Kolea or Kukio – Big Island Auction Countdown Continues

I have to admit it crossed my mind as the tsunami sirens blared, “Yikes, if the waves are big enough, there won’t be any house auction at Kolea next week!” Luckily, Waikoloa Beach Resort was spared any serious damage. Clients of mine who own a second floor condo at Kolea went to bed early and reported in the morning that they’d slept through the whole thing.

Our Hawaii Sellers Disclosure includes the question, “Is the property located in a Tsunami Evacuation Zone?” While all of Kolea, the two hotels, and Halii Kai within Waikoloa are close enough to the ocean to be in the tsunami evacuation zone, insurers actually look more closely at the flood maps. (It is our standard of practice at Hawaii Life to include a flood zone report with every listing agreement or offer.)

Here is the flood hazard map for Kolea, which shows why I was concerned about the house on Lot 7, even though the condo owners slept happily through the events:

Lot 7 (MLS# 237963) is the house to be sold in a live no-minimum auction on March 21st, 2011

Although many clients express the desire to live on the oceanfront, or walking distance from a beach, living that close to the ocean in Hawai’i comes with a price. Higher insurance costs are reflected also in higher dues within these communities. The public has access to all shoreline areas, so as owner of an oceanfront property, you can expect people to be hiking or fishing in front of your home.

And Mother Nature is sometimes not gentle, so the seaward boundary of your property may move inward over time. Currently, the Four Seasons Hualalai and the Kona Village Resort are closed while repairs are made, and perhaps we should not be so surprised. After all, the fishing village of Ka’upulehu was destroyed in the 1946 tsunami!

That’s why, even at a resort like Kukio or Hualalai, some owners prefer to leave the front row to others and enjoy the sweeping views a bit of higher elevation affords. Which brings me back to the Kolea auction.

When responding to prospective buyers who have read my previous posts about the auction and the oceanfront homes at Kolea, I recommend they have their agent present them with alternatives, so they can decide whether the house on Lot 7 best fits their lifestyle, and at what price it would be the best choice for them. Not every alternative I’d show would necessarily be oceanfront, beachfront, or “front row.”

For example, here’s a gorgeous house at Kukio that had a $1 million price reduction last week. At its current asking price of $6.3 million, it is within the ballpark of what we might expect the Kolea house to auction for, based upon the most recent non-distress single family home sale there. Both are 4 bedroom luxuriously finished homes with a distinctive entry, fabulous pool, and sunset views.

At Kukio, this home is close to the resort entrance (meaning just below the highway), so the resort spreads out below in your ocean view. The Kolea home has nothing but a bit of lava between the pool and the ocean. Kukio offers superb amenities, which you share with no one except other Kukio owners. Waikoloa Beach Resort is more down to earth, and the beach at your doorstep is a state park. Only you can decide which equation fits your lifestyle.

Note rooftops in the view of this entry-level Kukio home (MLS# 239984) with a $1 million price reduction

Or if the bidding goes sky high at Kolea next Monday, the house on lot 4 which is already REO (bank-owned post foreclosure), just had its price reduced to $3,998,000 (MLS# 242410). Note that the vacant lot sold for $3,500,000 in 2005, so you could say you are almost getting the home on it for free!

And the fine print on this one is that the buyer pays a $75 document fee rather than a 10% buyer’s auction premium. By the way, if you want to register for the auction, you must do so by this Friday, March 17th, and your deposit must be wired by that date to raise a paddle to bid.