Private schools in Oahu

Another reason to buy a house in Oahu rather than the neighbor islands - the number of private schools. Iolani, Punahou, Hawaii Baptist Academy, Assetts, and many others.

If you want to see them all, try this website http://www.hais.org/ There are 132 schools on this list, most of which are in Oahu. This is a great website.

The schooling issue seems to be a big concern for people moving to Oahu for the first time. I'll make it simple - most people who can afford private school send their kids to private school. I would say, nearly all of them.

Price reduction!

We reduced the price on our listing in Marco Polo today to $429k LH. It's right on Kapiolani Blvd in the heart of Honolulu, just a few blocks to Waikiki. It's an ideal condo for people who work in town. Great ocean view from each room.

I am baffled as to why it hasn't sold yet. We have had more showings than I can count, and even received 3 offers. None of them worked out.

How to get a good deal on a house

Let's say the house you're interested in is a house somewhere in Oahu, which is listed for $800k. It's been on the market for 2 months, which is semi long in the current Hawaii real estate market. So you look at the comps and you think you want to buy it for $750k (good luck!). How will you get your offer accepted?

There are several different things you can do to get a good price.

First of all, the price of an offer is only 1 of may parts of a purchase contract. What I try to do is make as many parts of the contract favorable for the seller as we can without taking too much risk.

For example:

• First and foremost, close escrow when the seller wants to. The seller may not want a fast closing, so check first. Maybe they want to close concurrent with a purchase and they need extra time.
• Have a short inspection period, say 7 days. Hawaii contracts average about 10-14. I've seen any many as 21 days.
• Also have a short title report review period, seller's disclosure review period, and condo doc review period.
• Give the loan pre-approval early, maybe even with the contract. Put it in the contract that the final loan approval will be done early.
• Offer to pay for the termite inspection. Usually the seller pays in Hawaii.

Then, once you've written the offer, make friends with the sellers. Find something in common with them. If you see them at the property, make small talk. If they like you, they're more likely to accept a low offer from you.

Next, when you present your very well written offer, send over your loan prequalification and the first page of your credit report (with SSN blacked out) so they can see your credit scores. Then tell the sellers that if they counter offer the price, you'll have to counter offer the other parts of the contract in favor of the buyers.

If the seller is concerned about closing on time or about the loan, or about any of the other parts of escrow, they might give in to the price.

Now - let's turn things around.

What if there are multiple offers and I want to make sure I get the property? Sometimes you're not as concerned with getting a good price as you are about just getting the property. Sometimes you want to make sure you're the highest bidder.

When there are multiple offers on a property, I want to be the last offer in. I'll ask the seller how many offers they're getting, and when they will present the offers to the seller. A lot of times the sellers of Hawaii real estaste are off island which makes it difficult for the agent to meet with the seller. So it's important ask very clearly, "What is the latest I can get you the offer?"

Then before I send my offer in, I'll bluntly explain to the what our offer is, and ask "Is this offer going to be the best offer?"

If they say no, I may have to revise the offer in some way, depending on what information the listing agent gives me, and what the buyer is willing to do.

In each circumstance, you have to be aware of what the seller's mindset is, and make sure that you know all the facts. Getting information from the seller will help you to get the best deal you can get.

Honolulu electric rate hike being scaled back - Infrastructure a problem again

I read in the Honolulu advertiser today that HECO (Hawaiian electric company) has lowered their requested rate hike from the government. People outside Hawaii often ask me, "How much is an electricity bill in Hawaii?"

The Advertiser says "The typical bill for a HECO residential customer in September was $134.19"

My bill is about $400/ month, but that's because I have a huge house with lots of people. My wife, kids, and now my mom lives in our maid's quarters.

I bring this up because in Hawaii there are 2 things limiting the growth, and therefore, the number of homes available. The first is the amount of land we have, but secondly, and just as importantly, is the available infrastructure.

The electricity on this island is limited, because we only have a limited amount. We can't buy electricity from other states, and also, we can't get water from another place either. We get rain, and when there is no rain, there is no more water.

The amount of water, electricty, and lately - room for trash, limits the number of people that can live in Hawaii. What does all this mean?

