HONOLULU (HawaiiNewsNow) - Howard Hughes Corporation will begin accepting applications for buyers in a new Kakaako high-rise that's mostly moderately priced Saturday, sparking an important question: Is the luxury condo market softening?
Three Howard Hughes high-rise condos under construction in Ward Village are extremely high-end, with average apartment prices ranging anywhere from $1 million to more than $3 million. But a new project – Ke Kilohana – is much more reasonably priced.
The developer plans to build a 43-story apartment tower across the street from Sports Authority on Ward Avenue in Kakaako.
It will feature 375 apartments priced from $323,000 for one-bedroom units, $474,000 for two-bedrooms and three bedrooms from $522,000.
The developer said there's major interest in the applications that can be picked up from March 26 to April 3.
"It's been dramatic. We've seen a tremendous response," said Race Randle, vice president of development for Howard Hughes. "We've held a number of first-time home-buyer workshops since January and we've seen over 2,000 people come through those workshops to learn how to purchase a home in Ward Village, and now really is their chance."
Interested buyers can't have income that exceeds $85,150 for a single person, $97,300 for a couple and $122,000 for a family of four. Applications are due April 13 for a lottery that will be held April 15.
In January, the luxury condo Vida at 888 Ala Moana, planned by a different developer, announced it was scrapping the project because of a lack of sales and increased construction costs.
A real estate consultant said the luxury market could be softening a bit in Kaakako because of a global economic slowdown.
"It might be slowing down a little bit but overall, it's going to grow and grow and grow because that type of housing, that type of quality of ownership, people are always going to come, there's always a market for that," said Stephany Sofos, a real estate expert.
In a letter to shareholders on Wednesday, Howard Hughes CEO David Weinreb said "Demand for luxury condominiums in Honolulu, like any market, has limits. He noted the Vida project was canceled despite having more than 100 contracts with buyers.
"Unlike most competitors, Ward Village had more than one million square feet of income producing property that does not need to be taken out of operation until we have reached sufficient pre-sales for condominium construction," Weinreb said.
Randle said, "Ward Village has always been designed as a place that's really for everyone. And so we're bringing to market housing that's in the luxury range, also in the entry range so that everyone has the chance to live in the urban core."
Construction on the moderately priced Ke Kilohana project is scheduled to begin later this year.
There are buy-back restrictions on the apartments, Randle said.
"Because they're offered below market price, they've set some restrictions that really try to attempt to keep the homes in the reserved housing market as long as possible," Randle added.
For a two to five-year period, owners have to give the state the first chance to buy back the units if they want to sell them and after that they have to share a portion of the appreciated price with the state, he said.
For more information on Ke Kilohana, click here.