My readers know I always blog about Big Island luxury auction properties (and sometimes real estate auctions on other islands), and have had a lot to say about the value of luxury real estate auctions (for buyer and for seller).
But I almost decided not to write about the oceanfront estate at Keauhou Bay (Kona) being sold with no reserve by Concierge Auctions on November 12th. Not because it is a bad property, but because there are already a bunch of Hawaii Life blog posts about the home!
Not only oceanfront, one of a handful of properties in all of Hawai’i where your boat could pick you up at your own dock
If you want to read the basics as described on the Concierge Auctions materials, here is a concise summary by a Hawaii Life agent located on Kauai. You will also find several posts about this home by Kona agent Heidi White, for example, this one which I like because it has a photo of how the oceanfront main house looked with furnishings. (Note that the article’s date is almost exactly three years ago…and the listing price at that time was $11,500,000.)
But the story continues…
Why is this Ossipoff Oceanfront Estate Going to Auction?
The reason any seller chooses the luxury real estate auction route is that they want the property sold by a certain date, having been exposed via intensive and extensive advertising to a wide potential market so as to get multiple bidders and achieve a market bid price.
Quite often, as in this case, there is a history of the property having been previously listed for an extended period, often with several companies, at a range of prices usually well above the current listing price…let alone the eventual sales price.
This particular home has an even more interesting story, the outlines of which show in the tax records of ownership – or in the memories of local agents. In this case, my own middle-aged brain’s gaps were filled in by a long conversation with Hawaii Life-Maui agent Tobi Fisher, whose clients purchased this property in 2006 – for $10 million.
However, they are not the sellers. The seller at this auction is the owner who sold to them. Intrigued? Call me for details. But the bottom line is there is a reason why this Seller can afford to offer the property at absolute auction – meaning without reserve.
The property being auctioned consists of two oceanfront parcels. The one outlined in red has the existing residential compound on it. The adjacent lot 36 has the tennis court, incredible landscaping, and room for expansion.
The Seller already traded up to another oceanfront set of parcels in the neighborhood. Honestly, this property’s location is so special there would not be much elsewhere for a seller to covet. So it is not a distress sale, just an opportunity for buyers.
Why this Property is an Opportunity for Buyers
Sometimes auction properties have a fatal or near-fatal flaw. Sometimes they are gems in need of a good polishing. This home is the latter, and because many of the prospective buyers seeing the property are not prepared to appreciate its qualities, they may be underestimating the value in it.
If you come expecting to see a modern celebrity home, indoor-outdoor living with Kukio construction materials and finishes, you will be shocked at what you find. That’s why there are not many photos in the listing of the interior…and a bit of staging would certainly have helped!
Perhaps that is also why the on-site Concierge Auctions agent says a high proportion of the dozens of people who’ve previewed the property are asking a bunch of questions about what can be built on the second of the two lots, envisioning their contemporary resort-style home there.
Lanai shot illustrates some of classic Ossipoff design elements – but the modesty of the interior may surprise buyers (MLS# 263319)
Backing up for just a moment, let’s remember the three most important things in real estate. Recall that the location was selected by Senator William “Doc” Hill – who at the time could have bought anywhere. Recall that this bay location and portion of the coastline was a playground for the Hawai’ian royalty. Try thinking of any other location on the west side of the Big Island where if you are lucky enough to get a mooring, you could keep your boat in front of your home.
You want comps for an oceanfront parcel of almost three acres in a location where you can actually get safely into the water? Set aside lots in oceanfront Mauna Lani resort communities 49 Black Sand Beach and Pauoa Beach, where asking prices are $5-$8 million for a one-acre lot, because this is a residential neighborhood and therefore will not appeal to someone who wants resort amenities and a guard at the gate. Another kama’aina community with great history would be Puako.
A typical Puako oceanfront lot of less than an acre (or lot with a tear-down cottage) will be in excess of $2 million. The new development of larger lots at Puako Bay has a 2.58 acre lot with brand new landscaping offered for $5.9 million (MLS# 262975).
What I am trying to say is that even without the value of a mid-century modern classic estate with pool and tennis court, without the landscaping that would take a generation to replace, or without extra water meters and the development possibilities if a buyer had the stomach for it – based on the comps, land value alone for this extraordinary property could realistically be not so far from the $5,850,000 asking price.
Photos don’t convey the combination of power and peace one feels on this property
Prospective Bidders: Is this Oceanfront Estate Property a Good Fit for You?
I am hoping that there is a reader out there who understands the significance of this residential compound, and why it would be worth restoring to the glamor it must have held at the time (in the 1960′s) it was featured on the cover of Sunset magazine.
I’m looking at my copy of Hawaiian Modern: The Architecture of Vladimir Ossipoff. Feel free to go to Amazon and follow along on pages 94-95, where you will find a photo of this home’s “living lanai.”
Although he is sometimes described as the Frank Lloyd Wright of Hawai’i, the indoor-outdoor lanai-as-living-space construction you see in every resort home today quite possibly owes its origins to Ossipoff, influenced by Le Cobusier…and this particular home is cited as one of the early examples of the concept’s execution.
It is said the architect camped on the land for months to understand the how to take best advantage of winds and views. You won’t need air-conditioning, and the southern exposure will be kinder on your maintenance budget than a west-facing oceanfront property.
IF you are thinking you want resort-style privacy, you may want to read my various posts about oceanfront public access. IF you are thinking you’d want to build a new home, you might want to read about the additional reviews and restrictions faced by oceanfront property owners building in Hawai’i.
IF you are intrigued and want to take the next step, I’d be happy to make sure you visit the property with an interior designer and/or an architect whose insights would make the existing structures gleam with promise.
A blog post has its limits. Given that there are no contingencies on the sale, there are number of other things a serious buyer should know about property prior to signing up to bid – items which the auction house does not necessarily know or disclose. It doesn’t cost you more to have a buyer’s agent advise and represent you in the auction.
A hui hou,
Beth Thoma Robinson R(B)