Jan. 19, 2018

Fixer Upper Honolulu-Hawaii Kai Edition

In May 2017 my husband and I bought a fixer home in Hawaii Kai. It was in original 1970 condition and it needed some major TLC!

The renovations that we made were all cosmetic and we (thankfully) didn't have to do any electrical or plumbing work that exceeded the amount to do without a permit.

What we did do: paint, flooring (tile and carpet), lighting, full kitchen, 1 toilet (in 2nd bath) and 1 full bathroom. It doesn't sound like a lot, but it took us 5 weeks. We stayed in our previous home so we didn't have to live through it all. And, luckily I have a very handy husband (James, also on Team Aloha Tony) who has built homes from the bottom, up...so he knew what he was doing and we didn't need to hire a general contractor or a construction manager!
As of now (7 months later), we could sell this house for about $100K more than what we paid for it. We only spent a little over $20K on the renovations. Here are some before and after pics.
And After:
We took down the wall between the living room and the kitchen to open it up. And added a bar.
The Old KitchenThe New Wide Open kitchen

Before: the wall between the living room and kitchen.

After: Open living/kitchen with a bar.
Before: dining room
After: dining room. We made the weird closet into a built in hutch. You can also see that we moved the washer/dryer and put in a pantry.
Before: Master bath
  After: We put a double vanity in as well as tile backsplash.
Before: looking into living room from enclosed lanai.
After: looking into living room from kitchen. 

The key to an efficient renovation is having someone that can plan every step before you start! It's so important in order to finish on time. If you tear out an exhaust vent above the stove top to relocate it, and realize later that you will also need to repair the ceiling above, you'll be constantly chasing your tail. Hiring a construction manager will help save you time and money. Typically, they have contractors in their pocket that will get things done quickly and get you competitive pricing as well.

Call me today to find your Honolulu Fixer upper!

Chelsea Pferschy (808) 754-6000


Oct. 31, 2017

4 bedroom Kailua home near the beach. $1mil.

Here's a beautiful home in Kailua that is back on the market after the buyer canceled, due to a mistake by the appraiser.  We had a great transaction going  until the appraiser measured the house smaller than the blueprints, tax records, and permits on record at the city.

The appraiser's measurement was 70 square feet smaller than the permits and blueprints showed,  which caused him to value the house lower than our sale price.

So here is your chance to get a beautiful 4 bedroom 3 bath home with over 2000 square feet, for $1,049,000.  In Kailua, one of the most sought after neighborhoods on Oahu, this is a great value for Kailua real estate!

Kailua real estate Great Room

Nice white kitchen opens to the living room

Beautiful large grassy yard for the kids!

And here's an added enclosed lanai that serves as a family room off the kitchen.

Currently in Kailua, there are only 3 homes available under $1.2mil and over 1800 sqft.  This is the best value in Kailua real estate so come see it today!

Posted in Kailua real estate
July 31, 2017

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Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

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You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates
June 22, 2017

7 Tips for selling your home in the summer

Let's face it: there is never a bad time to sell your home in Hawaii! But with school out and a lot of military families starting to arrive, summer becomes a very good time for home sales.

Here are a few tips on getting the most for your home, and even possibly getting multiple offers.

1. De-clutter your entire home. Keep 'knick knacks' down to a minimum and take down a few of those family vacation photos. This will help other people be able to see themselves in your home and help to not distract them when they're viewing your home.


2. Make sure your yard, lanai, and garage are as clean/picked up/de-cluttered as possible. These area's serve as entertainment area's in homes in Hawaii so they really help buyers see value in your home.


3. Leave your home when there is an agent showing it. There is nothing worse than a seller who is hovering over a buyer and their agent when they're trying to see a home. If there are special things about the home that you feel that your agent has not provided buyers, then make a short list and leave it on the kitchen counter for agents and buyers to see. There are other things that a selling agent can do in this type of a situation as well. Call us for more details...

4. If you have AC units, turn them on before a showing. If not, then leave some windows open so that the home can be ventilated. If your home feels HOT and almost as if there is poor ventilation, that could deter them from wanting to live there.

5. Make sure your home is as clean as possible. Hire a cleaning company to do a deep clean before listing your home. I've seen so many buyers who were unable to see past a mess.

6. If you're trying to sell a home that is vacant, try to go to the home every 5-10 days. There is nothing worse than opening a kitchen drawer and seeing a dead cockroach...


7. Turn ON all of your lights even if it's daytime. It sounds absurd, but it always helps your home appear more "light and bright"!

If you have any questions about selling your home, call us! Our team has been on the Realtor Top 100 of Hawaii for 6+ years now. We specialize in both buying AND selling and can help you get the MOST for your home.

