Aloha Tony's Oahu Real Estate Blog

"I don’t have 20% to put down. Does that mean I’m out of the game?"

If you’ve even thought about purchasing a home, you’re already aware of the industry standard in home-buying: 20% down for a mortgage loan. The absence of that amount of cash is enough to defer the dream of home ownership for many. But this doesn’t have to be the case for everyone…

Why is 20% such a magic number in the first place? From the lender’s perspective, offering you more than 80% of the value of the home is a huge risk. Why? Well, statistically speaking, a buyer who hasn’t had the income or financial habits to save that amount of money is more likely to default on their mortgage loan. Nothing personal, these are just the facts.

But what if you have great financial

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Today she has almost nothing in her wallet, little money for gas and only enough money for one more month of groceries.  Her money has run out, and she told me that next month, she will have nothing left.  But in 2005, this friend of mine bought a tiny house in Honolulu for about $350,000.  At the time, that was a lot of money for Mary (pseudonym), who had to stretch to qualify and had barely any savings.  For the past 12 years, she scraped and saved everything she could to make her house payment, literally getting her bank account down to zero many times. 

A few years ago Mary had to take a low paying job at a big company, with the hopes of climbing the ladder.  That job ended badly, so she took another low paying job at night.  Mary did everything

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     One of the most common phrases a Realtor in Hawaii will hear is ”back on the mainland” or “back in Seattle” or back in (fill in your city), followed with, ”my home was so much bigger” or “brand new” or “I had this much land!” These statements always end with the inevitable disbelief of how much a single family home will cost in Hawaii specifically on the island of Oahu. Not only how much they cost, but what you get for your money.

     The island of Oahu has a land mass of approximately 600 square miles. With over 950,000 people occupying the space, and so many people looking to stake a claim in an area this size, it is no wonder that many homes in highly sought after neighborhoods have soared to over to well over $600.00 per square foot.

   

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People often ask me about remodeling in Hawaii. Is it hard to find a good contractor? Yes.  Are materials and labor more expensive?  Yes. But you can do it and you should. I've done several remodels now, and this one is my favorite.  

A couple years ago I bought a foreclosed home on the North Shore from a bank.  The process of buying it was a crazy ordeal that took over a year to complete, dealing with title problems and termites.  But once I finally closed on the purchase, the real work began.  This is what the front of the house originally looked like. The trees and grass were overgrown, and the carport had a very plane look to it. 

Original Front of HouseWe removed the center post in the carport, added a nice door and some wood to give it a board and batten look, and

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     As I'm looking at the statistics that just came out from the Honolulu Board of Realtors, I'm laughing! Mainly because at the beginning of the year I actually thought that maybe the market may start to slow down in 2016 (see my article from March 2016 below in the blogs)... Boy, was I wrong!

      Not only did our market continue to soar in 2016, but December was the 2nd highest month for # of sales. December is usually a bit slower as expected with the Holiday's.

 

     The median home price for Oahu went up from $700K to $735K. And the median condo price went up from $360K to $390K respectively. The Honolulu Board of Realtors calls this "stable". The average days on market for both SFH and condo's went down (that's a good thing) to 18

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Buyers this past summer got a great deal on their loans, with interest rates at around 3.5%. Since then, rates have shot up from 3.5% to 4.5%. How are interest rates priced anyway? And what do rising interest rates mean for the housing market and the economy overall? Should anyone still consider buying a home right now?   

Pricing interest rates 

Let's start with the first question: how are interest rates priced? Economics writer Paul Solman offers some insight:


Think of a market interest rate as the sum of three separate factors: waiting, repayment risk, and inflation.

1. First, waiting — also known as the time value of money. Imagine an inflation-free environment, such as today’s. Which would you take: a thousand dollars today or a

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     As most of you know, Pantone, Benjamin Moore and Sherwin Williams each year, pick a "Color of the year" that influences trends for interior design and fashion. Following these color trends can be very risky if you plan on selling your home within the year... This year Pantone has picked a color called "Greenery." Its a very vibrant, yet not neon green. I might even call it Spring Green. It's pretty in small doses (pillows, throw blankets, or other decor), a wall of this color may be a bit overpowering though, and only appeal to a small number of buyers

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     Benjamin Moore has picked "Shadow 2117-30" as their color of the year for 2017. It's a VERY dark navy blue with some shades of purple in it. It's a beautiful color for a dress, a men's

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        Artist Rendering for new development on Kapiolani 

       A Los Angeles based development company (Salem Partners) recently filed a sewer connection application for the "Heald College Plaza Development" block of 1470, 1488, and 1500 Kapiolani Blvd. to build a 500 unit, high rise condo-hotel building which would be just adjacent to Walgreen's and across from Ala Moana Center.

      The building, once completed will consist of 301 studio, 122 one bedroom, 71 two bedroom, and 6 three bedroom units.

      They will be using locally based engineering and planning firms and also have other building in the works near the convention center.

      As soon as I have more information about purchase price and pre-sales, I'll add it to this blog.

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  Our sellers did a killer job on renovations to this already valuable piece of property in Mililani Mauka. Thanks in large part to their hard work, we were able to go into escrow today after just 4 days on the market!        Some of their upgrades include all new flooring throughout, a wide open kitchen with brand new cabinetry, granite countertops, and all new appliances; fresh paint on the interior and exterior; and a brand new washer and dryer.      This two-story home on a corner lot has 4 bedrooms, 3 full baths, and a flat and grassy back yard.      Mililani Mauka was developed about 20 years after Mililani Town, on the other side of Interstate H-2. "Mililani" literally means "heavenly caress"…
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      It seems that prices are still continuing to rise in the residential housing market here. As we begin to come upon the "busy season" of sales, there are some interesting trends to note as we compare last years statistics to this years.

    The median home price for single family homes has risen again to $725,000 from last years $700,000. That's a 3.6% rise. Last year at this time the median home price had risen 7.2% from the previous year....could we finally be slowing down? The end of the year statistics will show us a better picture, so stay tuned for that in the months to come.

    The median home price for condo/townhome's also rose to $385,000 from $380,000, respectively. That's only a 1.3% increase from last year, compared to the rise of

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