It means that there is going to be a day when Oahu officially is closed to development and population growth. We will run out of water, electricity, roads, health care, etc. When will that be? Who knows. But the effect this will have is very simple, yet very terrifying.

It will get more and more and MORE expensive to live in Hawaii. Taxes will go up. New home building will cease. In the end, home prices will rise forever. What happens when you have an island that is maxed out in its capacity, but people still want to live here? Home Prices go up. Prices on the other islands will go up too. It's inevitable. As more and more people retire and want to live in paradise, infrastructure will be maxed out, and we will have to slow the growth.

Perhaps there will be a point when it gets too expensive to live here for many people, and they will leave. Do you know who they will be? Unfortunately, the poorest people probably. The rich will still sit comfortably and watch their real estate prices rise.

The current trash problem is just the beginning.

Things your home inspector will miss

Everyone should get a professional home inspection when buying a home in Hawaii. But the inspector won't catch everything. Here are a few things that I've found can be missed.



1 - Sprinkler system. I don't know about other states, but in Hawaii the inspectors don't want to touch the sprinkler systems. They say they don't want to mess up the timing and kill the landscaping. But if they don't check it, who will?



2 - Slow plumbing leaks. This is really hard because they are slow by definition. Just last month a client of mine bought a condo at the Colony in the Peninsula at Hawaii Kai, and after she moved in she found that the leak the seller had repaired in the kitchen plumbing was still there, it was just slower. The only way to really check this is the run a lot of water for a long time, like 20 minutes, and put a paper towel under the sink. I realize this wastes water. Bummer.



3 - Non working outlets. I have seen an inspector check every single outlet in a house. Some of the bigger houses, like in Portlock, have hundreds of outlets. How can you check them all? You can get a little tester and stick it in the holes, but I doubt you'll do it.



4 - Old dying breakers. In older houses, the breakers tend to wear out and get to the point of needing replacement. I bought a home in Aina Haina and after we moved in we found that some of the breakers kept tripping once a day or so. As soon as we replaced them, it was no problem, but they cost about $50 each.



5 - Roof leaks, cracks, etc. Unless you are looking at your house in heavy rain, there isn't a way to be 100% sure about leaks. One thing you should do is look carefully at the ceilng everywhere. Do you see stains? Oahu gets a lot of rain, so if there is a leak you should see some stains. You can get a moisture meter to check and see if there is current activity. Sometimes there will be old stains from a leak that has already been repaired.



6 - Pool problems. The pool is always a mystery. Is it cleaning adequately? Is there a leak anywhere? Does the pump work ok? Is the heater functioning? I think the only thing you can do is talk to the owner and the pool guy. Ask the owner for their pool man's number and find our how the system is doing, what it's costing for maintenance, and if there are any upcoming repairs needed.



7 - Rain Gutter flow. If it's not raining, you can stick a hose in the gutters and see how they work. I had a buyer do this once. It was kind of annoying, but once he started doing it, I could see the point. The gutters were backed up in the places you couldn't see into.



8 - Problem neighbors (especially in a condo). You should meet the neighbors where you want to live. No matter how nice your new home in Mauna Lani heights is, if you have bad neighbors, you're going to hate it there. Even in a nice neighborhood like Kahala, you could have neighbors that turn out to be a problem for you. What if you have a problem with a dog or a fence on your boundary? Before you move in, meet the neighbors and ask them how they like it.



9 - AC unit condition. Even if the AC blows cold, you don't know how the system is. Are there any leaks? Is it low on freon? Maybe it's working well now but not in a month. Try running it full blast for an hour or more while you check the other things on this list. If it drips water into the house, you're in trouble.



10 - Insulation. Recently a buyer of mine purchased a home in Mililani Mauka and we found the insulation had been installed upside down. So it wasn't doing anything! No wonder the house was feeling so warm! You should ask the seller which walls are insulated and how hot the house gets. Feel the ceiling, is it hot to the touch? It should be cool. If not, it's not insulated!

Mainland lenders will sabotage Hawaii real estate purchase, on accident

It's happened to me too many times to count now. When buyers come to Hawaii from the mainland, they often want to use the lender they are familiar with from their home state. Some want to use a lender they found on the internet.

