Homeowners in Hawaii are seeking to capitalize on demand from wealthy California technology executives by listing opulent estates, leading to a record number of $20 million-plus homes for sale.
The latest offering is a Waialea Bay property with a five-bedroom beach house, two guest cottages and 830 feet (250 meters) of ocean frontage on the Kohala Coast of the Big Island, listed this week for $24.5 million. It’s being sold by singer-songwriter Neil Young, who’s owned the estate since 1997, according to a person with knowledge of the matter.
The property is Hawaii’s 23rd on the market for at least $20 million, the most ever at one time, said Matt Beall, co-owner of Hawaii Life Real Estate Brokers.
“It’s certainly a higher number of very high-end sales in recent times than at any other time in Hawaii,” he said in a telephone interview while heading to a flight to meet with clients in San Francisco. Beall, whose firm is handling the Waialea Bay listing, declined to identify the estate’s owner.
Just as the Hamptons have long been a retreat for Wall Street executives, Hawaii is becoming a favored playground of Northern California’s wealthy digerati, though they have to get on a plane rather than drive a couple of hours. Property prices in the Aloha State have soared past the heights of the last housing boom as buyers seek island getaways.
Young, whose songs include “Southern Man” and “Heart of Gold,” described the state’s Big Island as having “magical healing” in his 2012 book, “Waging Heavy Peace: A Hippie Dream.”
“Living in Hawaii, with the horizon of the ocean meeting the sky, is soothing,” he wrote. “I love this life.”
Rick Gershon, a spokesman for Young at Warner Bros. Records, didn’t respond to telephone and e-mail messages seeking comment on the estate sale.
Hawaii is one of 15 U.S. states, along with the District of Columbia, where prices for all residential properties reached a record in June, CoreLogic Inc. said in its latest report. Single-family home prices in the state were up 6.1 percent from a year earlier, according to the research firm.
Across the U.S., demand for second homes is rebounding from Cape Cod in Massachusetts to Lake Tahoe, California. Buyers returned to the housing market as surging stock prices, job growth and low interest rates boosted purchasing power. U.S. vacation-property sales jumped 57 percent last year to an estimated 1.13 million, a record in data going back to 2003, according to the National Association of Realtors.
In Hawaii, the surge in property prices has reached into the luxury market. Actor Will Smith and his wife, Jada Pinkett Smith, sold their home on Kauai’s North Shore in 2011 for $20 million to a trust linked to Russian heiress Ekaterina Rybolovleva. Last month, it was listed for $29.5 million. The 28-acre (11-hectare) property boasts an ocean view; a gym, pool and adjoining hot tub; and an orchard with avocado, grapefruit, star fruit, banana and orange trees, according to the listing.
While celebrities like Smith and Young have long used Hawaii as a retreat, some of the biggest Hawaiian purchases are now being made by technology-industry stars. In 2012, Larry Ellison, the billionaire founder of Redwood City, California-based Oracle Corp., bought 98 percent of Lanai, Hawaii’s sixth-largest island. Last year, Mark Zuckerberg, cofounder and chief executive officer of Menlo Park, California-based Facebook Inc., acquired two adjacent Kauai parcels totaling more than 700 acres for more than $100 million.
“There’s no question, Northern and Southern California are the top sources of high-end buyers in the Hawaiian Islands,” said Chris Fair, president of Resonance Consultancy, which produces reports on travel and leisure spending by affluent Americans.
The listing time for luxury properties has fallen on all of Hawaii’s main islands except Maui, according to Hawaii Life’s Beall. On the Big Island, homes stay on the market for an average of 136 days, down from 236 last year, and on Kauai, homes take 121 days to find a buyer, less than half of last year’s average, data from the brokerage show.
“The next migration of wealth and development is now moving to Kauai,” Fair said.
Completing a sale in the luxury market, defined by Hawaii Life as transactions of more than $3 million, isn’t as simple as holding an open house. Buyers may have to fly in on private planes, bringing their families and staffs. Deals can involve multiple teams of lawyers and extensive non-disclosure agreements to protect buyers’ and sellers’ privacy, Beall said. Many homes for sale are never listed on the multiple-listing service, which is used by real estate agents searching for properties.
“These are very high-functioning, hyper-effective people,” Beall said of his clients. “Most of the time their wealth is earned, not inherited.”
Young’s estate, modest compared with Ellison’s and Zuckerberg’s properties at about 3 acres, might attract a buyer for its Kohala Coast location. Snorkeling is available in a bay on the property’s south side, and the home is near a well-known surf break, according to the Hawaii Life listing, which notes that the estate is “celebrity-owned.”
“It has white sand beaches and almost guaranteed sun,” Beall said. “It’s probably the nicest beach on the island, and I don’t say that lightly. It’s where everyone wants to be.”