Most weekday mornings I can be found at my desk in the beautiful Mauna Kea Resort working away.  When hotel guests stop by to say hello and talk real estate, they are typically surprised to find two bedroom condos, some on the fairway, all with ocean views, well under $1M.  Today the asking prices for those Kumulani condos start at $550,000.  Located within Mauna Kea Resort, Kumulani is an amazing value for tennis, golf and beach buffs.

Another neighborhood with ocean views available at respectable prices is Sunset Ridge in Waikoloa Village. Being outside the resort and further away from the beach is the downside, but the upside is recently built, single family, three bedroom homes with ocean views, and homeowner association dues of just $500 per year.  Today these homes are priced at $425-650K.

Waikoloa Village is not to be confused with Waikoloa Beach Resort.  The resort is located about ten minutes down the hill from the Village entrance.  Waikoloa Beach Resort has a wide selection of lovely condominiums, but no single family homes.  Today the Waikoloa Beach Resort condos are priced $275K to $2.75M.

Included in the annual Waikoloa Village homeowner association dues are discounted green fees on the neighborhood golf course, use of tennis courts, and swimming pool.  At the association website read the Village newsletter and official association documents; learn about the Golf Club, the long list of Village social and charitable organizations, and the businesses that serve the Village.

Yes, some Sunset Ridge homes were built in the 1990s, and their asking prices are lower.  If an ocean view is what you are looking for, be sure to first consider the homes built in 2007 and 2011.  “Contact me” and ask for a specific list of the newer built Sunset Ridge homes.

January through October 2011 Kohala Coast condo sales are up 36.6% and prices are down 7.7% over January through October 2010.

Third quarter 2011 Kohala Coast condo sales are up 25.5% and prices are down 9.1% over third quarter 2010.*

October 2011 Kohala Coast condo  sales are down 36.4% and prices are down 29.8% over October 2010.

January through October 2011 Kona condo sales are up 9.4% and prices are down 21.8% over January through October 2010.

Third quarter 2011 Kona condo sales are up 5.5% and prices are down 9.1% over third quarter 2010.*

October 2011 Kona condo  sales are up 11.8% and prices are down 8.5% over January through October 2010.

Of the six groups above, only one deviates from the continuing trend of sales up and prices down: October 2011 Kohala Coast unit sales.  I would disregard that oddity until fourth quarter numbers are in.

For recent West Hawaii economic forecast information, see West Hawaii Today reporter Erin Miller’s summary of local economist Paul Brewbaker’s October 28 talk.

*(Third quarter numbers for both Kona and Kohala Coast condos were stated incorrectly in the mailing sent 11/21/11.  The numbers here are correct.)

So I expanded my research to include all West Hawaii single family and condo sales from South Kona to North Kohala, January through September 2011 vs 2010. Again, my research still found sales for improved residential higher this year than last: 999 to 859. The 2011 January-September median sales price was $323,000 compared to $344,000 last year.

Next I compared just the month of September 2011 vs 2010. Sales for improved residential were about the same this year and last for September: 95 to 94. The median sales price for West Hawaii homes during this period was also about the same: $338,000 in 2011 vs $335,000 in 2010.

Last, I compared the third quarter 2011 vs 2010. Sales for improved residential were higher this year for the third quarter: 317 to 274. The median sales price for West Hawaii homes during this period was lower: $325,000 in 2011 vs $335,000 in 2010.

Today’s West Hawaii Today headline “Home Sales Dip” was wrong. Yes prices are still slipping but buyers are clearly taking this opportunity to buy low. Unit sales are up.

Not only the wealthy are actively buying West Hawaii real estate

What got me digging into these records were recent news reports that Mercedes Benz unit sales in the United States recently broke a record; an Italian handbag retailer experienced difficulty keeping its $1,000+ handbags on the shelves; and the top two luxury purchase types by wealthy consumers were either a $1,000+ case of wine or piece of jewelry.

