 And Kina nicely with the life of the land is in its real estate on think tech Hawaii today I have some amazing agents from the big island. They are homes and chocolates of Keller Williams We have Kay Ali he and Rochelle Beck. So welcome guys. Thanks for joining us. Thank you Kina Thanks for having us. How cool. Yes, I'm excited. So why don't you go ahead and just tell us a little bit about Yourselves first You want to go ahead or show sure thing so I am My roots are here. I am a Military military youth been all over born in Frankfurt Germany and landed here. So my family is here I've got I've been on Hawaii Island for almost 30 years and a Hawaii real estate license for over 15 So loving loving what we do here and we live work and play on the big island. So All right, so Kay Ali tells your story Families from here. I was actually born in Honolulu and that's because dad was active military at the time So stationed there although from here Move to the mainland to the East Coast for a while Finished up my education in California and then moved back and by then I'd already been doing real estate and Development and sales came later with Rochelle, but I've always been an architecture construction a real estate in one way or another I'm great. Okay. So you guys are homes and chocolates. So can you tell us a little story about your team name? Yes, so I'm the chakaholic realtor chakaholic agent always seemed to have it nearby I've had the palette for the finer chocolates But more importantly, we are actually known for Gifting and sharing chocolates from our big island candies, which is a local cookie chocolates here here on island and they've been here since 1977 Yes, I go Yes, absolutely. So I go there, you know, pretty regularly support them We are also, you know supporters and sponsors of the began the chocolate festival that they have in Waikulua Wow Yeah, that is great. So I Brought you guys on because I want to learn more about Buying a home or land on the big island and we get a lot of clients calling as I as I was telling you a lot of the tech kids Are now thinking they can work remotely in Hawaii's where they want to be So I want to learn more and I'm sure our viewers want to learn more about how and what can you buy? On the big island. So first of all, let's talk about how would you buy something on the big island? How would they get started? Well, the process is pretty much the same as anywhere else we recommend understanding what your finance picture is either pre-qualification or cash Financing here is a little different. We do have lava hazard zones and other things that aren't on other parts of the state or in the rest of the country But yeah between having the right agent and understanding your finance picture, we can figure out what makes sense from there It's just really just conversations about what your lifestyle choices are and then how we can support that So what is the lava hazard zone? Our USGS you the United States Geological Service our survey They basically rate the different hazards and basically it's it's how recently it has a lava flow across this area So they look at monachea, Manaloa, Kilauea, and they've divided it up into nine different hazard zones Zones three through nine are what we call low risk and it's all relatively low risk And we classify that as low risk because banks will lend on it insurers will Underwrite so it's pretty straightforward in that sense when we get to lava zone two There are a few more restrictions and then when we get the lava zone one being the highest hazard zone There are even more restrictions So it's just a question of understanding that risk and then how to recover it so Basically in lava zone one and two are they able to get financing at all or is that got to be a straight cash purchase and is it Is it really something someone would want to buy? The want parts the easiest part to address because everyone's so different There are some people that want to be remote and they don't want to spend a lot of money on their land and and Lava zone one is the right place to do that With that being said it is harder to borrow and lava zones one and two There are lenders out there on lava zone one But for every ten lenders you have for lava zone three You might have three lenders for lava zone two and one lender for lava zone one So it's it's it shrinks your options dramatically the lower you go in those hazard zones Yeah, but it's a trade-off for some of the people like you said that like to be remote many of the Properties that are in that lava zone. They also have a mate. They're they're they're minutes from amazing views Minutes from breathtaking ocean You know nearby and if that is the lifestyle and what they're looking for It's very much worth it. You know because it's not the hustle the bustle There's no need to come into town on a regular basis and they have the ability to build what they want when you Yeah, the beauty of that is You're more connected to the land if you're on lava zone one And part of that's forced or part of that's decision and the first part is The infrastructure or the water the power is much less So if you want catchment water if you want an off-grid solar home Lava zone one is a great place to do it So can they get electric in lava zone one and two I mean is there option to run run electric if I mean I do promote solar But if they want to have electric is that even an option in some places it is. Yes our Utilities for example helco in this case white electric light company They're not running new utility lines in those areas, but decades ago and still in service are the existing lines Yeah So how how is the market for the lava zone ones and twos do you see a lot of people coming in and buying those up? Are there a lot available? there there are a lot available and part of that is from When those areas were developed around the time that Hawaii entered the union called 1958 1959 there was a lot of thought that There's now this tropical paradise that is recognized as the 50th state of the United States and Everyone's gonna want a home there because of the political stability. So we had Tens of thousands of lots open in that area, which is now Lava zone one or two mostly in lower Puna and We probably got 20 30,000 lots that are out there and maybe only a fourth of them were actually lived on So there's a lot of places out there where people it can go and you have that option. Yeah So I know we