Foreclosures, Short Sales & REO's

The Last Halii Kai At Waikoloa Foreclosure?

Halii Kai 16H, a ground floor 1,403 sq ft, 3 bed/2 bath condominium with some ocean view across the road that leads to the communityʻs oceanfront amenity area, is set to be auctioned “at the flagpole” in Kona on Thursday, March 12, 2020. Here is all the information in case you want to bid…or just sit tight in the likely case that the lender wins with its credit bid, and the condo comes onto the market after the foreclosure process is complete.

At the commissionerʻs open house last weekend, I was surprised to see a unit looking as if it was waiting for the next rental guest to check in…furnishings, art, even kitchenware still in place. That might or might not be included if you win at auction.

Halii Kai 16H view

View from lanai of Halii Kai 16H, to be auctioned March 12th…note the wet bar was a developer upgrade.

Price History at Halii Kai – #16H as an example

The 24 buildings at Halii Kai are identical, in that each of the four floor plans are repeated twice, the two sides being mirror images. When I worked for the developer, we had a price sheet where each building was assigned a $/sq ft value, starting at the oceanfront and decreasing according to some formula meant to take into account location and views.

Halii Kai - all 24 buildings identical

All 24 buildings at Halii Kai are identical, with the four floor plans repeated twice. The 3 bed/2 bath is always ground floor end.

In the direct oceanfront buildings, the ground floor 3 bed/2 bath sold for just over $2 million or $1425/sq ft. On the golf course, but near the ocean club, an original owner would have paid $1,686,700 or a little over $1200/sq ft. And 16H, the unit in foreclosure, being near the front but not on the golf course, was priced at $870/sq ft — $1,122,400, including a few upgrades including a wet bar on the lanai and tile rather than carpet in the great room.

In 2008, this owner offered his condo for sale at $1,599,000 — and then the market crashed. For whatever reasons, the owner just kept his vacation rentals going until the lender foreclosed, rather than attempt a short sale. Meanwhile, on the other side of Building 16, I represented the original owners in a short sale…and the current owner bought in 2011 for only $450,000…around 45% of peak values.

What Is a Fair Price for Halii Kai 16H in Todayʻs Market?

Halii Kai Pool Sunset

Halii Kai is an oceanfront condominium community with the shared amenities right on the ocean…perfect for sunset gatherings.

I asked the Commissioner how much is owed on 16H…in other words, how much the lender could bid if they choose. The unpaid balance is over $1.3 million, and there are additional liens from the Haliʻi Kai Association of Apartment Owners to be satisfied that total almost $20,000.  The lenderʻs calculation will be whether a bid offered at the auction is more or less than they would net by completing the foreclosure and putting it back on market after paying legal fees, asset management costs, and real estate commissions.

Using our metric of a $/sq ft value for a particular location, one recent comparable sale we have is a 3 bed/ 3  bath 1,677 condo that closed one building over in January of this year. The $980,000 price tag was 83% of the original cost of the unit (although it was sold furnished, so really more like 80% or less); the price works out to $584/sq ft. Applying that value to the 1,403 sq ft floor plan suggests a fair market value of $820,000 for Halii Kai 16H.

But also in January, a small 2 bed/2 bath in building 16 sold for $715,000 in less than a month on market. That works out to $660/sq ft, or $927,000 for Halii Kai 16H.

For a third point of reference, Halii Kai 22H, farther back on property in the Coconut Grove, without the upgrades or ocean view, has just been listed for $ 685,000.

By my logic, a rationale seller might accept 10% less than what they expect to get if listed, avoid the time and expenses…so if I were bidding, I would try mid-to-high $700,000s. But no guarantees, and the sale will be subject to court confirmation. If you just pulled cash from the falling stock market and are looking for someplace to put it, show up at Hale Halawai on Thursday March 12th with a cashiers check for 10% of your bid. Or call me if you want to talk story about Halii Kai options.

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Gerald W Edwards

February 27, 2020

I should have bought into the Plantation homes back in the early 2000’s when they were going for broke… like low $300K. Are foreclosures a typical occurrence in the Plantations?


February 28, 2020

> Hi Gerald, thanks for commenting. Will send specifics via email, but in general there are few foreclosures coming up across the islands compared with 10 years ago.

Lisa Velasquez

February 28, 2020

Once again you nailed it Beth! Mahalo

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