Nearly every time I have worked with a lender from mainland, something has gone wrong. The last time was a purchase of $775k in Kaneohe, a beautiful tropical retreat purchased by a great young couple from the mainland. Their lender, who happened to be from New York and worked for a big lender, delayed the escrow by 2 weeks. Then he proceeded to yell and curse at my escrow officer here in Hawaii. Why?

Because the lender didn't know that Hawaii recordings in Land Court require full names, not middle initials. The lender sent over the loan documents with the middle initial instead of full name, so we had to get the loan docs redone. It was a nightmere, because the buyers were ready to move in and had the moving company all scheduled.

Another buyer of mine found their lender online from did-it mortgage, which probably doesn't even exist anymore. The buyer was purchasing a great fixer upper in Hawaii Kai for only $725k, which was a great bargain since homes there in Kamehame ridge were selling for over a million dollars.

With 1 week left in the escrow, the lender told the buyer that they couldn't get him the rate they quoted because the debt raitios were too high. Uh.... are you kidding me? His debt ratio didn't change during escrow did it? We changed lenders and used Amy Benga here in Honolulu who swooped in and rescued the escrow with just days left. She was awesome.

There are many things about Hawaii real estate that are unique to Hawaii, and most mainland lenders don't know all these rules. If they miss just one, it could cost you the entire deal. For instance, do mainland lenders know that in Hawaii the recordation of the title is different based on which system it's recorded in? No, most don't know that we even have 2 systems.

I work with some great lenders here in Honolulu so if you are going to buy real estate here, you should work with a Hawaii lender. Besides, we often have lower rates in Hawaii than the mainland. I saw a Wells Fargo rate sheet that showed the rates from here and mainland and ours were about 0.125% lower!

Waialua new construction home

There are 2 houses that I have listed for $2.7 mil and $3.2 million. Brand new houses on the North Shore, right on the beach. I spent about an hour up there yesterday, and I have to say they sit on the most peaceful spot on the beach you could ever ask for.

This pic is the view of the beach and ocean from the lanai. You can't hear anything except the crashing waves and the light breeze. It's truly amazing.

In order to get some publicity for this great home, we have deciede to rent it out during surf season for a mere $10,000 a week. Since it's right in front of some great surf, we may find some people want to come vacation here and be away from the crowds at Pipeline and Rocky Point.

Waialua, if you don't know, is just 5 minutes to Haleiwa town, so you have everything you need very close, but it's quieter and there is less traffic. The traffic on the North Shore during surf season is terrible. TERRIBLE. The 2 lane road between Haleiwa and Pipeline is a nightmere when there is good surf.

Waialua is a great option for people who want to live in Oahu but be away from the crowds and traffic. For $2.7million, you can get a brand new house on the beach!

Aina Haina, Oahu's forgotten market

A lot of people who live on Oahu have never stopped in Aina Haina. Some have no idea where it is. It's not considered part of Diamond Head by the people who live here, even though it's in the Diamond Head region in the Honolulu MLS. It's also not considered part of Hawaii Kai by the residents of either, even though we border it.

Our prices here are lower than both Hawaii Kai and Diamond Head, even though there really isn't any difference. Recently, the Aina Haina shopping center was purchased by a mainland investor who plans to renovate the whole thing, which should give it a nice clean updated look. That should help real estate prices in Aina Haina too.

There are several hundred homes in Aina Haina and one of the best schools on island, Aina Haina elementary. It's consistently ranked in the top 5 in the state! Even though we could afford private school, we've decided to send our son to Aina Haina school because we live 3 houses away from it, and it's a great school.

Some of the homes in Aina Haina have great ocean views. In fact the farther back you go, the better the views get. The best view is of my favorite surf spot, Wailupe, which is a 3 minute walk from my house.

There is nothing better than being able to walk to the surf everyday. Also, Aina Haina is about 10-15 minutes closer to town than the back of Hawaii Kai, like Kalama or Mariner's valley.

So don't forget to search for Aina Haina when you're looking at homes. We love it!

