Resort Homesites – Front Row vs. Second Row – A Big Island Paired Sales Analysis

Hawaii real estate appraisers are often asked to value residential properties that have spectacular ocean views.

Not a bad gig, I admit.

I recently did some appraisal work in Maniniowali, a luxury subdivision in the Kukio membership community on the Big Island of Hawaii.

I was valuing a front row lot, and this time, fortunately, there were several recent sales of similar properties to analyze.  But this is not always the case.  In high-end resort subdivisions, sales occur relatively infrequently–as such, quality comparables are sometimes hard to come by.

When appraising oceanfront or front-row properties, it is common to have no recent front-row sales in the subject subdivision.  But often times, there are timely sales of second row lots that can give an appraiser a better sense of values in the front row market.

Consider these two properties at Maniniowali:

Manini Paired Sale AerialImage Source: Bing Maps  (Click to Enlarge)
Manini Paired Sales Tax MapHawaii County Tax Map  (Click to Enlarge)

The aerial photo and tax map show a front row homesite, Lot 14, and a second row homesite, Lot 6.

For persons interested in real estate analysis, especially appraisers, these transactions are a stroke of analytical luck because they:

  • Closed just six days apart, in early May 2013
  • Both have ocean views
  • Are similar in size
  • Have the ability to purchase a membership in the same exclusive club (Kukio)

In short, a perfect opportunity for a pure paired sales analysis! (An appraiser geek term that speaks to the ability to test the value impact of a single, isolated variable)

The chart below shows a paired sales analysis for this set of comparables:

Manini paired saleSource: Chris Ponsar. MAI  (Click to Enlarge)

As shown, the second row lot at Maniniowali sold for approximately 27 cents on the dollar compared to its front row counterpart.  Said differently, Lot 14 sold for 3.6 times the price of Lot 6.

As an appraiser, I use relationships like this to help me in situations where I am challenged for data.  Obviously, this is only one pairing, and I’ll post similar paired sales of front row and second row lots as I come across them, but to the extent this relationship becomes a consistent trend, an appraiser may be able to check the reasonableness of their value conclusions for a front row lot against sale prices of second row lots, and vice-versa.

Comments and/or Questions?  Please leave them in the comments section below–I’d be happy to clarify or expand.

Aloha, Chris

About Chris Ponsar
I'm a commercial and high-end residential real estate appraiser in Hawaii. I'm passionate about appraisal and valuation issues in the same way some folks obsess over football, shopping, or bacon. I love this stuff.

2 Responses to Resort Homesites – Front Row vs. Second Row – A Big Island Paired Sales Analysis

  1. R C Lawrence says:

    Nice work, CP-MAI. In two dimensions it makes sense but you know the story beyond and above the black and white of it. Indeed the front row and the view plane and the angles all play into it. At least we can surmise the facts that up front is likely preferred as a starting point. I hope we find a similar story in improved sales as they come up but then the intangibles grow of course.

    • Chris Ponsar says:

      Thanks Bobb, I’m always fascinated by the price relationship between front row and second row lots. I’m going to post another pairing at Kaupulehu (KD) in a few days.

      What sort of ratios have you typically seen?

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