Recently I’ve been getting question about and been having conversations regarding buying new construction. It’s mainly because of a new subdivision being built in Central Oahu called Koa Ridge. I wanted to discuss 3 opinions that are prevalent with buying new construction and also discuss their counter arguments.
So, the first argument I hear is that potential buyers complain about how EXPENSIVE the prices are. They are probably thinking about the resale market where in the same neighborhood you can have 2 houses with identical square footage and lot size but have a big disparity in price. And that can be for multiple reasons, the biggest reason being the relative condition of each home. One could have been renovated a few years ago and the other one is in original condition needing major updating and repair. The later situation offers a great opportunity for buyers to build their own sweat equity into their home with DIY improvements. You need to remember that this is not the case with new construction. You are getting brand new EVERYTHING. With that said, with new construction you will have minimal repair and maintenance costs in the first 5-10 years.
One could argue since this is a new neighborhood, you may be overpaying for this new construction. I would say in this case the market will take care of itself. The developers actually put a lot of research into making sure they are pricing their properties at market. And anyways If the houses are overpriced, they simply won’t sell and the developer will have to offer concessions if it sits too long. In the case of this first phase of Koa Ridge, my hunch is the units are not overpriced. In last month’s lottery, there were over 150 applications submitted for this first phase for just 19 homes being built. That gives me the impression that there is enough of a market and interest in these houses that start at $885,000. Remember this is Hawaii and that is the price of paradise. Besides we already have a housing shortage.
Another argument or concern is regarding the quality and the design of the home build as well as the design of the neighborhood itself. Some prospective buyers are wary of buying a home without getting to touch and feel the actual building or even a model home to give them a good idea of the quality, workmanship, and materials being used for their home. They also are wondering what the rest of the neighborhood is going to look like. This is a very legitimate concern. If you’re looking into new construction, have your realtor set up an appointment with the developer’s sales office to see if they have model homes built to walk-through, sketches and renderings to view, or even three-dimensional models of the homes and neighborhoods to give you a better idea if this is a place you want to call home. For Koa Ridge, model homes aren’t expected to be ready until next year. However, there are blueprints of the models as well as renderings of the homes and neighborhoods. Also, the developer, Castle and Cooke has a great track record and has even won national recognition for building Mililani Town which is actually the first master planned community ever built on Oahu. Mililani Mauka, also by Castle & Cooke, is one of the most sought-after communities to live in by the island’s west side residents. If you want more information about the Mililani communities, check out my articles at realestateofhawaii.com/Mililani or realestateofhawaii.com/Mililanimauka.
Some buyers looking at new construction, especially when the entire neighborhood is new, and can’t get over the fact that they won’t have any neighbors, stores, or gas stations for at least the first few years in their neighborhood while everything is coming up. Again, very legitimate concerns. It’s kind of funny because I have clients, friends and family who complain about their neighbors, how they are too close, messy, smelly, etc. This is your chance to NOT have neighbors for a while, it’s actually a blessing in disguise, right? And in terms of no shops, stores gas stations, I think the buyers need to look long term, past the next few years. When the retailers do come in, they will probably some pretty top-notch stores and shops for you. And then your neighborhood may become the hub and NOT the sub burb, saw what I did there.
And in the case of Koa Ridge, the demographics of the inhabitants here are probably going to command some really great retail vendors. I mean these first homes in the high 800,000s to over a Million dollars. The caliber of stores is going to need to match the clientele, right??? Well only time will tell. Let’s make a date to watch this video again on August 10, 2025 (5 years from the release of this blog post) and see how Koa Ridge turns out, should be fun.
So, there you have it, a few arguments for and against buying new construction with the new Koa Ridge neighborhood as an example. If you have any interest in buying newly built construction like Koa Ridge, please reach out to me.
