While doing research related to a major proposed master planned community on the island of Maui, our Vice President of Advisory Adam McAbee recently spent several days touring vacation home projects on three of the four primary Hawaiian islands (Maui, Kauai and the Big Island). What he returned to the mainland with was a renewed sense of optimism as it relates to the vacation housing market there. Since the economic collapse in 2008, new vacation home projects have been forced to claw their way through the worst housing downturn in recent history, hoping to achieve a sale here or there, and projects that were conceived during the peak of the market (but had not yet opened) were quickly moved to the back burner to await better days. Since 2013, however, a notable shift has occurred, with projects that remained active rising from the ashes and those that were planned being returned to the front burner. Led by improved consumer confidence, healthy island tourism and solid job growth back home on the mainland’s west coast, buyers are once again moving off the fence and buying that dream vacation home they always wanted.
The two examples highlighted in the video above include Kennedy Wilson’s 450-acre Kohanaiki on the Big Island and DMB’s 1,000-acre Kukui’ula on Kauai. Both are highly-amenitized, luxury vacation home destinations that have experienced a burst of activity over the past 18 months due to their desirable setting and quality product offering. Also see the graphs below, which illustrate visitor trends to the islands and the expectations of numerous local real estate professionals regarding the direction of the market over the coming year. Overall, the collective changes in the market are a welcomed trend and the spirit of Aloha is once again resonating through the sales offices of new developments around the state.
Some of the key insights learned include:
Optimism exists among local real estate professionals
Future supply, albeit limited, is on the way
Demand is strongest at the high end of the pricing spectrum, though lower-priced projects (see Pili Mai by Brookfield Hawaii) are also moving forward
HOA dues remain a consideration, even at the highest end of the market