A record closing in Kailua highlights Hawaii’s profile in the luxury realty market
Luxury home buyers, many of whom have been drawn to Hawaii’s second home and resort market, are still finding millions of reasons to buy in Oahu as evidenced by the $11 million closing of an oceanfront estate in Kailua on Monday.
The Castle Estate, located at 59 Kailuana Place, fetched the second-largest price ever for a Windward Oahu single-family home and the largest price islandwide for the past six months. The property, which comprises three dwellings set on 2 acres of land including 314 linear feet of sandy beach frontage, was purchased by kamaaina developer Donald T. Eovino, president and principal broker of Eovino and Associates Inc., a boutique real estate company specializing in high-end development and sales.
“We are constantly looking for oceanfront properties and there just aren’t that many that are available. This property had a large amount of ocean frontage and a white sand beach,” said Eovino, who in recent years has built his business around the belief that Hawaii’s luxury single-family home market is robust and that it is poised to expand.
Although Hawaii has long been popular as a luxury second home, investment and resort market, improvements in transportation and technology have now made it a more viable year-round alternative for high-end buyers, Eovino said.
“In the last five years, we’ve seen this market grow less speculative and expand beyond a place where buyers just go to retire or vacation,” he said. “Technology has made it possible for them to live here and work anywhere.”
Many high-end buyers also view Hawaii’s luxury residential single-family market as a good value relative to other destinations, Eovino said.
“I travel a lot around the world and relative to the world, we are still the best value,” Eovino said. “We offer the best quality of life. We have access to culture, high-end resorts and restaurants, entertainment and medical facilities.”
Eovino, who coincidentally also handled the largest residential real estate transaction on Oahu this year — the $11.1 million sale of a Black Point graded parcel that he bought in 2004 for $3.5 million and developed into a Balinese-style single-family residence and caretaker’s cottage — said that he has ambitious plans for his newest acquisition.
“We’re still reviewing plans for the Castle Estate,” Eovino said, but added that he and his undisclosed partner will likely subdivide the property into three parcels and build luxury residences on them.
Eovino anticipates that the Castle Estate, like the Black Point property, will draw broad interest from buyers in the luxury market.
“The Black Point property was the first new luxury single-family home to be developed in Kahala in 25 years,” he said. “There aren’t that many new luxury homes being built in Kailua either.”
Other luxury real estate industry professionals in Hawaii have said they are equally as bullish on the market — which is still booming despite reports of declining inventory and higher interest rates on jumbo loans.
“From everything that I hear the high-end market is holding up,” said Harvey Shapiro, research economist for the Honolulu Board of Realtors. “Everything above $2 million has been pretty stable. Generally these people aren’t in the mortgage market. They don’t need to borrow funds. They pretty much just write checks for their properties.”
The upscale market has been very active this summer and in general, said Patricia Case of Case Properties International, who sold the Castle Estate to Eovino for about 86 percent of its $12.8 million list price.
“People love the fact that we are exotic, but stable,” Case said, adding that luxury buyers are still willing to pay premiums for waterfront and ocean-view properties in sought-after neighborhoods like Kahala, Diamond Head, Lanikai, Kailua and the North Shore.
Buyers will also move faster on unique properties like the Castle Estate, she said.
“It sold in about 12 months,” she said. “Normally, it takes a luxury property anywhere from 18 to 24 months to sell.”
Momentum for Oahu’s high-end market is running strong, said Anne Hogan Perry, vice president of Coldwell Banker Pacific Properties, the company that represented both sides of a July 2006 $24 million single-family home transaction — the largest ever transaction for Windward Oahu.
Activity is stronger for Oahu’s high-end single-family home market this year than last, Perry said.
During the first quarter of 2007, 117 homes sold for more than $1 million as compared with 135 during the same period of 2006, Perry said. However, sales exploded in the second quarter, she said.
“We saw 180 single-family homes that were $1 million and above change hands in the second quarter of 2007 as compared to 133 during the second quarter of 2006,” Perry said. “And, from July 1 to Aug. 1 (2007), we’ve had 50 homes above $1 million close — putting us eight homes ahead of that period last year.”
Barring a major catastrophe in Hawaii or the world, Perry said she expects high-end sales to finish out 2007 with a flourish and remain stable . Continued renovation and reinvestment in the market by developers like Eovino and private owners should continue to push market value higher, she said.