Call Jim and Chelsea Pferschy @ (808) 754-6000 (C) (808) 342-9000 (J)



Posted in General
April 30, 2017

Can I buy a home with 3% down?

"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 habits? What if you’ve got a good credit score and you’re good at saving? Let’s say you’re thrifty, out there hustling every day, but not making the 6-figures it seems you have to make in order to buy a home. What then?

Freddie Mac’s HOME POSSIBLE program may just be the right fit, which allows a minimum of 3% down up to a loan amount of $636,150 in Honolulu County.  So with 3% down, you’re looking at a max purchase price of $655,824.  Whoa.

Yes, Freddie Mac developed what you can say is a hybrid loan between FHA and USDA loans to serve low to moderate income buyers.  Unlike a USDA loan (in which you’re limited to buying in rural and underserved geographical areas) the HOME POSSIBLE program allows you to purchase island wide! You would just need to make sure you're within the income limitations. These limitations depend on which area you’re looking to live in, but note: there are even some geographical areas that don’t have any income limit. More info here: http://www.freddiemac.com/homepossible/eligibility.html

Some basic details:

  •       3% down payment
  •       Down payment can come from a gift (e.g. from mom, dad, grandma)
  •       Buyer must be owner-occupant, purchasing as their primary residence
  •       Minimum FICO of 620
  •       Income limits may apply depending on location
  •       Home ownership education certification required for first-time home-buyers
  •       Max loan amount for Honolulu County can’t exceed $636,150

Do what you can with what you have, where you are. That’s what Theodore Roosevelt said. So you can’t buy a median-priced $750K home in Hawaii? Start somewhere. Start small, start now. Begin to build the dream. It’s your dream. And we’re here to be on your your team.

Thanks to our info source for this article: Steven Bui, loan originator at Compass Home Loans, LLC. He’s a responsive, informative and creative problem solver. Great guy to have on your team.

Posted in General
March 16, 2017

She's broke today, but buying Hawaii real estate saved my friend's life.

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 she could to make her house payments, and was able to modify her loan to a lower rate and payment a few years ago.  

Fast forward to the present day, and Mary is now finishing school for a new career, but has no income until that career starts.  She's got some credit card bills, school loans, but she's still on time with her house payment.  Mary has tried to do everything right and worked hard, but life has brought her many difficulties. 

Now, guess how much Mary's tiny house is worth today.  Guess... 


That's right.  Mary is rich.  When I met with her, she had no idea she was rich.  Though she has almost nothing in the bank, even after paying off her credit cards, school loans, her modified home loan, her net worth is roughly $200,000.  That puts her in the top tier of people in America.  All we have to do is sell her tiny house. 

While Mary is doing everything she can just to afford her groceries, and has hardly any money for gas, she is rich. When we close on her home sale, she is going to have wealth that she never thought she could have, and it's tax free. 

She told me, "I have nothing left, and I don't know what I'm going to do next month." But buying Hawaii real estate will have saved her life. 

Posted in General
Feb. 24, 2017

Moving to Hawaii and thinking of buying a home? Forget what you know about real estate on the mainland!!!

     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.

     According to an article in Pacific Business News published in January of 2017, home values on Oahu rose 5% in 2016 and the median home price rose to $740,000.00.

     In this article I will focus on one very hot area of Oahu for home sales, Hawaii Kai. This area began to be heavily developed in the seventies so many homes for sale in this area will typically be forty to fifty years old. For most people moving here from the mainland they are quite shocked to find a 40 year old 1200 square foot home selling for upwards of $800,000.00 and in many cases the home may still need a renovation or makeover to bring it up to date. Furthermore, it is not uncommon for these homes to only last on the market for a few days, with offers well above asking price. However, with all of that said, Oahu is still one of the best places in the country to invest in real estate!

     Before the market crash in 2008-2009 Nevada was one of –if not THE- fastest growing states in the nation. For comparison, I will show how an investment in real estate in Nevada compares to an investment in real estate on the island of Oahu.

     Post-crash, at the end of 2009, this 5800 square foot house (in Reno, NV) was only two years old, sat on an acre of land and had 4 bedrooms and six bathrooms. Sale price was $1,000,000 or $172.00 a square foot.


     Almost 2 years later, at the end of 2011,with the economy still struggling, this 1242 sq. foot home ( in Hawaii Kai) with 3 bedrooms and 2 bathrooms sitting on a little over 1/3 acre sold for $799,000.00. Or $644.00 a square foot.


     It is obvious, as the pictures show, you get a lot more bang for your buck on the mainland. However what the pictures don’t reveal is the investment potential. The home in Nevada sold at the end of 2015, six years later, for $1,175,000.00. Or $217.00 per foot that equates to roughly 2.91 % a year in appreciation.

