What Will the Mauna Kea Resort Home Sell for at Auction on March 19th?
With the announcement yesterday by Concierge Auctions that the owner of the Mauna Kea Fairways North home set for auction on March 19th had agreed to remove the minimum bid requirement, prospective buyers are trying to read the tea leaves. Does that indicate there is a chance the home will sell for less than $1.4 million on March 19th?
Listed for $2,395,000; to be auctioned to highest bidder on March 19th (MLS# 255028)
Factors Affecting the Mauna Kea Fairways North Auction
In our experience representing sellers and buyers at luxury real estate auctions in Hawaii, the one thing we’ve learned is that a successful auction is one at which the property sells! The seller has achieved their goal (to sell by a certain date) and the winning bidder has bought at a price they were willing to pay.
Factor #1: The lower the price point, the less experience the buyer pool has with luxury auctions.
It would not surprise me if registrations for the Mauna Kea Fairways North auction were lagging behind those for the Hualalai auction. While there is clearly a larger pool of buyers who can afford $1.4 – $2+ million than those who can afford an 8-digit Hualalai sales price, the Hualalai buyer pool is much more likely to have a familiarity with luxury real estate auctions in Mainland neighborhoods where they own…or at least with luxury auctions for art or automobiles. Things like the auction premium tacked on to the sales price are better understood.
The registration deposit that has to be in by Friday of this week to even be handed a paddle for next week’s auctions is $100,000 for the Mauna Kea property and $250,000 for the Hualalai property. As a percentage of the likely final sales price, the deposit is more significant for the lower priced property.
Removing the reserve price is a good way to create excitement and encourage prospective buyers to jump off the proverbial fence.
Factor #2: Above (mauka) or below (makai) from the highway.
The lowest priced residential listing at the Uplands at Mauna Kea (MLS# 257645) asking $1,795,000
Remember that being the oldest of the Kohala Coast resorts, Mauna Kea Resort is the only one to have begun developments above (mauka) the highway. Those neighborhoods are entered via the Hapuna entrance rather than the Mauna Kea entrance…and once you get in, you can’t reach the Mauna Kea amenities without traveling back along the highway and through the Mauna Kea gate. That is a factor that should make any property in the Mauna Kea Fairways have a price premium over similar properties in the Uplands neighborhoods of Wai’ula’ula, Apa’apa’a, or Moani Heights.
Of the ten active residential listings at Mauna Kea resort, even at the $2,395,000 list price the Fairways North home being auctioned is the lowest-priced listing below the highway.
Paired homes (technically condos) of around 2,500 sq. ft. at Wai’ula’ula above the highway, have lovely new finishes and intelligent floorplans. They are suddenly “hot” this season with one having been bid up over asking price to sell at $1,700,000 in December and a new $1,695,000 listing in escrow in 44 days on market.
We always tell clients to remember you can remodel a home but you can’t change the location. Under $2 million Mauna Kea buyers who have been looking at Wai’ula’ula should take a hard look at this Fairways North opportunity.
Factor #3: Mauna Kea Fairways – “comps” are available.
Let’s talk bluntly for a moment about what’s held buyers back from buying the Mauna Kea auction property through its listing history. I do mean history. The lot was bought in 1991 and the house built in 1993. It has been on the market with different listing agents, off and on for a decade. In early years, it was a leasehold property; the fee has since been purchased. That obstacle removed, it got a remodel in 2007/8 just as the real estate market began its free fall. It’s just never found a buyer at a near-$3 million price.
Taking a hard look at it today, there are some things most buyers would want to do to the kitchen and baths. My partner, Pam Deery, and I had a professional review with us and got some pretty good estimates of what it would take to make those areas competitive with newer homes. The auction as a market mechanism will factor those buyer preferences into the price.
The thing you can’t change is that this is not a big ocean view property, and there is a vacant lot that makes prospects wonder if some day much of that will disappear. Again, factor that in as you review comparable listings and sales to figure out what that is worth to you.
So what if your home’s ocean view is smallish…Mauna Kea beach is just at the bottom of the road!
If you don’t try or don’t succeed at auction..what are your alternatives? The next “cheapest” Mauna Kea Fairways North listing is asking $2,995,000 (MLS# 259691). Bigger lot, smaller home, closer to the highway.
Then there is the slightly newer home (2000) with unobstructed views in Mauna Kea Fairways North that finally went into escrow…asking price $4,995,000. And the 2,992 sq. ft. Mauna Kea Fairways South home built in 1983 in escrow listed at $2,700,000. This one also has the views and has the intelligent interior upgrade that the auction property’s buyer is likely to do. Remember, the auction no longer has a minimum bid.
Bottom line: for a buyer who wants to be on the Mauna Kea (makai side) of the resort at a $2 million or less price point, participating in the Mauna Kea Fairways North home auction seems to be a no-brainer. Just factor location, views, and remodeling costs into your bid.
A hui hou,
Beth Thoma Robinson R(B)