The number of homes on the market has been remarkably small through the downturn, but prices are beginning to heat up. Here are three regions where your home-buying dollar might pay off more than others.
By Melissa Chang
Master-planned, family-friendly developments rule in Kapolei.
photo: courtesy kapolei property development llc
Asking Oahu realtors to point to the hottest neighborhood on the island is like asking a foodie to name her favorite restaurant. It could just be a matter of taste, since quite a few neighborhoods could claim to be 10 to 15 minutes from a beach, have picture-perfect weather, and be densely populated with people and amenities.
Statistics don’t quite help narrow down which neighborhoods are hottest, as sales have been flat all year. The inventory has dried up, especially in lower-priced homes. “There are more homes available at the upper end, so, of course, our statistics will show median sales prices on the rise,” says Stephen Lopaz, Honolulu Board of Realtors (HBR) research analyst. Oahu sales have been so flat that the numbers can be a little misleading when trying to determine a trend. For example, Hawaii Kai showed a 13 percent increase in sales for June 2012 over June 2011, but that simply means that 13 homes sold last year, and 14 homes sold this year.
Some areas, however, are anecdotally emerging as more desirable places to live, each for different reasons. By “desirable,” we don’t simply mean affluent; a combination of factors are driving home buyers to different areas, whether it’s prices or the amenities in the neighborhood. The areas we’re watching don’t necessarily have brisk sales now, but we expect more activity as time goes on.
It’s taken more than a decade, but Kapolei is finally taking shape as Oahu’s second city.
According to statistics from Data Analysts Hawaii Inc., housing has tripled since 1990, going from 11,722 units to 31,730 in 2010—with 16 master-planned communities up or coming.
Government agencies have moved their offices out west, and new attractions have sprung up, including Podium Raceway, the Kroc Center, and various family-friendly retailers and restaurants.
“Kapolei has become popular with people relocating from the Mainland, who tend to want their home to be a brand-new building,” says Dawn Marie, a broker at Kahala Associates.
While most tend to associate such master-planned communities with mid-price, cookie-cutter houses, the developments often offer luxury homes along the golf course with the opulence and comfort of one you might find along Kahala Avenue, at a fraction of the price. A large fraction, but a fraction, nonetheless.
“The growth in population and businesses means more services are needed in Kapolei, like doctors and lawyers,” explains Joan Matsuoka, broker in charge at Ivy K Realty. “These higher-paid professionals still want to live in a comfortable home; they just need to live closer to work.
“They’re also popular with people of affluence who have retired, but want to live away from the congestion of metro Honolulu,” Matsuoka says.
She adds that the entire ‘Ewa Plain should be considered the hot spot, not just the city of Kapolei, as the development is much more vast.
Kahiwelo at Makakilo (new Phase 2)
3 to 5 bedrooms – 2 to 3 bathrooms
1,400 to 2,000 square feet
$500,000 starting price
In a few years, if everything develops in the same direction, Kakaako is expected to be an even more hip and vibrant area to live and work.
Through a gradual transformation with cool new businesses like the Whole Ox Deli and 808 Urban, and events like Pow Wow Hawaii and Eat the Street, Kakaako has become a happening place to be. Even some older bars in the industrial parts—Café Duck Butt, anyone?—have become hotspots with young socializers.
In a few years, if everything develops in the same direction, it’s expected to be an even more hip and vibrant area in which to live and work.
“If you look at Kakaako, you have to include the entire Ward area,” reminds Coldwell Banker Pacific Properties President Chason Ishii. “Kakaako doesn’t have the up-and-coming residential developments yet, but the commercial activity there is enhancing life for the residents in the adjacent area.”
In Kakaako itself, there are condos such as Royal Capitol Plaza, Imperial Plaza, 909 Kapiolani, Pacifica Honolulu, 1133 Waimanu, Waterfront Towers and Keola Lai, but Ishii points out that Hokua, Koolani, Nauru Tower, Hawaiki Tower and 1350 Ala Moana will also benefit from the renewed energy of the adjoining neighborhood.
It’s still a neighborhood to watch, as residential real estate continues to grow amidst the businesses, like A&B’s Waihonua condominium in the next few years, and Kamehameha Schools’ ultimate urban utopia planned for the more distant future.
Locals are rediscovering city-suburban life in Diamond Head's classic areas.
photo: courtesy david croxford
The homes in older diamond head neighborhoods have larger lots so buyers get more home for their buck as long as they don’t mind a residence that may need some work.
The name “Diamond Head” is a little misleading, as HBR’s Multiple Listing Service classifies this not just as the upscale neighborhood around the volcano, but an area spanning from Kapahulu and Palolo, out to Aina Haina. Lopaz says this region has seen a 7.9-percent increase in median sales price, up to $850,000 from $788,000 last year.
But remember, many of the homes—especially in Kapahulu, Kaimuki and Niu Valley—tend to be older. The locations may be better than those in Kapolei, but the structures have been in place for decades. Why would buyers want an old home?
“Whereas Mainland buyers want brand-new homes, local people want to come back to town,” explains Marie. “They want to feel more cozy at home, with an old-fashioned neighborhood like the one they may have grown up with, and a yard for the kids.
“You may see these buyers adding midcentury architecture, restoration, and modern features and appliances, but keep traditional flooring and warmer colors,” she adds.
The homes in these older neighborhoods have larger lots than those in Kapolei, so buyers get more home for their buck as long as they don’t mind a residence that may need some work.
Such older neighborhoods have the bonus advantage of having established businesses in place, so there’s no need to build the community from scratch. Like Kakaako, this area has also seen a revitalization in the businesses around it, making it a destination for shopping and eating. From upscale eateries like Salt and 12th Avenue Grill to quaint spots like Your Kitchen and Kaimuki Grill, area residents have a wide range of dining options conveniently nearby. The weekly farmer’s market at KCC on Tuesdays and Saturdays can be a blessing or a burden, depending on how you look at it.
4047 Kaimuki Ave.
4 bedrooms – 3 bathrooms
1,930 square foot home
6,194 square foot lot – $849,000 fee simple
photo: courtesy brandon lau
4145 Koko Drive
3 bedrooms – 3 bathrooms
2,338 square foot home – 6,768 square foot lot
$849,000 fee simple