Vacation-home market rebounds

Hawaii vacation-home buyers finally came back from, well, a vacation of sorts last year.

Sales of residential real estate at resorts statewide rose in average price last year to end four consecutive years of declines, according to a report by local housing market researcher Ricky Cassiday.

"The market’s turned," he said. "It’s going up."

Cassiday’s report counts sales of new and previously owned single-family homes, condominiums and residential lots at master-planned resorts such as Ko Olina on Oahu, Wailea on Maui, Princeville on Kauai and Hualalai on Hawaii island.

A rebound in this market had been anticipated in 2012, but the average property sale price two years ago fell 11 percent to $943,833 to mark the first time since 2004 that the average was below $1 million.

Cassiday categorized 2012 as an unexpected disappointment.

Last year, however, the average unit sale price rose 15 percent to $1.09 million while the number of sales jumped 32 percent to 1,583 and represented the highest volume since 2007.

The combination of the volume and average-price gains produced $1.7 billion in transactions last year, a level of sales not reached since 2008, when the average sale price peaked at $1.57 million.

The total volume record was about $2.9 billion in 2005.

Last year’s rebound was fueled by record tourism, low interest rates, the strengthening economy and rising real estate values in primary housing markets in Hawaii and the mainland. Buyer confidence and some increased new home production by developers also played a part.

Cassiday noted last year that developers in 2012 were having difficulty financing new resort home projects, which he said contributed to a longer-than-anticipated lag in a market rebound.

Last year, developers were more active and increased the number of single-family home and lot sales. However, many new condos being built won’t complete sales until construction is finished in 2015, according to the report, which said the number of new condos sold fell to 96 last year from 125 the year before and a high of 872 in 2006.

One developer that was more active selling resort homes and house lots last year was Alexander & Baldwin Inc., which reported selling 30 residential properties at three resorts on Maui, Hawaii island and Kauai last year, up from 18 the year before.

At one A&B project, Kukui’ula on Kauai, increased home construction and sales momentum led the company to introduce higher-priced properties for sale, including homes priced up to $8 million.

A&B reported signing four binding contracts for single-family homes at Kukui’ula in January for an average price of $4.5 million. Last year, A&B sold eight lots for an average $1.2 million and two cottages for an average $2.8 million.

Cassiday said the high end of Hawaii’s resort home market appeared to gain the most momentum last year, while sales at the low end decreased.

There were 185 sales for over $2 million last year, up from 119 the year before, the report said. For low-end properties between $250,000 and $499,000, the number of sales decreased to 344 last year from 415 the year before.

One condo project on Maui, Honua Kai Resort & Spa, reported that the average price for units sold last year jumped 81 percent to $1.2 million from about $660,000 the year before.

The 628-unit condo complex fronting Kaanapali Beach reported selling $65 million in new units last year, up 20 percent over the prior year.

Honua Kai launched sales efforts in 2005 and is about 90 percent sold out, with remaining inventory ranging from the mid-$700,000s to $3.8 million.

Cassiday’s report said that by island, Maui had the most resort home sales at 501 last year, up from 455 a year earlier. There were 412 sales on Kauai, 407 on Hawaii island and 120 on Oahu.

The priciest properties also were on Maui, with an average sale price of $1.44 million followed by Hawaii island at $1.39 million, Oahu at $694,857 and Kauai at $659,606.

Cassiday said that the resort home market should continue to grow this year along with the economy, tourism and the general real estate market.

"This is the bottom of the hill, or the top of the foothills looking up," he said.