Coldwell Banker Realty's Doug Shanefield on the luxury condo market

Doug Shanefield is projects director for Coldwell Banker Realty, where he represents developers of new condominiums, “for whom we provide fully-staffed sales teams and guidance from design to closing,” he recently told Pacific Business News in an email.

Shanefield said he also works in general brokerage with clients in all price ranges, especially in the firm’s Global Luxury division, “which has a large market share of the high end on Oahu.”

He joined the company in Honolulu 29 years ago after studying architecture and working briefly in commercial real estate on the Mainland.

PBN spoke to Shanefield about current trends in the luxury condominium market, demand and inventory in the market, and more.

What trends are you currently seeing in the luxury condo market – where are you seeing these sales/where are people buying? Each luxury condominium building is very different, and the submarkets in Honolulu are behaving differently right now. The ultra-luxury niche is doing very well this year, with 16 closings over $5 [million] already — double the number closed in the same period of 2022, which was already considered a hot market.

Park Lane at Ala Moana Center has been notable for its consistently higher and higher resale prices, due to its private club atmosphere and the feeling of almost being in a single-family home, but with all the services. There were also excellent sales numbers at Ward Village’s ultra-luxury new-build, Kalae, that started taking reservations last year. Kalae is different in that it’s tall with Diamond Head views and also features some new architectural details and multiple garden and pool courtyards you can reserve for gatherings. In 2023, Alia in Kakaako also started sales very strong, with wide floor plans and usable lanai.

The mid-luxury niche is slower, however, due to a lot of inventory of recently completed buildings and, of course, interest rates.

What’s different about the current generation of luxury condo product, compared to previous generations of condominiums? A lot more greenery and those private amenity areas to reserve outside your apartment has been a trend. This is even translating to the mid-priced condominiums such as The Park on Keeaumoku, which has the space to build gardens typically seen in the luxury projects.

What’s the demand and inventory like in the luxury condo market? Ultra-luxury on the Diamond Head Gold Coast, Ala Moana, Kakaako and Turtle Bay is very much in demand, with low inventory and record sales prices. There is plenty of opportunity for buyers, however, in the “lower” $1.5 [million] to $4 [million] price range.

What has happened to the cost to develop such projects? Building costs keep going higher — after we thought they were already through the roof — so this limits supply in the high end.

We know that Kakaako and Ala Moana are popular neighborhoods for luxury condos – are there any up-and-coming neighborhoods luxury condo buyers should keep an eye on? Those are the areas in town with zoning allowing new high-rise construction, so at the moment they are the main places to look for brand new. There is also always Waikiki with some fairly new luxury hotel-condominums, and Ko Olina has one great beachfront hotel-condominium.

What external influences are currently affecting the luxury condo market in Hawaii? Exchange rates have discouraged purchases from Asia lately, but we always see cycles in that market and they always come back. Many Japanese owners who already have property in Hawaii are actually selling, to take advantage of rates, which is helping supply.

How are interest rates affecting this market? Interest rates are affecting the lower- and mid-range condominium markets, even up to the luxury level but not the ultra-luxury $5 [million-plus], which are generally all-cash [sales].

Is there anything else about Hawaii’s luxury condo market you’d like to add or think people should know about? People think the skyline is being flooded with luxury condominiums, but those are a small niche; much of the new construction today is finally more modestly-priced and even includes rental buildings. The few high-end condos being built also help pay for affordable housing, public infrastructure and government needs, believe it or not.