we just had Lava flow there recently like in the last, you know, few years. How did that? What happens to that land after I guess that's that was always a question of mine after the lava flows over it It's new land. But so how does all that work? Okay, so there are a couple ways that it works one people always asked about the coastline and our state Supreme Court Settled that debate years ago. They basically said any new land created belongs to the state of Hawaii If you have a land that is in place a parcel and it is covered with lava. It basically just means that Your elevation of your property is raised by whatever depth the lava is. It's still your property Where it changes though is access. So a lot of times the roads get covered and in recognition of that Our county real property tax office often zeroes out the accessible value on the property So if you had a property, which was once worth a hundred thousand dollars in the open market and you were paying $1,000 a year on it now. It's it could be technically worth nothing. Although there is always value in a land nothing on the Real estate market in terms of sales. So our county comes through and says, okay We're not going to charge you property taxes on the property now right When the lava flow happened many of the property owners noticed that their Their helpful bills that were mailed out to them were zeroed out They noticed that there were property tax office that came to them in the mail Even though they got the document it would that was the value was you know down to zero as well And so whether they lived here or not they they knew that there was no value based on the property tax for you know for that property owner and As Kevin you mentioned it is it is down to the access many people still have the ability to sell You know sell the land, but it's the access. That's the bigger the bigger question Yeah, the thing that happened with values and some of those areas was for example There's a fifty thousand dollar lot and it was worth that in April of 2018 and then in May of 2018 the lava flows in the Earthquakes started and they lasted about a year and so those prices went from about $50,000 that about $10,000 Quickly after that and as of the beginning of this year, I'd say probably 80% 85 90% of those values have been recouped with people buying back into the area Yeah So I guess that that leads into my next question were those people able to Rebuild or or sell and that others build on it. Is that something you can do? Yeah, so a lot of people if the homes work damaged for example, and it was just a question of access people are allowed back into the area If the homes were burned a lot of the rebuild came down to insurance. When is the insurance going to pay out and if it's Let's say directly in the path and it was literally covered with lava There's a lot of questions with the county whether the county would let them rebuild and what that would be But most of the people were either allowed to return to their homes return of the property or rebuild But because of how long it takes for permits and how long it takes for insurance payouts Most of those people that lost their homes have not rebuilt Okay, yeah, many people in the area to they you know if they weren't Required to evacuate there is a part of the subdivision where the lava kind of missed and many of them Chose to stay there until they were told to leave. So there are still a good amount of residents that still live at the top of the subdivision And and it's it's life as usual for them Because they are you know, they didn't have to up it was a risk They knew that they were taking but it was definitely something that they were willing to to wait out Not just the subdivision that was directly affected by the lava But some others that the lava would have flowed near and so yeah a lot of the residents You know, they knew that it was a possibility, but it was something that they were willing to To take that stuff until they needed to Yeah, so when we were we were visiting there we usually go on to year We did see they were redoing some of the roads. So are they planning on Putting access back or I mean, I know I'm sure yours your roads are like ours eventually, but yeah, so What is their plan with that? Do they plan on giving access back to these properties? I Think some of the properties in the foreseeable future will not get access. They concentrated on Reestablishing the major evacuation routes as a priority So a lot of those roads have been opened already and I think it's just a question of chipping away like little by little But the areas that were at the heart of what happened for example, Elania States because of the volume of lava in that area There won't be any reopening of some of those roads probably ever again. Just because the extent of damage and Walls of lava 30 40 feet high. We have cinder cones now. They're 50 60 hundred feet high and We'll just never get removed So, um, so during this lava flow, were you able to sell any houses? Yeah, houses were selling unfortunately probably not the way we would have liked them to there was quite a bit of panic Just like any other natural disaster. So some some savvy investors made out very well They were homes that were once 200,000 250,000 selling for 10 cents on the dollar Yeah We didn't participate in any of that just because we felt like it was kind of Taking advantage of a situation and we didn't think that that was the right thing to do So we kind of stayed out of that market for almost a year just just to let people heal let the emotions come back down to where they should have been Yeah, I think Rochelle kind of had a crazy buyer too. Didn't you do in that time? It's interesting, you know for one thing I had, you know, some people that were Interested in the area because they were also well aware that it was only the people that had property In the area were allowed into the space, right? And so You know same with when the love was flowing and didn't exactly flow You know actively it was only the people that had property there that were allowed to be that close Because they were near the property and this goes back, you know way before the recent lava flow, you know where we had Had side-by-side lots that were listed for 6,000 and there was clearly lava under them And it was you know disclose disclose and and again It was it was for the reason of having property in that subdivision So that they