When Covid-19 began spreading in early 2020, the erroneous assumption among real estate experts suggested luxury market sales would slow as shoppers held their money until they saw how the pandemic would progress. Instead, purchasing has boomed to the point that top-shelf communities and destinations have few available listings to peruse.
As a result, many buyers who hesitated to jump into the hot second-home market of the last two years must alter their expectations and search through whatever homes are left, regardless of size or type. Sensing the urgency, many developers are turning over turnkey concepts to boost offerings—serving up high-end, furnished, pre-decorated homes allowing the buyer to pay, take the keys and enjoy.
By way of case studies, the turnkey push has found its way to Hawaii, Grenada and California with separate developments and price points, but the “move in now” theme stays the same.
The residential community at the Four Seasons Hualalai on the big island of Hawaii, for example, reports no sales inventory among its more than 350 homes for the first time in 25 years. According to Rob Kildow, director of sales and principal Broker for Hualalai Realty, the site saw a 20% jump in demand during the pandemic—creating a local market that’s all turnkey for now.
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“When our residents sell their home, a buyer from a smaller property here buys it and moves into the bigger space,” Mr. Kildow said. “They leave the smaller home fully furnished while they create their new residence. I then have a three-page waiting list of buyers interested in that smaller property.”
Mr. Kildow explained that the turnkey residences at Hualalai routinely sell within days at or above asking price. Residents enjoy the natural beauty of the Kona coast with access to the Four Seasons’s elite amenities, including the Jack Nicklaus-designed main resort golf course and a second private course tucked in among the community’s homes.
When the pandemic slowed bookings during Hawaii’s aggressive testing and quarantine edicts, the Four Seasons Hualalai used the time to complete a $100 million renovation on the resort side to upgrade all guest rooms, complete two new villas and add a 1.8 million-gallon swimmable aquarium.
“There’s a clear trend toward single-family, ‘want it now’ homes,” Mr. Kildow added. “Psychology always provides different sales drivers, and the pandemic pushed buyers on the fence to buy—in some cases ‘sight unseen.’”
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Kandace Douglas, real estate sales and marketing director at Silversands Villas on the island of Grenada, cited the pandemic-driven challenges of construction as a driving force in buyers looking to grab turnkey spaces as they hit the market.
“Given the low inventory of furniture and materials, buyers want something fully turnkey and ready to be enjoyed,” Ms. Douglas said.
Strongly embracing the luxury “move in now” mentality, Silversands Villas sells fully furnished homes featuring original artworks carefully curated by CEO and Ora Developers Chairman Naguib Sawiris. The art in question stays with the home, so each property’s collection will be owned by future residents of the villas, adding investment value.
The Silversands Villas offer an additional advantage many ready-made housing developments can’t manage—a sort of turnkey citizenship program. Grenada offers Citizen by Investment by which home buyers and their families can apply for citizenship after making a minimum investment of $220,000. Once approved after a vetting process, those buyers are soon able to receive a Grenadian passport granting them visa-free access to more than 140 countries.
At Rancho Palos Verdes along the Southern California coast, the resort real estate development of Terranea covers 102 acres, offering nine dining spots, a 50,000-square-foot spa and a nine-hole golf course. Resort President Terri A. Haack reports a familiar increase in buyer interest.
“The demand for Terranea properties cannot be satisfied as there is only one available property currently for sale,” Ms. Haack said. “Since selling out all of the available for-sale properties at Terranea, owners have shown little interest in selling their property.”
Terranea buyers cannot use their space at the resort as a primary residence due to California laws, so they opt for the simplicity of buying into preexisting, “ready to enjoy” spaces.
“Turnkey homes offer peace of mind and instant enjoyment —while avoiding construction costs and labor force issues presented by today’s economy,” Ms. Haack added. “Time is priceless.”
Kathleen Benoit, real estate agent for Russ Lyon/Sotheby’s at the massive Desert Mountain community in Scottsdale, insists buyers looking to get into that golf community value acquiring a second home easily over hanging onto a long list of potential accoutrement options.
“It’s all about instant gratification, simplicity and getting to the end game of a resort home that one can just walk into to begin enjoying that lifestyle,” Ms. Benoit said. “Whether or not the buyers like the furniture, the convenience of enjoying the home immediately outweighs whether they will end up replacing items in the home.”
Back in Hawaii on the quiet island of Kauai, the 1,010-acre real estate project of Kukui’ula stands only 25% into its overall build and is already leaning into the single family, turnkey trend.
Kukui’ula Development president Richard Albrecht explained their buyers are eager to purchase longer-term residences where they can live for extended periods throughout the year. Rather than buy an open lot and work through the design and construction process (which Kukui’ula also offers, if desired), many buyers come to Mr. Albrecht looking for easy access into a growing community.
“Our buyers are looking for second homes, not vacation homes,” Mr. Albrecht said. “We’re currently designing our next phase, including carefree, furnished residences. We built four of these turnkey homes in December 2019 for presale, and they all sold within hours.”
Kukui’ula current construction includes 14 new homes targeted to sell in the $4.5 million to $6 million range. A collection of 45 smaller homes now underway are projected to sell around $3 million to $4 million.
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Kukui’ula life revolves around the community’s 21,000-square-foot-clubhouse, the home for the Umeke Kitchen restaurant and the Huaka’i Outfitters that equips residents for a variety of ocean activities. Residents also come to this Kauai haven to enjoy the 18-hole, Tom Weiskopf-designed Kukui’ula Golf Course.
Mr. Albrecht believes half the people making up the luxury real estate market never wanted to go through the design and building even before the pandemic. Those buyers come to his Kukui’ula team willing to trade choices of household elements for convenience.
“We built turnkey condos on the property during our earlier stages,” he said. “At this time, we have no intention of building more condos. We’re looking to single-family homes when we offer that turnkey option. Houses last on the market here for different amounts of times based on price point, but none of our turnkey properties linger very long.”
Read More:Turnkey Is King for Those With a ‘Move-in-Now’ Mentality
2022-05-08 11:15:00