You should choose Oahu

Why should you buy a house in Oahu rather than Maui, Kauai, or the Big Island? (Don't even think about living on Lanai or Niihau).

1 Oahu has the best health care. If you live on the outer islands and have a serious health problem or emergency, they will fly you to Oahu, during which time you may die. Serious.
2 The outer islands are slooooooow. Everything is slow. Cars are slow, people are slow. Change is slow. It will drive you nuts. Unless of course, you are slow.
3 The traffic in Kauai is crazy. Yes, it's worse than Oahu. If you want to get from Liue to Kapaa or even worse, to Princeville or Hanalei, you better be prepared for the slowest drive of your life. There is a one lane road the whole way.
4 The outer islands shut down at about 8pm, while Oahu is up all night. If you want a late night snack, you better be on Oahu.
5 Real Estate in Oahu is going up, the outer islands have been going down for 2 years. Why? Because their market is too dependant on tourism. They have no local industry. We have all the businesses in Hawaii.
6 If you lose your job on the outer islands, you'll be moving or on welfare. On Oahu, you can apply for a new job at one of our thousands of employers. Oahu's market is far deeper.
7 Oahu has symphonies, rock concerts, trade shows, outlet malls, every kind of car dealer, and soon, Whole Foods and Target. We have it all. The outer islands are just now enjoying Walmart. Yuck.
8 If you buy real estate in Oahu, you'll never have to go to the outer islands except to vacation. About once a year I take my family to the Big Island or Kauai just for fun. If I lived on Oahu, I would have to come over here for a lot of things. Things that the outer islands will never have.
9 It costs about $50 to fly inter-island. I can get to the outer islands anytime I want.
10 Schools. This should actually be much higher ranked in this list. The schools on the outer islands are for the most part, terrible. In fact, much of the reason that Hawaii as a state gets a bad rap for schools is that the outer island schools are lumped together with the Oahu schools. If you look at the school reviews, almost all the top 50 are on Oahu.

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You can find great local Hawaii real estate information on Localism.com Tony Kawaguchi is a proud member of the ActiveRain Real Estate Network, a free online community to help real estate professionals grow their business.

Oahu real estate prices are still going up

While most of the mainland is experiencing the bursting of their real estate bubbles, Oahu real estate is still going up in many areas. I'm not making this up.

For Oahu overall, the median price of homes is up 1.9% year to date. That mean we might be at around 3% by year end, which would be great, considering parts of CA are down 20% this year alone.

There are 2 main exceptions the price gains in Oahu homes. The North Shore is experiencing a major decline in the number of sales, and the median sale price, although I don't think that means that the price of homes is actually declining. It means that cheaper homes are selling while expensive homes are not. Why?

Well, I did a search of all the North Shore Oahu home sales in 2007, and found that about 3/4 of them were bought by buyers from California. So now it makes perfect sense why that part of the island would see such a strong decline in sales.

On the other hand, Windward Oahu, which includes Kailua and Kaneohe, is up 4.1% in median sales prices, and 7% in the number of sales year to date. This is fantastic news. Kailua and Kaneohe are 2 great areas that I work in a lot, and I could have guessed the numbers would come in strong.

Now, East Oahu came in with a 1.9% increase in price, with a median of $925k. This includes Hawaii Kai, Diamond Head, Kahala, Aina Haina, Waialae Iki, and everything else around here east of Town. East Oahu real estate has the highest median sale price in Oahu, since many of the commuters and heads of business live here. No surprise that sales price are up, even though the number of sales is down 6.4%.

Metro Oahu was down 1.4% in median price, which may be an indication that people are leaving town and headed for the east of Oahu. That's my theory.

Now what about condos in Oahu?

Overall condo prices are up 4.8% for the year and it's only September! WOW! Now here is an odd thing though. Condo prices in East Oahu are down 6.3%, while condos in town are up 9.1%. I cannot explain this at all.

Do you want further evidence that the Oahu real estate market is going up? Consider this. One of the most telling factors is the length of time properties sit on the market. On the mainland, homes are taking 6 months to a year to sell. In Oahu right now, the average single family home takes 44 days to sell. HELLO!

We are still in a seller's market! I'm working with buyers who are writing full price offers because the listings have multiple offers.

