9 Facts About Kona Real Estate
9 Facts to Know About Kona Real Estate
Kona real estate is booming and many savvy, high net worth investors are taking notice. Accredited investors are continually on the lookout for extraordinary opportunities. They understand the benefits of alternative investments if they can find those rare situations that check all the boxes. The options are broad and can get confusing, but one asset class has streaked ahead of the pack - none other than real estate.
We will deal here with nine outstanding facts that connect to a real estate venture in Hawaii. It has the hallmarks of yielding exceptional returns for qualifying investors looking for that meaningful edge without excessive risk. Moreover, they tell a story of exceptional opportunity in a niche real estate sector that meets accredited investor needs head-on.
FACT #1 - Luxury real estate markets thrive on low-density appeal & high demand for oversized estate homesites.
2020 and 2021 are two years that luxury realtors and their clients will never forget. What seems to be insatiable demand, blowing metric graphs skyward like erupting volcanoes, luxury real estate has been on a twenty-four-month rampage. A confluence of forces merged simultaneously to drive single family (SF) prices up on a mind-boggling trajectory. They are:
- A shift in lifestyle values created by COVID-19.
- Cryptocurrency wealth building.
- Stock Markets on fire.
- Enhanced appreciation for our homes.
In the search for diversification and wealth placement, high net worth families resorted to real estate investing in places with eye-popping scenery, stretches of ocean, and space to work and relax in privacy.
FACT #2: There is a significantly low supply of luxury real estate.
The rush to buy luxury homes - new construction and resales - has pressured the inventory down. A typical comment on the lips of luxury dwellers is, “Yes, a high price for my house is great. But if I sell, where am I going to buy and live the same way?”
There’s no doubt that low inventory is the bugbear in the market’s upper layer (the top 10%). For example, in September 2021, luxury homes in units overshadowed homes for sale entering the market by 46%, bumping up to 55% in October. Coldwell Banker Global Luxury® Property Specialists in a broad consensus can’t see the gap closing in 2022.
FACT #3: There’s a fantastic upside potential of ground-up development.
In Boca Bridges, a luxury home development in Boca Raton, South Florida, GL Homes, the developer, was closing off sales in record time. With only three of four lots left, they knew of close to forty takers, so they had a lottery to pick the lucky new homeowners.
New construction has caught on like wildfire everywhere in the country, with bidding wars pushing prices skyward. In addition, the glitches in the distribution channel that hit the industry hard have resulted in severe slowdowns alongside price hikes in materials, labor, and lumber (adding fuel to the fire). However, customers eager to buy their dream home are pushing all that aside, immune to swelling home values.
FACT #4: Hawaii is a region representing massive investor opportunities.
With around ten million people visiting Hawaii annually and spending $16 billion, the region is booming. Moreover, 6% growth per year establishes it as a vibrant investment arena, especially in real estate. All the compelling facts above and below drive the islands’ markets - firing on all cylinders. The opportunities spread far and wide, embracing the mainland, famous islands like Maui and Oahu, and single-family construction on the South Kona Coast - representing a bright, fast-growth outlook.
FACT #5: Hawaii real estate prices, on average, are on a tear
Zillow indicates that the median price, taking all residences in the state into account, registered at $821,000 and for single-family homes a few thousand dollars short of a million (i.e., $982,000). Don’t expect the trend to falter in 2022 based on all the metrics coming through the pipeline. With massive investment money chasing limited stock Hawaii’s property is as hot as anywhere in the US. Looking at Fact #3 above, the Kona coast region powering ahead on the back of new construction stands head and shoulders above the rest. It’s worth taking an extra look.
FACT #6: South Kona real estate leads the Hawaii charge to attract investor attention.
According to a recent Rocket Homes report:
- South Kona two-bedroom prices grew by 12.1% between September and October 2021 (i.e., one month)
- On a second reading, December 2021 to January 2022 rose by 8.6%. For the same thirty days, a three-bedroom home’s prices shot up by 15.7%.
Metrics like this have pulled South Kona out of the “undiscovered” category once and for all. Of course, it’s still not too late to get in on the ground floor, but indications are that the elevator going up is about to leave its station, and there’s no shortage of passengers.
Fact #7: 2021 Investment in South Kona real estate is astounding!
Kona’s dramatic drop in home availability toward the end of 2022 substantiated why 87% of the thirty-nine houses listed were over $1 million. Moreover, total sales for 2021 grew year-on-year by 142% (for houses), and land close to 324%.
Fact #8: Nothing is stopping the real estate investment train in 2022.
For the year so far, Kona reflects 1,122 homes sold, a number that’s close to the 2004’s property boom that preceded the financial crisis. Put it together with everything else above, accredited investors seeking extraordinary opportunities need look no further than this corner of Hawaii that has emerged with nothing short of a blast-off.
Fact #9: The jewel in the Kona crown is within reach of savvy accredited investors
The Kona Estates at Opihihale will be the preeminent and most exclusive development on the South Kona Coast. Therefore, it represents one of the excellent opportunities for accredited investors. The latter will find that when connecting with Kona Development Partners, LLC (the developers) the investment memorandum covers all due diligence aspects seamlessly and transparently. Aside from perhaps buying a new construction home for personal reasons, the ROI projected at 27% (excluding tax benefits) deserves a detailed review.
Conclusion
Contact the Kona team for more information on this iconic real estate opportunity to leverage their experience and expertise on Kona and the rest of the Hawaiian real estate landscape.