COVID19 UPDATE
Big Island

Kolea Real Estate Auction Results

Monday’s auction of an oceanfront home and a penthouse villa at Waikoloa Beach Resort was almost overshadowed by other sales activity at the Kolea beachfront gated community. Although I can’t reveal the prices at which the two properties sold, I can say that the auction left attendees shaking their heads and muttering, “somebody just got a screaming deal”…although perhaps more so for the home than for the condo.

As an indication, when the listing for the oceanfront home went from “active” to “contingent” yesterday, the price was reduced from $8,995,000 to $4,900,000. The fine print in the auction brochure suggests that, at this point, the auction is not a firm sale that will close in 30 days, but a short sale subject to lender approval. If approved, it would be the first successful short sale of a single family residence at Kolea. (There are two neighboring houses that actually went to foreclosure.)

Although this Kolea oceanfront home was auctioned, 5 Kolea homes are listed at competitive prices

At close of official registration last Friday, the Concierge Auction manager told me that he was “right where he wanted to be” in terms of the number of bidders registered for the house. He was silent as to the condo, so the only thing surprising about the email I received at 7:30 p.m. Sunday night to encourage last-minute registrations was the timing. It read, “Don’t Regret! Waikoloa Penthouse May Sell for 1/2 off.”

This is one of those properties that after the auction my clients will say, “If I only knew!!!” Currently listed for $2.295M. The email went on to say that “people had been assuming a high bid of $1.7 million and playing themselves out of the opportunity.” That was certainly the case with my clients who had been evaluating participation. The structure of the buyer’s premium in the bidder’s package encouraged that perception, as the premium was set at 10% of bid price, or a minimum of $175,000, whichever was cheaper. What that meant was if, for example, a buyer wanted to spend no more than last year’s comp of 2F at $1,500,000, their top bid would be $1,325,000.

But even that price began to seem steep with Kolea 10F having been released as an REO (foreclosure) during the auction registration period at $1,390,000. It appears the serious bidding was on this penthouse facing Kolea’s Beach Club. Word from the listing agent is that an offer was accepted by the bank yesterday, and that bidding had hit at least $1,600,000. A year ago, when I had a buyer making an offer on multiple penthouse units, the premium for west-ocean-facing versus beach-facing units seemed to be about half a million dollars…when both Kolea 2C and Kolea 10F close, we’ll know whether that premium held.

As I took prospective buyers to see all the available options last week, some concluded that they were indifferent between a “penthouse” which at Kolea means a 3rd floor, and a 2nd floor condo of the identical 3 bed, 3 bath 2,147 sq. ft. floor plan. Someone else’s buyer must have concluded the same thing, because on the day of the auction Kolea 12E, a vacant, unfurnished, never occupied unit offered for $1,595,000 also went into escrow. When the sale closes, it will give market watchers (and appraisers) another data point, a 2nd floor versus 3rd floor price premium, as this was also not a distress sale.

In a sense, the auctions were successful. Each of these properties had been on the market for over 3 years, and with a 30 day push they were sold. But on the other hand, the Kolea auctions do not appear to have been as successful in terms of prices realized for sellers as the Concierge Auctions at Kukio or Hualalai Resorts. I have a few ideas as to why (hindsight is always 20-20 and I’ve spent 48 hours thinking hard about this!), but that’s a long enough topic to deserve its own blog post. Watch this space!

Comments (26) Show CommentsHide Comments (Remember)

Cool. Add your comment...

Your email address will not be published. Required fields are marked *

Leave your opinion here. Please be nice. Your Email address will be kept private, this form is secure and we never spam you.

Pat Strausse, R

March 23, 2011

Beth, I was waiting for you to post an update on the auction.
That’s a staggering price drop on the house! What’s the lowest sale price for a Kolea home?

Pat Strausse, R

March 23, 2011

Beth, I was waiting for you to post an update on the auction.
That’s a staggering price drop on the house! What’s the lowest sale price for a Kolea home?

Rob Dalton

March 23, 2011

Beth,
Yeah, I was guessing the prices would be a bit low, but at least things are moving.
I will be interested to see if 10F finally closes. That villa has been in and out of escrow for years now it seems like.
I am guessing none of your buyers lucked out on any of these? I think 10F is one of the best villas there.

Rob Dalton

March 23, 2011

Beth,
Yeah, I was guessing the prices would be a bit low, but at least things are moving.
I will be interested to see if 10F finally closes. That villa has been in and out of escrow for years now it seems like.
I am guessing none of your buyers lucked out on any of these? I think 10F is one of the best villas there.

Beth Thoma Robinson, R(B)

March 23, 2011

@ Pat, there have only been three home sales at Kolea to date, and the lowest by just a hair was the 2009 sale at $6.5 million, although that doesn’t quite tell the whole picture because that is quite a bit more house than the one sold in 2006 for $6.6 MM..and which happens to be back on the market for about that price.
@Rob,it will be interesting, won’t it? Maybe you’ll get the rental management on 10F if the buyer plans to do vacation rentals. Thanks for checking in on my blog!

Beth Thoma Robinson, R(B)

March 23, 2011

@ Pat, there have only been three home sales at Kolea to date, and the lowest by just a hair was the 2009 sale at $6.5 million, although that doesn’t quite tell the whole picture because that is quite a bit more house than the one sold in 2006 for $6.6 MM..and which happens to be back on the market for about that price.
@Rob,it will be interesting, won’t it? Maybe you’ll get the rental management on 10F if the buyer plans to do vacation rentals. Thanks for checking in on my blog!

