David's Real Estate Blog | Dispatches from Diamond Head
Latest real estate news and articles from David E. Buck, Realtor
With the median sales price of homes on Oahu hitting $700,000 last summer, there's been a lot of concern about affordability for buyers in the marketplace. While this is understandably so for your average home buyer, our luxury market could have a ways to go.
Kahala's priciest listing (MLS # 201400491) for $22 million
Back in the "Japanese bubble" of 1987-1991, it was common place for homes to sell north of $20 million in Kahala. With a new era of Buyers coming in to the marketplace and purchasing homes from Alexander and Baldwin's portfolio, Kahala is back on an upswing. A number of those transactions took place privately last year, so not much is reflected on the books in MLS yet for 2014. By this time last year, we had four closings above $10 million for a total of 7 on the year. So far this year, we've only had 1 in Lanikai that sold for $11,845,000 in June.
Although the "high end" has been a little bit slower this year, there are other luxury markets across the United States that are cranking. I recently received a market update from a colleague of mine in New York City- Louise Phillips Forbes with Halstead Property. Here are some of the highlights from her summer update:
- New Development Prices are up 44% in all neighborhoods
- Co-Op Prices are up 23% and 27% for 3 bed and larger apartments
- The average price for a Manhattan apartment is up 30%
- There are 298 homes on the market over $10 Mil.
- There are 119 homes in contract for over $10 Mil.
Here's a chart to put things into some perspective when comparing New York's market to ours:
The red bar shows our true numbers. Currently, there are 24 home/condo listings on Oahu at $10 million or higher. We currently have none (showing in MLS) under contract at that price. So, one could make the argument that New York's population is 10 times more than ours, so I adjusted our inventory 10 times. Although that puts our high end inventory closer to theirs, it in no way compares to the number of properties they have under contract north of $10 million! This is another reason I see Honolulu real estate prices are still a bargain.
This past week I listed one of the lowest priced marina and ocean view units at the Ilikai in Waikiki.
Ilikai #339 (MLS # 201416937) is fully furnished with split air conditioning
This is the perfect unit for those looking for a view, yet not a big fan of heights or long elevator rides and waits. Situated on the 3rd floor, you're perched just high enough to get marina and ocean views over the deck below.
View of the marina and ocean from the lanai
In addition to the Ilikai's iconic reputation and location, this unit has been remodeled. Upgraded granite counters in the kitchen, newer cabinets and flat screen tv or just some of the upgrades. The unit is currently in a hotel pool, so this is the perfect opportunity for a 2nd home owner that wants to rent out their place when not on island.
Upgraded unit clearly not the Ilikai of the '60's
We are 1 of only 3 active 1 bedroom listings in the building as of today facing the ocean. In the past 6 months, there have been 18 sales ranging from $480,000 to $615,000. With a median sales price of $552,500 and average sales price of $551,389, we're priced to sell at $540,000. Feel free to contact me for more information.
Sunset view from Executive Centre #2001 (MLS # 201415779)
We just recently listed unit #2001. In addition to the having a long term lease, this particular unit comes with a covered parking stall. Since it's above the 12th floor, it's in the secured tower as well as being eligible to be placed in the hotel pool managed by Aston.
Relax by the pool at Executive Centre
On site security, restaurant and swimming pool are just a few of the amenities Executive Centre has to offer. As of today, there are 15 listings at Executive Centre. Although this sounds like a lot, it is less than 3% of the total project. With a price under $200,000 this is a great option for get a 1 bedroom condo in Downtown Honolulu at a great entry level price.
If you haven't heard already, Starbucks is coming soon to Aina Haina Shopping Center.
Starbucks is going in the old First Hawaiian Bank location in Aina Haina
Starbucks is the latest of many new upgrades to the shopping center that local firm Blue Rock Partners and the new ownership have undertaken to upgrade the mall. Recent years saw the addition of an upgraded Foodland Farms, a new McDonald's, a new First Hawaiian Bank and now Starbucks that's going in the old bank location. I didn't even mention the facelift that's given the original run down mall added curb appeal.
