The Return of Hawaii's Real Estate Lottery

Lucky break? Soaring home prices, tight inventory, strong demand have brought back real estate lotteries to Oahu.



Published:

Lucky break? Soaring home prices, tight inventory, strong demand have brought back real estate lotteries to Oahu.


A rendering of 801 South Street.

Photo: Courtesy Downtown Capital LLC
 

Hawaii is one of two states with no forms of legalized gambling, the other state being Utah. The Aloha State has no casinos, poker rooms, ponies or even scratch tickets. 

We do, however, have lotteries—real estate lotteries that is.

With real estate prices reaching record highs, tight inventory and strong demand, real estate lotteries have returned on Oahu. Here are some of the latest examples:

  • DR Horton is accepting lottery applications until March 28 for 20 units at its Ka Malanai project in Kailua. This is the builder’s second public lottery for the condo project. Prices start at $520,155 for a one bedroom, $776,575 for a two bedroom and $875,290 for a three bedroom.
     
  • Downtown Capital LLC is holding two lotteries for its second tower in Kakaako at 801 South St. Prices range in the affordable-housing complex are from $352,000 to $699,000. The deadline for the first lottery is March 28.
     
  • Castle and Cooke’s lottery for its first phase of Hoonani in Ewa Villages began in December. Single-family homes ranged from $450,000 to $650,000 in the first phase.
     

So, why lotteries?

On one hand, lotteries can be a fair way to give the greatest number of people a chance to secure a property without waiting in line.

On the other hand, developers can use it as a marketing tactic to build hype, suggest overwhelming demand and make buyers feel they were lucky enough to have “won” something if selected. The “prize” is usually the right to buy into the project based on the developer’s terms and prices with no room to negotiate.

If you are considering entering Oahu’s real estate lottery bonanza, here are a few tips:

  • See if you qualify. Some units have owner-occupancy requirements and income restrictions.
     
  • Consult with a professional. Get your real estate agent’s opinion on the neighborhood, pricing and the purchase contract.
     
  • Know all the timeframes. Know when the lottery is being held, when the deposits are due, when the last day is to cancel is without forfeiting any money and when construction will be completed.
     
  • Keep in mind mortgage rates are rising. The mortgage rates you see today will most likely not be around when the project is built a year or two from now. Changing rates can affect your monthly payments and your lender may need to qualify you at a higher projected rate.
     
  • Read the fine print, house rules, condo documents and everything else. Some of these projects have unique terms, so it’s important to be aware of them.
     
  • Know what you’re buying. Find out where the parking stall is, what the maintenance fee includes or doesn’t include as well as the ins and outs of the contract.


Good luck and happy house hunting!

Edit ModuleShow Tags
Edit ModuleShow Tags Edit Module

Subscribe to Honolulu

Edit ModuleEdit ModuleShow Tags Edit ModuleShow Tags
Edit ModuleShow Tags