Rob Dalton

March 23, 2011

Yeah, I have been trying to get that one for close to five years now.
The banks really should consider setting up a system where they can rent them out while they are foreclosed on.

Rob Dalton

March 23, 2011

Yeah, I have been trying to get that one for close to five years now.
The banks really should consider setting up a system where they can rent them out while they are foreclosed on.

Katie Minkus, R(BIC)

March 25, 2011

What was fascinating to me about the auction was there were quite a lot of people there – people, as in, bidders and potential buyers – and yet the vast majority of the bidding, and both purchases, went to phone bidders. It was exactly the opposite at the last Kuki’o auction.

Katie Minkus, R(BIC)

March 25, 2011

What was fascinating to me about the auction was there were quite a lot of people there – people, as in, bidders and potential buyers – and yet the vast majority of the bidding, and both purchases, went to phone bidders. It was exactly the opposite at the last Kuki’o auction.

Pam Deery R(B) Big Island

March 26, 2011

I did overhear a representative say that it was doubtful if the bank would accept the “successful” bid price and it may be back on market as a short sale… unless the buyer can renegotiate the price with the lien holder. Why wouldn’t the bank have set a minimum price if that is to be the case?

Pam Deery R(B) Big Island

March 26, 2011

I did overhear a representative say that it was doubtful if the bank would accept the “successful” bid price and it may be back on market as a short sale… unless the buyer can renegotiate the price with the lien holder. Why wouldn’t the bank have set a minimum price if that is to be the case?

Beth Thoma Robinson R(B)

March 26, 2011

@ Pam, it does seem like the seller might have been better served with a minimum bid, doesn’t it? Of course, hindsight is always 20-20. As we know, the other factor with a short sale is always the terms the bank offers the seller, e.g. the “contribution”. The seller might find it smarter to continue to carry and hope for a better offer.

Beth Thoma Robinson R(B)

March 26, 2011

@ Pam, it does seem like the seller might have been better served with a minimum bid, doesn’t it? Of course, hindsight is always 20-20. As we know, the other factor with a short sale is always the terms the bank offers the seller, e.g. the “contribution”. The seller might find it smarter to continue to carry and hope for a better offer.

Kolea vs. Hualalai – Why the Auction Results Were Different « Hawaii Real Estate Market

April 5, 2011

[…] an oceanfront home at Kolea and a penthouse Kolea villa. As I reported in my earlier post about the auction results, the home immediately was noted as “contingent” in the MLS with a $4 million price […]

Kolea vs. Hualalai – Why the Auction Results Were Different « Hawaii Real Estate Market

April 5, 2011

[…] an oceanfront home at Kolea and a penthouse Kolea villa. As I reported in my earlier post about the auction results, the home immediately was noted as “contingent” in the MLS with a $4 million price […]

Beachfront Kolea Market Update – July, 2011 (Big Island) « Hawaii Real Estate Market

July 27, 2011

[…] high-profile auction of a beachfront home and a penthouse condo at Kolea on the Big Island in March left market watchers feeling a little […]

Beachfront Kolea Market Update – July, 2011 (Big Island) « Hawaii Real Estate Market

July 27, 2011

[…] high-profile auction of a beachfront home and a penthouse condo at Kolea on the Big Island in March left market watchers feeling a little […]

paul tasker

September 20, 2011

Well it did eventually sell, not at auction obviously and its very likely that the phone “bidders” were not real……

paul tasker

September 20, 2011

Well it did eventually sell, not at auction obviously and its very likely that the phone “bidders” were not real……

Beth Thoma Robinson R(B)

September 20, 2011

@ Paul, actually it was one of the phone bidders that was the successful purchaser of the house, despite the wrinkles. I was at the auction so I know the other phone bidder was real as well.

It sounds like you have some experience with this particular auction company if you are tracking so closely. I do want to affirm my opinion that auctions can and do work…but in this case it was not as successful as hoped for a variety of reasons.

Beth Thoma Robinson R(B)

September 20, 2011

@ Paul, actually it was one of the phone bidders that was the successful purchaser of the house, despite the wrinkles. I was at the auction so I know the other phone bidder was real as well.

It sounds like you have some experience with this particular auction company if you are tracking so closely. I do want to affirm my opinion that auctions can and do work…but in this case it was not as successful as hoped for a variety of reasons.

Katie Minkus, R(B)

September 21, 2011

@Paul – Just fyi, I have a client that was a phone bidder on the Hualalai Auction and an internet bidder on the Kolea auction. Real person, real bidder. I wonder if the Maui property sold without the auction?

Katie Minkus, R(B)

September 21, 2011

@Paul – Just fyi, I have a client that was a phone bidder on the Hualalai Auction and an internet bidder on the Kolea auction. Real person, real bidder. I wonder if the Maui property sold without the auction?

Only 2 Days Left to Register for Hualalai and Mauna Kea Hawaii Auctions | test1

March 15, 2013

[…] Auctions was in town to auction a home and a penthouse condo at beachfront Kolea. At the time, the auction was almost overshadowed by the unfortunate timing of the release of a penthouse condo as…. The end result was fewer buyers at the auction and someone walking away with what was perceived […]

Only 2 Days Left to Register for Hualalai and Mauna Kea Hawaii Auctions | test1

March 15, 2013

[…] Auctions was in town to auction a home and a penthouse condo at beachfront Kolea. At the time, the auction was almost overshadowed by the unfortunate timing of the release of a penthouse condo as…. The end result was fewer buyers at the auction and someone walking away with what was perceived […]

More Articles from Hawaii Life