     On the other hand, the home on Oahu is currently listed at $1,145,000.00. ($921.00 per foot) This sale price will bring the annual appreciation rate up to 8.6% over the last five years. To further illustrate the value of the Oahu home over the Nevada home you also have to consider the difference in real estate tax rates. The real estate taxes on the Nevada home were roughly $11,000 per year, while the Oahu home is only $2,900.00.

     So what does that mean for a buyer moving to the islands from the mainland?

     Real estate on Oahu continues to be a great investment!

     The best advice I can offer is to work with a Realtor who knows the market well. Have your Realtor begin your home search well before your move so you have a better idea what to expect before you arrive. This will not only save a considerable amount of time and frustration trying to adjust to the real estate market on Oahu. It will also prepare you to take the next step once you have found that dream home.

     Stay tuned for part two of this article “you’ve found the house you want-how do you get it?”

p.s. it is not as easy as you may think!

James Pferschy RS# 79141 (808) 342-9000

For questions or comments on this article email me at jamespferschy@gmail.com

Posted in General
Jan. 18, 2017

Before and After my North Shore Remodel

    Many people get confused when Realtor's talk about Mariners Valley in Hawaii Kai. They say, "Do you mean Mariners Ridge????" Nope. Im talking about the valley that's nestled between Mariners Ridge and Kamehame Ridge, Mariners Valley. It goes by a few different names, depending on what area of the valley you're talking about....Mariners Valley or Kamilo Iki Valley are the 2 that are widely used. They're based on the legal descriptive names of the area and the subdivisions used in the property tax records for Honolulu County. 


An aeriel  view of Mariners Valley from the ridge above

    There are single family residences and also townhomes in Mariners valley. The valley is in a really great area of Hawaii Kai, right in the middle. But it's tucked back so that you get a nice suburban and quiet feel here. Koko Head crater looms overhead so most of the residences get a nice view of it, at least from the streets. And in the back (top) of the valley, some homes even get Hawaii Kai town views and some partial ocean/marina/canal views. 
    At the beginning of the valley there are numerous soccer fields, a skate park, basketball courts and playgrounds.  Up from there is Kamilo Iki Elementary School.  There is also a park (Kamilo Iki Neighborhood Park) about halfway into the valley with a playground, basketball court and a soccer field space. And if you want to catch the bus, there are a few stops on Lunalilo Home Rd. 


Mariners Valley 3 Townhomes 

     The townhome subdivision is called Mariners Village 3. Prices range from  $448K-$607K  (in the last year) and they have units with 2-4 bedrooms and range between 850-1356 sq ft. The lower priced one's may possibly need some renovations, but the reduced price and being in Hawaii Kai are 2 great reasons to check these out! I've seen these units after they've been fully renovated and they're awesome! The neighborhood has a pool and clubhouse available to the owners and floorplans are spacious and buildings and grounds  have been well planned and maintained. 


Kalapaki St single family home in Mariners Valley 

     There are also many single family homes in the valley that range from $750K-$1,078,000 (in the last year), and land sq ft range between 5,200-13,700 sq ft. If you know your rules of real estate in Hawaii, then you know that the more land you have, the more you'll pay for the home. It's a commodity that we, unfortunately, cannot produce any more of on this island, especially on this side as most of the usable land has been developed already. 


View from the lanai of a single family home in the back of Kamilo iki Valley 

    Hawaii Kai is such a desirable area to live in with the close proximity to great beaches, town, shopping and restaurants. On top of that, the highly rated public schools put Hawaii Kai home values up on the top.  Mariners Valley/Kamilo Iki Valley are a wonderful option for buyers to consider here. Log onto alohatony.com to get customized information on Hawaii Kai and other neighborhood's on Oahu. -Mahalo

By: Chelsea Pferschy RS# 76072 (808) 754-6000

Posted in General
Jan. 6, 2017

Real Estate Market Stats for Oahu 2016

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 days on market for both. WOW, that's fast! The key is choosing the right agent who KNOWS the market and has a lot of experience selling homes in your neighborhood, in order to get the best and highest price. There are a few homes on the market that are sitting idle because their agents' have not helped them get their homes in sell-able condition. This doesn't help the agent either, so the whole thing boggles my mind...

The number of homes for sale (inventory) has remained flat, which continues to drive our market. This lack of inventory has helped many get into homes, while simultaneously lowing our standards by consumers buying out of desperation of loosing yet another home.

January and February tend to be slower months (but not by much), but come March things will get crazy again with military folks coming in and people starting to buy new homes that will close at the end of the school year. What does this mean for you? Use this time in Jan and Feb to find your home while the masses stay at bay until March! ;) Buy a home now, and hold onto it!