In the Luxury Institute survey cited, the sample demographic was 50% male and 50 % female with a median age of 52, a $233,000 median income, and a $1.5M net worth.  The large majority was married and more than half were empty nesters.  Almost all possessed at least a Bachelor’s degree and were born in the US.  More than half were employed full time and over 20% were self-employed or the company owner.

What was the value of the most recent real property purchase by these wealthy consumers?  About 66% paid less than $500,000, while the mean price paid was $984,000.  To recap, one quarter of the top 9% of Americans are buying real estate, and a significant number of those properties are second homes.

Regardless of price band, how are West Hawaii single family and condo sales doing?  As you can see from the charts below, West Hawaii 2011 median sales prices are well below $500,000.  The category with the least amount of price slippage is South Kohala single family homes.  This area has Waikoloa Village and wet side Waimea, both affordable areas for local families.  Significantly more families bought in 2011 vs 2010.

The category with the second least amount of sales price slippage is South Kohala condos.  This is second home territory.  South Kohala 2011 condo unit sales are significantly up, even more so than single family homes.  Vacationers are not missing this opportunity to buy low.

January through September 2011 vs 2010

In 2010 the South Kohala real estate market sputtered back to life in fits and starts.  While unit sales for all real estate rose and fell each quarter, condominium unit sales have been steadily increasing the last three quarters.  Yes, Kohala Coast condo sales prices continue to slip, but just barely.  Sooner or later the upward trending unit sales will put a stop to that.  I predict, and I think Mr Yun would agree, prices will stop slipping before the end of the year.  Why?

* More jobs
* Rising stock market wealth
* Rising apartment rents
* A large selection of affordable homes
* Justifiable home values
* Investors looking to hedge against potential inflation
* Foreigners buying cheap property

The Big Island agrees with everything on Mr Yun’s list, except more jobs.  The stock market has returned to values higher than before the fall.  Rents are climbing because there just isn’t much of a selection anymore.  Real estate prices have been decreasing for quite some time, and the appraisers are easily justifying sales prices.  Investors in the form of second home buyers are definitely back, and Canadians are snapping deals up left and right.  As you might have guessed, the Chinese are coming, but they’ll hit Oahu, not the Big Island.

So what are you waiting for?  Interest rates to go up?  If you would like a vacation home on the Big Island, start looking now.  Ask about my automated new listing email service.  Properties you would like to learn about will hit your inbox the day they hit the market.  It’s a complimentary service.  Just ask!

1. $640,000; 2/2; Kumulani condo #B3; located on golf course with ocean view
2. $909,500; 3/2; Wai’ula’ula condo #M202; located on golf course with ocean and Maui views
3. $1,300,000; 3/3; Moani Heights residence #8; located on golf course with ocean and Maui view
4. $1,525,000; 3/3; Moani Height residence #9; located on golf course with ocean and Maui view
5. $2,600,000; 4/3.5; Kauna’oa condo #1A; ocean view
6. $2,400,000; Kauna’oa lot #6; located on golf course with ocean view
7. $1,500,000; Mauna Kea Fairways North lot #12; located on golf course with ocean view
8. $2,000,000; Mauna Kea Fairways South residence #3; structure is either a tear down or will be a demolition remodel with an outstanding ocean view
9. $1,350,000; 2/2.5; The Villas at Mauna Kea condo #37; original 1987 condition with ocean view

Long time resort visitors are recognizing the attractive current property values within the resort. If you do not need an ocean view, the deals can be even better at the Mauna Lani and Waikoloa Beach Resorts.

The Kumulani at Mauna Kea #E2 is still available as of this writing for $685,000.  Yes, it has a very nice ocean view!  Take a look:

By today the ocean has calmed down, and families are again splashing in the blue waters of Mauna Kea Beach Hotel’s Kauna’oa Beach.

