The interest rate on my first home loan was 9.875%.  In my early 20's I bought my first condo and was happy that my loan was not over 10%, since I had no credit and little job history. 

To put it in perspective, if you borrowed $500,000 at 9.875% on a 30yr loan, your payment would be $4341/month.  At today's 4.5% rate, the payment is $2533/month. That's a difference of $1808. 

Now home prices are about double what they were 10 years ago, but the cost to own a house is only 31% higher, not 100% higher, due to the lower interest rates. 

Average 30 yr mortgage rate (Reproduced with permission  Mortgage-X.com)

Today           = 4.25%

Oct 2000     = 7.875%.

Oct 1990     = 10.25%. 

Oct 1984    = 13.5% !!!

Let's see how that effects our monthly mortgage payments.

House price in 2000 = $300,000.  Payment at 7.875% =  $2175/month, principle and interest.

House price today   = $600,000.  Payment at 4%        =  $2864/month, principle and interest. (31% higher)

I doubt we will ever see rates like again this in our lifetime.  In 10 years, I think people who have 4% interest rates on their mortgages will be laughing all day long, as inflation kicks back in, and we go back to the historical average, which is closer to 9-10%.  I recall in 1999 when I could get a 10yr CD at my bank that paid 10%.  

The government is printing money.  Nations are racing to the bottom with their currencies.  The Fed has said they want inflation, even though it already exists when food and oil prices are included in CPI.  The Fed is creating inflation by printing and spending money buying their own debt,  under the guise of "quantitative easing." Read: "we have to pay for everything somehow."  

You may want follow suit and borrow as much money now as you can (within your budget, without over extending.)  As soon as inflation starts really ramping up, that money may seem like it's free. 

Today's rates from a local lender:

Loan Program   Interest Rate      Points       
30 Year Fixed     3.875%           2.250
30 Year Fixed     4.500%           0.000
30 Year VA         4.250%           -0.250
30 Year FHA       4.250%           -0.250

In June I listed this nice 2 bedroom Kailua condo at Poinciana Manor $350,000. This morning the patient buyer finally closed for $356,000, the price approved by the lender.

People always want to know how long short sales take, and the answer is apparently.... about 4 1/2 months. I've had some short sales take about 8 months, and others about 6. This is actually the fastest I have ever had one close.

To be able to buy a renovated 2 bedroom condo in Kailua town for $356,000, just a few minutes bike ride to the beach, is pretty amazing.

Congratulations to my sellers, who are thrilled to be done with this saga. Various financial difficulties meant that the short sale was their best opportunity to be get out from under a mortgage they no longer could afford. Like so many other Americans, the economy, the market, and in this case, their job transfer, made it impossible to stay. They are now very glad to be pa`u!

The Harris poll released their latest results and found that Hawaii is the 2nd most desired State to live in.

From their site: "Notwithstanding its economic and political problems, more Americans would like to live in California than in any other state. For the seventh time in a row since 2002 California tops the list of states where the most people would like to live if they did not live in their own states. The next most popular states are Hawaii, Florida, Colorado, Arizona, North Carolina, Oregon, Texas, New York and Washington."

Well, since California will be bankrupt soon, and overrun by illegal immigrants within a few years, I think it's safe to say that Hawaii is probably the place that most Americans would like to live. Not surprisingly, people over 46 chose Hawaii as #1 instead failing California.

The good news is, homes in Hawaii are cheaper than areas of California like Orange County, LA, San Fernando Valley, San Diego, the Bay Area, Santa Barabara, etc. And since Hawaii property taxes are about 1/8 of CA taxes, it's actually a lot cheaper to live here than you might think.

So what are you waiting for? It's a free country, anyone can live in Hawaii!

The Star reported this morning that a new study confirms Vog (volcanic fog) causes resperatory problems, among other things. 

"The risk of upper respiratory problems increased significantly on the
Big Island during high vog events -- and children were the most
sensitive to the bad air -- according to a new study that compared
clinic visits in communities hardest hit by volcanic emissions before
and after a new Kilauea vent opened in March 2008."

"It found that during thick vog there was a sixfold increase in the
number of people with acute airway problems that required emergency
care, up to 300 percent increases in severe sore throats and headaches,
and a 56 percent increase in people with coughs."

Bottom line - people have been moving away from the effected Big Island areas, like Kona. I have had clients call me from the Big Island looking to move over to Oahu.  Here on Oahu we have hardly any vog at all, except on the rare days when the Trade Winds stop blowing.  That only happens about 20-30 days a year.  (Just a guess on my part). 

The reality is that breathing the Vog in Kona feels a lot like living in LA.   Want clean, fresh, ocean air to breathe?  Come to Oahu! 

I've written about the Waikiki Landmark before, but after spending nearly an entire week viewing Waikiki Condos with a client of mine, I think the Waikiki Landmark is back at the top of my list.

You might think of Waikiki as full of condos, but if you're looking for something very nice or luxurious, there aren't too many choices.  First of all, if you're thinking of Ko Olani, Hokua, or Nouru Towers, or Yacht Harbor Towers, those are all in Ala Moana.

This week we viewed several units in the $600k-$800k range, with at least 2 bedrooms, 2 full baths, 2 parking stalls, and 1100 square feet.   We visited several buildings including Waipuna, The Windsor, the brand new Allure, Lanikea, and a few others in Ala Moana as mentioned above.

After much searching around, we found a great unit at the Landmark with 1308 square feet and a 170 square foot lanai.  It has a great view of the Manoa valley, the Ala Wai Canal, and a little peak of the ocean.  Here is the view of the pool and the canal. The Landmark has one of Waikiki's best swimming pools, maybe the best. 