Starbucks under construction seen from the street
I'm not sure when the estimated roll out date is, however I can already see myself stopping through here in the near future between showings in East Honolulu.
Back in 2005, I recall it being difficult to find a decent 3 bed, 2 bath town home on the marina in Hawaii Kai. Shortly after the financial crisis of late 2008, prices dipped to the $700k range and some as low as the mid $600k range at some of the classic projects such as Koko Isle and Kuapa Isle. Fast forward to today and marina front town homes in Hawaii Kai prices are on the rise. Here's what's happening:
This Koko Isle Town Home (MLS # 201405950) priced at $1,025,000 is under contract
Koko Isle marina front town homes have seen the following uptick in values. Here's the average sales price by year as well as transactions thta took place:
2014 - $899,450 | 2 Sales (YTD)
2013 - $858,333 | 6 Sales
2012 - $726,500 | 8 Sales
2011 - $674,000 | 5 Sales
2010 - N/A - None
2009 - $692,000 - 1 Sale
Meanwhile, active inventory outside the one above are asking prices ranging from $975,000 (MLS # 201407165) to $1,100,000 (MLS # 201332609). We've come along way since the under $700k mark. It'll be interesting to see if the new "norm" will be set around $1 million + going forward?
Kuapa Isle town home (MLS # 201407016) under contract with asking price just under $1 million
Kuapa Isle has noticed a similar price increases since 2009 and has had very little inventory. In addition to the unit above showing as Active Continue to Show, there is another unit pending with an asking price of $989,000. What's even more amazing is there's a non-marina front listing with an asking price of $774,880 in escrow. Not that long ago you could get something on the water for that price! Amazing how the market has changed. Here's what's been happening with the average sales prices of marina front units at Kuapa Isle:
2014 - $858,333 | 3 Sales (YTD)
2013 - $820,667 | 3 Sales
2012 - $849,619 | 4 Sales
2011 - $743,600 | 5 Sales
2010 - $671,786 | 7 Sales
2009 - $691,500 | 5 Sales
Although YTD sales don't reflect much of a change over the past 2 years, the two units under contract in the high $900k range show a significant jump. It'll be interesting to see if prices trend upwards. This is a coveted community and as you can see not that many marina front units trade each year.
If you're interested in purchasing a marina front town home in Hawaii Kai, feel free to contact us for more information. We also are looking for Sellers as we are working with a number of marina front Buyers. To get an idea of what your place is worth, feel free to try our free valuation tool.
Diamond Head Circle is an exclusive enclave of homes off Monsarrat Avenue on the backside of Diamond Head. Typically, there may be a listing (or two) on the market at best. This week however, that count is up to six!
Locations of the sic homes for sale on Diamond Head Circle
Prices range from $4.3 to $16.2 million and days on market range from 451 Days to market to the latest one listed just 2 days ago. Below you'll find a brief description with a links to more detailed listing information. I've listed them in chronological order of when they came on market.
1. 3703 Diamond Head Circle (MLS # 1300580) was listed January 15, 2013
Set on over 3/4 of an acre this property originally was listed for $7,250,000 and is now available for $5,900,000
2. 3735 Diamond Head Circle (MLS # 201333344) was listed on October 10, 2013
This one is my favorite listing on the circle with when factoring in the nicest house, prime location and view. Nestled on 1.27 acres it originally came online for $13,500,000 and is now $12,500,000
3. 3824 Diamond Head Circle (MLS # 201400627) was listed on January 10, 2014
One of several listings on the circle priced around the $5 million range, this one sits on a half acre. Although the original structure was built in 1949, there was a complete remodel done just a couple of years ago.
4. 3692 Diamond Head Circle (MLS # 201402274) was listed on March 1, 2014
This one is by far the largest and priciest listing on the circle. Set on just under 2 acres, this listing is comprised of 4 parcels. It last sold for $9,700,000 cash on July 14, 2008. It has the largest residential swimming pool on Oahu and is a storied trophy property.