The public is encouraged to visit www.hicentral.com to see what's happening in the housing market. And, as always please feel free to call one of us at alohatony.com for real estate advice and services. We remain in the Top 100 Realtors of Hawaii and enjoy serving our clients with Aloha.

by:Chelsea Pferschy RS, MRP (808) 754-6000 chelseapferschy@gmail.com

Posted in General
Dec. 28, 2016

Interest Rates Are Up. Should I Buy?

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 thousand dollars, guaranteed, a year from now? Unless you’re a very unusual person, it’s the thousand right now, so you can do something with the money. If you forgo the money, you generally need to be paid something for doing so, for waiting — in recent history, around 2 percent a year.
2. Second is the risk of not being paid back. This is why folks with low FICO scores have to pay such high rates of interest. This obviously varies enormously. But the U.S. government has generally been thought to pay the “risk-free” rate: 0 percent for risk. 
3. The rest of the interest rate is inflation. If money is losing value and you lend it, you’re going to expect to be reimbursed for the loss.

So what do rising interest rates mean?  

When interest rates are lower, more buyers are able to borrow money. When more money is being borrowed, more money is being spent (After all, people don't take out loans to add to their savings). This increase in purchasing pumps money into the national economy. Then when consumers have been steadily fueling the economy for a while, the Fed will typically respond by raising rates. When rates are higher, purchasing slows. And when purchasing slows, so does inflation.
Therefore, interest rates rise as a result of inflation. Steady inflation is natural. It is indicative of a healthy economy. On the other hand, no inflation or deflation (the lowering of prices) is related to economic recession and depression. And so rising interest rates are a sign that our economy has been doing well. 

What does this mean for home owners? 

Inflation means your home is increasing in value, which is good. Now, with a higher home value, property taxes will be higher, but only because the home owner's net worth has gone up. The beautiful thing about a mortgage payment is that it stays the same for 30 years. Rents may go up, interest rates may go up, but your mortgage payment stays the same.

What does this mean for renters? 

Obviously, rent goes up. Healthy inflation results in higher wages, but it also results in higher everything, rent included.

What do higher rates mean for would-be borrowers? 

The most obvious answer is higher monthly payments (If, of course, you don't already have a mortgage. If you already have a mortgage, higher rates have no impact on your monthly payment). The difference between 3.5% and 4.5% on a $500,000 mortgage is $288 more per month, which comes out to $3,456 more per year. Today's borrower will pay that much more on interest than her friend who borrowed the same amount of money in June. 
Since higher rates result in higher payments, the buyer pool shrinks. Here are some effects:
1. A few would-be buyers will no longer qualify for loans and therefore will not be able to buy. 
2. Some buyers will get approved for less than what they would've got when interest rates were lower and will choose not to buy.
3. Many buyers who get approved for less will borrow what they can and buy at that price point.
4. Stronger buyers (all cash or high earners with high credit scores) will continue to buy what they want.

Why even buy right now? 

Why would anyone choose to buy when rates are the highest they've been in 2 years? Here are some reasons, below:

1. It could be worse ... in fact it has been in the past. If you've just started looking for a home this year, you may have grown accustomed to seeing interest rates between 3.5%-4.0%. Believe it or not, rates right now (at 4.5%) are still low. The average interest rate over the last 30 years is 7%, as shown in the graph above. In the late 80's, interest rates were at 10%. In 1981 (not shown on graph) the average rate was 17%! If interest rates go up next year, you may wish you'd borrowed at 4.5%.
2. It could get better. If rates go back down after you purchase, you may choose to refinance to a lower rate.
3. You still need somewhere to live. Higher interest rates don't take away the reason you were looking for a home in the first place.

You are not alone

If you buy in 2017, will you be among the many or among the few? Interestingly enough, the Mortgage Bankers Association predicts an 11% increase in new home mortgages next year, in spite of projected increases in mortgage interest rates.
TransUnion, a credit analytics company, attributes the increase to lower unemployment rates and higher household incomes. These factors should allow more first-time buyers into the game. "We believe with improved economic conditions we could see nearly 3 million first-time homebuyers in 2017," said Joe Mellman, TransUnion VP.

You would have a home 

Why buy? You would have a home. I bought my first condo in Honolulu in September and was able to have my parents over for Christmas this year. My dad complimented the job I did putting in new flooring. Mom kicked back on my leather couch and watched White Christmas while my sister and I made omelettes and cocoa mochi in the kitchen. Grandma had one long nap, interrupted only by brunch and the obligatory photo op. I told a friend about it later and he said, "That's the dream isn't it? to have your parents over at your place for Christmas."
"Yeah man," I told him, "It was a dream come true." And you can't put a price on that.
Posted in General