The Landmark was Built in 1992, at the top of the Japanese bubble, so even though it was constructed to be the best building in Waikiki, the prices have never reflected what the builders hoped for.  Now that they are 18 years old, some of the units at the Waikiki Landmark feel outdated and are a little too simple—particularly in
the kitchens.  It's now time for all the units to be renovated, and so the values in the building are probably lower than they could be. 

My very happy client is now in escrow on unit 1902, listed at about $737,500.  At the height of the market, this unit would have sold for around $900k. 

 Congrats to my happy buyer. Enjoy your new home Nancy! Here is her new living room!

Kona Coffee is one of my favorite truly locally grown Hawaiian products. The good folks at Kona Comfort coffee help me get out of bed in the morning with their freshly roasted Kona beans, and I thought I might just give a little help to a company I really believe has a great product - way better than anything you can buy from a big nationwide brand.  

Kona coffee is grown on the slopes ofHualalaiandMauna Loain the North and SouthKona Districtsof theBig IslandofHawaii. It is, in fact, the only place that coffee grows in all of America as it is the only land we have that falls in the coffee belt. The incredibly rich volcanic soil combined with Hawaii's sunny mornings and cloudy afternoons creates just about the best environment this world has to offer for growing coffee beans.

The big island of Hawaii is called "big" because it's about 5 times larger than the other islands of Hawaii.  Still it is a relatively small chunk of land just over four-thousand square miles, and, as I mentioned above, the beans only really grow on one side of two hills on the whole island. This means true Kona coffees are really limited in supply and the prices elsewhere in the world will reflect just how special this coffee is.

As for roasters, the people at Kona Comfort are really good at what they do.  When I order from them, the coffee is so fresh that nothing else can compare. They roast the coffee in small batches so that it's always fresh and although that might sound like marketing mumbo jumbo, they literally roast the beans one day and ship them to you the next. If you order coffee from Kona Comfort, you can be drinking it within 24 hours of the beans coming out of the roaster, no matter where you are in the States.

You might have tried Kona coffee blends, which are usually made up of about 10% Kona beans and mixed with other beans from Columbia, Brazilian or any other country in the coffee belt.  Read: totally bogus.  But Kona Comfort is 100 percent Kona beans, all the time.

Unlike some of the larger brands, Kona Comfort has a decisively stronger but not burnt taste.  They manage to give a unique and really delicious flavor to one of the world's rarest and most sought after coffee beans. And they do all this using 100% USDA certified organic Kona coffee beans.

All that stuff is great. True, the product is unbelievable, but what really strikes me is their customer service. This week I got a hand written letter of thanks on the back of my receipt and every time I deal with them, it always seems like a very personal experience; much more so than from other coffee roasters. These are good people who make a quality product and I recommend you give them a try.

Here they are:Kona Comfort

I just got a call from a client that has owned a house for 25 years.  He plans to sell next year and asked what he should do - leave the house has is or do some remodeling and then sell?

The answer is almost always to do some inexpensive remodeling. If the house is in the median range between $500k and $1 million, you will almost always get more money by spending some money. That's because buyers want to get paid for their time if they have to remodel a house after they buy it. They don't just add the cost of the work and subtract from the market.

But another important factor is the time it takes to sell.  A home that is in good condition will usually sell faster. A home that need a lot of work may never sell at all.   Listings that sell fast also usually get near full price, or in today's market, even over asking price. 

My client and I discussed some inexpensive things he could do to his house.  Here they are in no particular order. 

• Replace his 25 yr old carpet with bamboo flooring. It's cheap at under $1 a foot, and it's sustainable. Bamboo grows fast. For a 1500sqft house, you could install it yourself and spend very little money.
• Paint.  Inside and outside can be painted for a few thousand, and can make or break a buyer's willingness to purchase.
• Replace his bathroom vanities for a few hundred dollars each.  Even a cheap, off the shelf vanity for $300 can make the house seem a lot nicer. This vanity to the right is $199 at home depot.
• Replace his kitchen counters and cabinet doors with off the shelf non custom products for about $3000 total.
• Replace all the doorknobs, fixtures, switches, outlet covers, etc.  25 years ago, those things were ugly.  Now you can buy them online for a few bucks each.  

At this point a seller has spent well under $20k, and the house is transformed.  The list price can probably go up by $50k, and the house will sell in a few days instead of a few months. 

Bottom line - spend the money to make your house look nice, but don't overspend on it.  

Congratulations to Rick and Pat on the purchase of this beautiful ocean view property at the top of Hahaione.  With over 4000 square feet and 6 bedrooms, this awesome house has plenty of space for their soon coming wedding party.  This property borders the preservation land above Hahaione, so you have no neighbors in the back, and acres of tree lined forrest to enjoy. Check out the view from the living room!

There is even a detached cottage for their daughter to live in, with its own kitchenette, full bath, and separate laundry.  I was very happy to  deliver their keys this week as they move in to their great new home! 

Via PBN: Wahoo's Fish Taco will open a second location on Oahu by the end of the year in the Kahala Korner building near Kahala Mall. The previous tenant, The Green Door, moved out of the space in 2009.

Owner Noel Pietsch told PBN that the second Wahoo's will have a full bar and is anticipating hiring approximately 40 people.

I first tried Wahoo's fish tacos in the late 80's in California.  Great tacos, and really great rice and beans.

In the past few years, Oahu has gotten many mainland retailers to setup shop here.  Whole Foods, Target, Victoria Secret, Bed Bath and Beyond, and Taco Del Mar. 

All we need now is In-N-Out.  Anyone?  A little help here?