Now I admit, some of the market is slow. I have listings in the $2-4million range that don't seem to be getting the kind of activity we used to get, but we are certainly still getting showings. Also I have a listing in Ocean Pointe right now that is getting lots of showings but no offers. Anyone want a condo in Ocean Pointe?

Cool your Hawaii house down - I did!

I recently bought a house in Aina Haina with a flat roof, which is very common in Hawaii. It's actually called "torch down" or "monier" roofing. Houses with a flat roof often get very hot.

Here's why. The material on top gets hot of course, with the Hawaii sun beating down on it all day, nearly everyday, nearly all year. Even in winter the sun is hot here. Shade is valued as high as anything else. So the sun beats down, heats up the top of the roof, which heats up the air just under the roof, which keeps trapped air in between the ceiling and the roof.

So, a friend of mine was over at our house on a hot day and recommended a product called Hydrostop. The product cost about $2500 to coat the entire roof, and they wanted $2000 to put it on, but I paid 2 hourly workers $100 a day for 2 days, and saved a lot of money.

I wasn't sure how well it was going to work, but after we put it on a small portion of the roof, I went up and touched the roof. WOW. It was actually cool to the touch. It felt like water it was so cold. I still wasn't sure how much difference it would make in my house.

After the 2 days, we were anxious to see how the house would feel the next day in the blazing Hawaii sun.

Again, WOW.

The house was about 10 degrees cooler than the day before, even though it was the same outside. It's now been a month or so since we applied the Hydrostop, and we are very pleased.

Even if you don't live in Hawaii, if you have a flat roof and your house is hot, you should definitely try Hydrostop.

Kailua town condos - no car needed

Recently I've had a few buyers for Kailua town condos. If you want to live somewhere that allows you to walk from home to the shopping, restaurants, and beach, Kailua town condos are ideal.

There have been some retirees moving from California and some young first time buyers that have really liked the condos in Kailua town lately. If you want to live right in the heart of Kailua town, there are several great condo complexes that allow you to walk to the grocery store, Starbucks, and everything that Kailua town has to offer. Of course, next year that will include the new Whole Foods that is coming. We can't wait for that.

There's Poinciana Manor and Gardenia Manor, which are two similar complexes that are low rise buildings. They're a little old but pretty well taken care of. You get 2 parking spots with most units, which is a great benefit. Both of the complexes have great grounds with lush landscaping and koi ponds. Very nice ammenities. Poinciana has a saltwater pool too.

At Hokulani, a newer complex, you only get 1 parking spot, but you get a much newer complex. The units are generally a little smaller, but they're cheaper, at around $350k-400k, so if you're on a limited budget, they are a great option.

Windward cove is a unique complex, where each unit has a rooftop lanai. They are a bit bigger and therefore a bit more money, at about $500k. Very limited parking.

Windward Harbor is right next to Windward Cove, but I think all the units have 2 parking spots. Also, they have a great pool and tennis court. Nice ammenities and a nice koi pond. There isn't much guest parking, which is a bummer.

There are a few others that are nice, but these are my favorites.

Interest rate cut? Will it help?

On Sept 18, the world will be silent to hear one person: Ben Bernanke. Will he rescue the economy, the global credit crisis, and the housing market all in one move of the Fed Funds rate?

The Military is Back!

It's begun. The 7000 military families that will be coming to Hawaii in December and January have already started calling and emailing me about buying homes in Hawaii. Not all will buy homes, not even half probably, but the ones who do will have a chance at making some great money on a home as it appreciates over the years.

I've recently been able to sell homes for military families that made over $100k on their home here in just a few years. Amazing! You gotta love being stationed in Hawaii!

7000 families is a huge number of people for Oahu, which only has about 900,000 people living on it. When you consider that less than 1000 properties sell every month, you can see what a huge impact all those military families have on the economy and the real estate market in Hawaii.

Most of the military families who buy property in Hawaii do so in places like Mililani, Royal Kunia, Waikele, and Ewa Beach. These areas should do very well when all these families come in December and January. Some (many) will rent, but those who buy will take a lot of the good inventory. Get ready!