can come and go as they as they wanted to to capture the lava that they they wanted to you know Appreciate and it was only that was their main reason. They knew well aware that they couldn't identify the boundaries But yeah, that was their biggest Yeah, yeah, it was sad too because on the flip side we had we had some people that we recently sold property to in in certain subdivisions and and it was you know Although it was a second home It was still a home to them and so with that part was very sad to see you know The social media with a lava flow that had that had covered the subdivision in such a short period of time You know, there was a happy ending to this story We did help them, you know find something else in the end But yeah, that that was hard the clients that we helped find a home build a home in that subdivision I was a little challenging, but in the end there were there were good good endings to a lot of those stories So there are options on the big island that are not in lava flow areas, correct? Just because I know we may be sending you by or so What what other type of properties are available on the big island? Well by comparison just to put it in perspective during the 2018 2019 eruptions and lava flows It only affected about 5% of our landmass. So 95% was left unaffected people buying selling renting investing So that that was just going I mean quite you the big island is known for ranch land. It's known for for beaches We have 14,000 foot mountains So there there is a wide variety of different property types that people enjoy here and they're all available And most of that wasn't affected by our lava flows or our earthquakes Yep, our island is very diverse. We have the luxury of you know, having Luxury properties, but we also have you know, the commercial so you you've got somebody that wants to start their own business They're able to do that. You've got you know People that want to get away from the city you can buy, you know a one acre parcel But still be 20 minutes from town. You can still have pavement on a 15,000 Lot for only $10,000 There's so many options and it's so diverse that it isn't something that you can come over and maybe spend just the weekend to You know look and purchase it's it's really good to get your research and you know Kind of have an idea of what you want to do what your end result is how you want to you know Enjoy the property and as Kevin you mentioned earlier the lifestyle that you want to have what do you want to be minutes from? Because yes, you can be minutes from so much, you know, whether it's views walking parks And yet you can still have that community camaraderie which we love, you know in in this our ton of people You know, we can still drive to see others, you know over the hill and it takes about an hour and a half But we still have the ability to have such a diversity from the rainforest to the city And concerts and theater and so that's what makes it, you know, so enjoyable It's it's what we're able to do when we're not working. It's who we're able to hang with when we're not Doing real estate. Yeah. Yeah So so after the volcanoes and everything settled down then you had COVID-19 So talk about yes, it's kind of like Jumanji over there So let's talk about how is the COVID-19 changed your market or has it impacted your market on the big island? It has Some ways are predictable. Some were not I think they had a better understanding of it People like to conveniently think of our island as being East Hawaii and West Hawaii This the center of East white being Hilo the center of West Hawaii being Kona The West side being more tourist driven the East side being more local or government driven And so our economy is the two different economies got affected very differently We did see a slowdown. There's a lot of panic in the beginning West Hawaii unfortunate. I think they were they were hit a little harder because Without hotels being open without flights coming in We saw values drop considerably on the West side Little more modest drops on the East side But both have started to recover already and I think a lot of that has to do with the resilience of the people that are here It also I think has to do with the way the real estate industry is adapting Like like now zoom I mean zoom and other virtual services other ways to service clients That was a life-saving refer for everybody It allowed people to continue to to buy homes because not every home choice is is a luxury or second home choice There's still people that are moving to the islands for work or for family And so for those clients to be able to find homes and the agents to be able to provide the services There was a big pivot a big shift in there that happened in the real estate industry and I think it's a shift It's here to stay and and We're we're pretty close. We're maybe only off by about five percent on average Medium prices on our on our homes And part of that was just because you pre-COVID-19 we were at an all-time low on inventory And although we lost some buyers in the whole thing some of our sellers decided to wait it out So we're still a strong selling market Yeah So yeah, we're kind of seeing the same thing here in Oahu It seems like you know if it's come on lately the last two weeks We've had three hundred and ninety new listings, but we've opened three hundred and ninety two escrows island-wide So we we too are experiencing a very low inventory as I think people are waiting to list their homes So how what are your numbers like there do you? The stats and and over over time. I do this pretty consistent. Is it a good investment? You know I work with a lot of investors You are very excited last night to meet up that I was gonna have some big island real estate agents because some are interested in investing there So what is your long-term? Well, how has that been? We're still on a steady increase in property values whether it be Land whether it be condominium or whether it be single family now each of those fluctuates a little bit with the short-term market So for example single family home values are up up over this time last year Up over this time last month. So single family kind of drives our market East side. There's very little condominium So I think when we look at condominium and even vacant land. It's it's the inventory So we'll see like numbers are way down in terms of number of sales and that's just because there are not a lot of listings