5. 3636 Diamond Head Circle (MLS # 201403557) was listed on March 14, 2014
Although this is another one around a half acre in the $5 million range, what sets this one apart is the quality of construction. This is the newest home for sale built on the circle that was done in 2005.
6. 3653 Diamond Head Circle (MLS # 201405994) was listed on April 9, 2014
This one was the final straw which nudged me to write the article. There's a saying in the business that "things come in threes." This capped out the 2nd batch of 3 listings. This particular one has been on and off the market since 2005 and listed 11 different times with prices ranging from as low as $2,475,000 in 2006 to $7,500,000 in 2011.
Now that the stage is set, it will be interesting to see which one of these homes sells first... there are a number of great offerings here. It just depends on wants, needs and budget. If you need some assistance buying or selling on Diamond Head Circle or other parts of Diamond Head, I'm here to help.
The Mount Terrace in Hawaii Kai is a great building. The catch is you can often have many months without any new inventory. Even more so, you can go a much longer time with no listings in the A or B stacks, which are some of the more sought after units that face the ocean.
View from the latest Mount Terrace listing to come online - Unit 8B (MLS # 201402706)
February seemed to Buck (no pun intended) that trend with 3 new listings that came online. 2 of those 3 new listings were in the B stack of the building. Unit 12B was the first to hit the market in early February and the Seller accepted an offer yesterday, just a little over 3 weeks on market.
Mount Terrace 12B (MLS # 201401342) recently went under contract
Mount Terrace 21C (MLS # 201402082) is the 3rd unit that was recently listed for $715,000
There were a total of 9 sales in Mount Terrace last year, with 4 of those 9 selling at $700,000 or above. With all 3 active listings having ocean views, I won't be surprised if the first 3 sales of the year will fetch over $700,000. For some perspective: At the peak of the market in 2005, there were 6 sales the entire year that ranged between $735,000 to $895,000. With that said, it appears Mount Terrace may have some upside in the next year or so. No bad considering one could purchase at prices that were seen almost a decade ago...
Luxury Home Sales in 2013
2013 witnessed the rebound of the luxury real estate market on Oahu. At the bottom of the market in 2009, the record home sale on Oahu was just $8,750,00. In 2012, the record sale was $10,950,000. This past year, 7 homes sold at $10,000,000 or higher. Out of the top 10, it was no surprise that 9 of them were oceanfront. As the high end market picked up, the sales took place in the usual suspects of neighborhoods known to demand the highest prices. Here's a summary of the top 10 luxury home sales on Oahu in 2013:
- 503 Portlock Road Sold on December 2, 2013 for $19,650,000
- 100 Royal Circle Sold on November 12, 2013 for $16,500,000
- 72 S. Kalaheo Ave. Sold on May 17, 2013 for $12,000,000
- 3125 Diamond Head Road Sold on May 20, 2013 for $11,250,000
- 112A S. Kalaheo Ave. Sold on June 13, 2013 for $10,150,000
- 1133 Ikena Circle Sold on September 30, 2013 for $10,001,000
- 1002 Mokulua Dr. Sold on July 30, 2013 for $10,000,000
- 1600 Mokulua Dr. #A1 Sold on March 11, 2013 for $8,000,000
- 3047 Kalakaua Ave. Sold on February 25, 2013 for $6,375,000
- 4162 Black Point Road Sold on April 22, 2013 for $6,200,000
What was really interesting to see was Lanikai making the list. Although the neighborhood has always been synonymous with luxury, there were some record sales that took place that finally put it on the map. There's been years where asking prices have been in the eight figures, however now some are actually selling there. What was even more shocking is Kahala didn't have a single sale in the top 10. I suspect that will change in 2014 as Alexander and Baldwin has started to fix up and list some of the homes they bought from Genshiro Kawamoto.