The two South Kohala neighborhoods which sold the most units in 2010 were Waikoloa Beach Villas, and Hali’i Kai. Both continue to shed developer (brand new) units which have been sitting on the market since the market collapsed September 2008. The Waikoloa Beach Villas are walking distance to most all of the shops in Waikoloa Village, and an easy bike ride to the beach. The median sale price at the Beach Villas last year was $342,000. Hali’i Kai has a very nice pool club located at the ocean’s edge. The club includes a small poolside restaurant. The median sale price at Hali’i Kai last year was $580,000. This suprised me. I think the better than expected median price was due to the popularity of the pool club.

The two North Kona neighborhoods which sold the most units in 2010 were Ali’i Lani and Ali’i Cove. Ali’i Lani was built in 1997. It is a large neighborhood with nice exterior architecture and a couple of spacious community pools. The $163,000 median sales price was below my expectation. That’s a good value! Vacation rentals are not allowed at Ali’i Lani. That and the sheer number available for sale, many distressed, explain the sales price.

Regarding median sale prices for all condos, South Kohala prices are trending slightly downward with the median price at $381,000 last year. North Kona condo sale prices are also trending slightly downward. The median price for 2010 was $215,000 in Kona.

For more information about condos on the Big Island, just ask me.

If you think a homeowners insurance policy will cover you when you turn your current home into a rental property or buy an investment property, think again.

Rental properties require their own type of coverage–landlord insurance, which is different than the homeowners policy you buy when you live in a house yourself. Landlord insurance protects you against losses from fire, lighting, falling trees, wind and hail, water damage, and injury to your tenants and their guests.

But it doesn’t cover the renters’ household goods. So encourage tenants to buy a renters policy to cover their stuff. You can even include a clause in your lease saying they have to buy renters insurance, so everyone is clear about what’s insured and what’s not.

Landlord insurance is expensive. You’ll pay 15% to 20% more for a landlord insurance policy than you will for a homeowners policy on the same house–and even more if you offer short-term rentals. Start your policy shopping by calling the company that sold you your homeowners insurance, then check with an independent insurance agent selling commercial and business policies. Ask how you can get discounts if you have fire prevention devices, burglar alarms, or multiple properties.

What a landlord insurance policy probably will cover:

• Lightning, windstorm, hail, explosion, riot and civil commotion, smoke, falling objects, snow, ice, sleet, vandalism, sonic boom, sprinkler leakage, frozen pipes, water damage, burglary, volcanoes, and sinkholes.

• Things that belong to you that stay at the property, like appliances, furniture, or lawn care equipment. Keep an inventory of what’s on site.

• Outbuildings, like sheds or garages, although this coverage will have its own limit (probably 10% of the overall insurance policy amount).

• Costs to defend yourself against lawsuits filed by tenants or guests, as well as the costs awarded if you lose the case. Some policies cover medical bills for injuries; some don’t.

• Lost rental income if the property is damaged and you can’t rent it.

What a landlord insurance policy probably won’t cover:

• The tenants’ belongings.

• Your rental property if it’s vacant for more than 30 days. Seek an exemption in advance from your landlord insurance company as soon as you know the property is going to be vacant.

• War and nuclear, biological, chemical, or radiological attacks.

Optional coverage you might want to buy:

• Flood

• Earthquake

• Vandalism (if the policy you buy excludes it)

• Pool and tennis court insurance

• Liability for personal injury, wrongful eviction, wrongful entry, libel, and slander

Don’t forget liability coverage which covers you in the event you lose a big court case filed by an injured tenant. Consider an umbrella insurance policy that gives you liability protection for $1 million to $5 million or more if you have a lot of assets to protect.

Don’t file a claim unless you absolutely have to. There’s a limit to how many claims you can file before insurance companies start charging you more or canceling your policies. Claims can quickly add up as you buy more rental properties.

One time you always want to file a claim is when someone says they’ve been injured on your property. One claim you’ll want to avoid filing: water damage for less than $10,000. Worries about mold growing in water-damaged properties will lead some insurers to immediately cancel your insurance policy.

Reprinted with permission from HouseLogic.com