So when you look at the average Price the things are selling at they're still climbing. There are exceptions here and there like our strongest markets are Hilo town so that we the South Hilo district and the Pune district On the west side. We have North Kona and South Kohala The other areas They fluctuate a little more and it's hard to gauge them. So to put in perspective for that North Kohala You'll literally only get a handful of transactions Hamukua, which is so popular because of the rainbows and the waterfalls In a year you might get eight home sales there And so we don't we don't look at those average numbers at all because if one house sells for a lot more and a lot less It pulls the average way down. So we in some of those areas We kind of ignore the stats and look at what's going on around it because Hilo and Kona we have enough Enough volume enough number of sales to get two averages and what those averages mean so Some of the things that we've been seeing too is there've been an increase in the interest in land more so because of You know the desire to come to Hawaii to build what you'd like on acreage And now that the prices for vacant land are reasonable or affordable, you know, too many to start The other thing is the condos the condo sales even though there aren't that many condo sales in Hilo You're noticing condo sales going into escrow and Waikawa and Kona side Also because of the ability for an owner to move right into it when it closes, right? I mean we had the luxury of having a having property close and our you know the they address the quarantine by Moving into the home that had already closed the day before and so with the condo sales that has been You know something that we've seen recently where the condo sales have increased as well Because of you know the ability to quarantine right at your at your condo Yeah, I think one of the things that you touched on or so that that's really good right now because of the 2018 2019 Seismic activity we had people panicked and that and in those time periods people were not buying land So 2018 2019 vacant land values fell. So if you're looking for the investment, it's vacant land because Early 2020 pre-covid it had started to increase and outpace the value of condos and single family and then COVID-19 Kind of put a freeze on that. Let's call it the increase in value. So those are still the parts of our real estate that are undervalued and I Say, you know, you look at the land now because if it's going to continue to recover the way it was before That 2018 2019 memory is going to fade And so there's still opportunities to get land there because the land values were down compared to that time frame when the rest of everything is climbing So that does lead us in we actually do have a viewer question And they're asking about future of volcanic activity, which we do have to preface with we don't have a crystal ball But I'm sure there's there's talk there. And then what is the cost of the insurance? Protection, I know you do run a little different insurance there because of volcanic activity Yeah, so yeah, we can't tell what's gonna happen with the volcano We leave out to the USGS and the University of Hawaii to kind of make their forecasts In terms of insurance to put it in perspective So for example on a home in lava zone three if your homeowner's insurance policy, which includes hazards would cost you $150 a month and you buy the same house Located in lava zone two you can expect to pay about a 25 percent premium on that So, you know you instead of 150 you might be closer to 200 225, you know You should be any higher than that you can you're 200 would be the most It does it doesn't most people don't realize that and it's it's kind of one of those things where You're looking at financing look at the whole picture, which what's the actual out-of-pocket not worth the price of the house. Yeah No, so I have learned a ton. I mean there's so much more. I want to know of we need to do a whole another show about living off the grid Because I know I hear that phrase so often people want to move here by on the west side and live off the grid and I'm like why but Yeah, I think that could be a really interesting topic for those those people that do want to come over and and and do you know just that Which is totally possible there because you guys do have the water catchment I'm not sure we covered that if a lot of people understand water catchment So if you want to explain that really quick, we do have a couple minutes But I do Buyers coming from the mainland need to understand where you guys get your water on the big island Okay, so water catchment or cistern Basically, it's it's people look at you know the aerial photos and they say well look at all the swimming pools in the backyard white Well, it's it's a big bathtub. Basically. It's a tank. We catch the water from the roof. We filter it Run it through the house. So it's it's perfectly usable potable water It's just not coming through a pipe from a central treatment plant. That's really difference Yeah, in addition, you know for me it the catchment tanks they do have Frames that you can put a cover on it, you know, so it's not just you know catching the rainfall It does filter as Kelly said and there's there's water companies that can help you with the cleaning You know not just cleaning yourself or replacing, you know the items You know the nice thing is that you actually in control of the cleanliness how frequent it, you know, as far as the the catchment goes so Yeah, all right Great. I learned a ton. I know um, you know incoming buyers if you want to throw out your blurb really quick I'm getting the one minute notification. We're gonna get you No, no worries. No, well, you know with Kelly and Michelle back with Holmes and chocolate on the big island We're gonna help you with commercial lease residential sales We live and work on the big island. We're here to help you and we just love the opportunity So give us a call Holmes and chocolate.com. Yes, and I can vouch. They are amazing Yeah, you can reach out to me and I can connect you directly you can reach out to them directly But they definitely are our go-to anybody says big island. I say yeah, call the becks So, yeah, thanks guys. It was great to see you And I appreciate the opportunity. Yeah, this is awesome Okay, thank you that was a life of the land is in its real estate and I will see you guys in a couple weeks