Affordable housing on Hawaii - It just shows how crazy our market is

At the Country Club Village high-rise project in Salt Lake you can buy a condo for $218,000 to $397,500, which is incredibly cheap for Oahu real estate.

The Advertiser reported this morning that over 500 hopefully home buyers were in line yesterday to buy one of these affordable condos. Some people lined up 2 days early and camped out. One bedroom units are priced between $218,000 and $283,000 while two bedrooms go for between $321,000 to $397,500.By law, half of the units in the project must be owner occupied.

While this is great news for some local people looking for affordable housing, it just shows how huge the problem has become in Oahu real estate – there just aren’t enough places for people to live. The lack of available housing continues to drive the market up, in spite of the broader market forces that have lately rocked mainland real estate.

With supply short and demand about the same as the last few years, no wonder the Hawaii real estate market hasn’t seen the declines that the mainland markets have.

Construction of the new project is supposed to be completed in March 2009, which probably means it will actually be done in June or July. By then, how much will the condos be worth? Double? Who knows.

In these affordable housing type of projects, you usually end up getting a lot of units owned by people who don’t care too much. The units and the building get abused, so the investment value may not be there. You won’t see people with deep pockets lining up for these things, so the people who live there may not have the money to keep their condos in nice condition or update them when they get old.

You have to be careful investing in units like this, but hey if you need an affordable place to live, it’s a great option.

The one big concern that I have and everyone else has is the traffic. The traffic in Salt Lake is already crazy, and this giant building with hundreds of cars is not going to help.