Luxury Condo Sales in 2013
On the condo market front, Diamond Head once again took the top spot with a record $7.5 million sale at Kuu Makana, which seldom come on the market with only 4 units in the complex. The next highest was a Nauru Tower Penthouse. What was interesting to notice was the number of resales finally taking place at Trump Tower Waikiki (#3701 actually sold twice). This is a positive sign of absorption as lots of inventory was sitting there for years. Here's a summary of the top 10 luxury condo sales on Oahu in 2013:
- Kuu Makana @ Diamond Head Sold on August 19, 2013 for $7,500,000
- Nauru Tower #4302 Sold on April 15, 2013 for $5,020,000
- Diamond Head Apts. #501 Sold on July 22, 2013 for $3,950,000
- Trump Tower Waikiki #3701 Sold on March 12, 2013 for $3,600,000
- Trump Tower Waikiki #3701 Sold on January 17, 2013 for $3,500,000
- Hokua #28A Sold February 5, 2013 for $3,118,000
- Trump Tower #2803 Sold on August 23, 2013 for $3,050,000
- Trump Tower #2319 Sold on June 28, 2013 for $2,988,000
- Waikiki Shore #400 Sold on November 6, 2013 for $2,905,000
- Trump Tower #2703 Sold on April 9, 2013 for $2,790,000
As you can see, Waikiki is slowly starting to get its share of the luxury condo market that's been dominated by Diamond Head and Kakaako the past decade. With the Ritz Carlton coming online, there are already sales under contract there that have shattered previous Oahu records. There's definitely some excitement and upward mobility in this segment for the next few years ahead...
If you're active duty military and have considering buying a home or condo on Oahu, now may be the time. This year, the BAH rates in Honolulu County have increased by 14.7% over the previous year!
Calling all Army, Navy, Coast Guard, Marine and Air Force renters...
Now that the housing allowance is up, Buyers may now qualify for a property they would have liked to purchase, however could not have afforded previously. The skeptics could argue that our market has increased since last year (hence the rise in rates). This is even better news for new military personal that are PCSing to Oahu as they would not have yet signed a long term rental lease. I'd recommend taking a look at your current BAH rates and see what it is you can qualify for.
Next step is to get in touch with a lender (let me know if you need some names). If you're PCSing in the near future, feel free to visit my military page to see some of the housing options and neighborhoods near our installations here on Oahu. We're to help when you're ready.
On thing you have to do if you're ever on Oahu for the Holidays is attend the Hawaii Kai Boat Parade. Every year, it seems to get better and better. It's like a mini version of one I've been to in Newport Beach, CA. There's a number of different locations you can view the boats from throughout the marina. Hawaii Kai Towne Center is the main hub. I was lucky enough to get invited to watch from a friend/past client's place in Kuapa Isle.
007: Bond, James Bond
Every year the event draws better and better participation and creativity. Above you'll see the boat that wins just about every year. This year they outdid themselves again with a James Bond theme. It was over the top! They had a live drummer playing in the front, dancers dancing in silhouettes (like the typical opening scene of a 007 movie) and 007 wearing a jet pack on top. They also had a trailing dingy (not in the photo) that was lit up shooting at the main boat. For additional kicks, they had an "Austin Powers" character on the back to add an addedl touch of humor.
We're off to see the Wizard...
Unfortunately, the photos I took from my iPhone don't do the boats justice. The boat above was also something else. They had just about the entire cast dressed up from the Wizard of Oz! I can't imagine the amount of time the boat owners, their family and friends put into the preparation. The competition was definitely taken up a notch this year and can't wait to see what's in store next year.
If you can't wait until next year to enjoy the marina life in Hawaii Kai, there are some nice listings available in Kuapa Isle and Koko Isle - two of my favorite town home projects. In addition, here's the nicest single family home currently listed that also has a great vantage point:
The marina life in Hawaii Kai is like nowhere else in Hawaii. Prices took a dip through 2008-2011, however they're now back to 2005-2007 levels. Today, there is very little inventory. If you're looking to find something on the water in Hawaii Kai, contact us to get you set up on the radar to catch them prior to being SOLD.