, partial-view 1 bedroom condos, and mountain-view 2 bedroom condos.  Owners of Honua Kai condos continue to push values upwards, but it's important to note that although it's a healthy sign that the market is absorbing ahead of the trend, for those who choose to price too high it has the opposite effect (prospective buyers overlook them due to the disparity between perceived value and asking price).  Furthermore, that such a high amount of the sales were financed is a reflection of a more lenient lending environment. However, keep in mind that although it is a financeable purchase, only a few lenders will successfully underwrite this purchases - many mainland lenders will have no problem in issuing pre-approval letters but ultimately fail in financing due to the unfamiliarity of the Hawaii real estate market. Need contact information for lenders experienced in assisting purchasers at Honua Kai? Contact us for info. 

Lastly, as the bulk of the sales in May were two bedroom units, let's take a moment to discuss that micro-market more in depth. To start, review the chart below to gain a better perspective of the 2 bedroom micro-market and the comparative status of the current market within longer trend lines - this chart details the price per square foot of every sale of 2 bedroom units since its introduction in 2009 (with different floor plans offering substantially different square footage, this metric is arguably the most accurate for assessing value).

In explaining current market conditions to prospective buyers, one of the common concerns we hear is that increases in values are NOT sustainable and that values are at the highest they have ever been. To that we would counter than since this niche bottomed out in the spring/fall of 2011, there have NOT been any sustained decreases. Furthermore, it can be argued that as a whole, typical micro-markets go through cycles - which of course are highly influenced by the larger economic/sociopolitical landscape - and the height of each cycle supersedes the one prior to it. Although Honua Kai sales started recording in 2009, the bulk of those sales were the result of pre-sales which predate the recession, thus give a sense (albeit limited) of what viable buyers were willing to pay for Honua Kai condos in pre-recession conditions. If we are to use that as a baseline, then it is reasonable to project a trendline in which future values will exceed those peaks reflected in the first quarter of 2009. 

Contact

The Honua Kai property has become one of our favorites on Maui and we have garnered an expert-level wealth of knowledge about the property, its value proposition/features, and micro-market conditions. For those interested in exploring opportunities or discussing current conditions at Honua Kai, contact us via the form below or call 808-385-5034.