May 6, 2009

You're planning to move to Hawaii, but when should you start looking at houses?

Most of my blog posts are prompted by questions that people ask me by email or phone. This week someone emailed me and said they are planning to move in about 8 months, wondering if they are looking at houses too soon.

You should be looking online as soon as possible, and in person about 2-4 months before you move.

As soon as you even the thought of moving to Hawaii, even if your plans are not definite, you should start looking at homes online on a regular basis, keeping track of what the market is doing in the area you like. The more time you have to look at homes, the more you'll understand our little micro markets. You'll see that homes in nice condition tend to sell quickly in most areas, and you'll be able to see the sales prices very close the list price in certain areas.  Each little neighborhood can have its own market in Hawaii, so knowledge is key to making a good purchase.

The longer you have to look at the market, the more you'll be able to get a feel for what type of homes come up for sale in certain areas. For instance, in Hawaii Kai there are only a few homes on the marina for sale at any given time. If something comes up that you really like, you might have to move on it before your time to move comes, because only a few are listed each year. Maybe 20 homes a year, which is not a lot.

In Mililani, you'll find that some homes have an ocean view, but not many, because it's about 15 miles inland. In Kailua, only a few homes a year are listed for sale that are lake front, on Enchanted lake. Or if you want Lanikai, you better start looking really early, like a year, because half the listings in Lanikai are completely junk, and the other half tend to be about $5million.

If you study the market in Oahu for a while, you'll find that in many areas, homes are each unique, because a) there were not big home developers planning this island and b) depending on type of person lived in the house, there could be a lot of strange improvements made over the years.

You just can't be overprepared when looking for a house in Oahu. The more you know, and the longer you have to learn, the better your buying experience will be. Then if you come to Oahu and spot something that you know hasn't been on the market for a long time, you'll be aware that you should act on it fast. I've had several clients who didn't act fast enough or write an offer high enough, who ended up really disappointed later.

I had one client who kept wanting to offer about $20k under the asking price, even though I kept telling him he would never get the offer accepted. Each of 3 times, his offer was flat out rejected and sold to someone else within days. Why? Because he didn't understand that the market in Oahu is not like the mainland. Our supply is limited and the sellers are very confident (in most areas, not Ewa Beach.)

So if you even have an inkling that you may be coming to Oahu in the next year or two, it's time to start watching the market. Email me all your parameters and I'll setup an automatic Hawaii MLS search for homes for you so you can keep track of what's going on.

Posted in General
May 6, 2009

When shopping for a house, it's ok (and good) to bring your kids.

Last week I was showing property to a family that has been planning to move to Oahu for some time. They are relocating with their company, and bringing 2 kids with them. For the showings, they brought their kids.

Sometimes people ask me if it's ok to bring kids on showings, and I always say yes. If you're moving from out of state, Hawaii is a new fun place that kids should learn about along with you. If you make them part of the home buying process, they're more likely to enjoy the house, and less likely to resent you for choosing a house they don't like.

Of course, kids don't have the best taste in houses, but if you let them see what you're looking at, even if you buy the house they don't choose, at least they have seen it and they're familiar with it. Moving to Hawaii is a huge life change, so anything you can do to make it easier on your kids is going to make the move easier for everyone, not just them. Unhappy kids make for an unhappy family.

You should take your kids inside the houses, and ask them questions about the house. "Do you like this one?" Maybe if you're afraid they won't like it, you can ask them something more fun, like "Do you think this yard would be big enough for a dog?" Getting your kids a pet when you move to Hawaii will make their transition easier. Think about letting them choose a pet and name it so they have a new friend they can play with and show to other kids.

Make the house buying process coincide with the pet buying process, and you may help your kids have an easier time in their new home.

Posted in General
May 6, 2009

Honolulu real estate isn't expensive, not even close.

Cost is relative. If you live in Haiti, a hamburger for $3 is expensive. If you live in North Dakota, a house for $200k is expensive. There are places around the country that are just as expensive or more expensive than Hawaii.

In Alamo California, the median home price is $1,499,795. Now that seems really high for a median price. Oahu median home prices are just $600k right now. Whoa! That's cheap :)

In Franklin Lakes NJ, the median home price is $1,337,877.
Here is one I was surprised by: Lake Forest IL has a median home price of $1,186,521. What? It's more expensive to live in IL than in Oahu? Now that just doesn't make any sense at all.

Then there is some place with the goofy name Wolf Trap VA with a Median home price of $894,122.

There are several cities in Connecticut with over a million dollars median home price. In Darien, Conn, the median price is $1,464,129. Now maybe you expected some east coast and west coast areas to have sky high prices, but you would expect Arizona? There is some city in AZ called Paradise Valley with a Median home price of $2,075,930. WHAT?

It costs about 3 times as much to live in AZ than it does to live in Hawaii? What are all these people thinking living there? They should move to Oahu!

And usually when I think of Texas, I think of gigantic houses on 10 acres for about $100k. But in a place called Highland Park, the Median home price is $1,603,608. Hello? ?

The most expensive has to be CA. A Silicone valley suburb called Los Altos hills, where the Median home price is $2,371,601. And Hillsborough, CA has the highest at a Median home price of $2,606,764. They don't even allow condos and townhouses at all. None. Just gigantic houses.

So the next time you want to complain that the prices of homes in Oahu are too high, just be glad you don't live in one of the communities above. It could be way worse. Besides, you get to live in Hawaii!

Posted in General
May 6, 2009

Hawaii has high theft, low murder. Would you rather be robbed or killed?

Is it safe to live in Oahu? I'm asked that question frequently. People say they want a safe area. As if maybe if they don't say that, I'm going to put them in the middle of a war zone. Well safe could mean many things. To me, safe means I won't get killed or attacked. Most of Oahu is very safe in those terms, meaning I probably won't get murdered.

But Star Bulletin reported this morning that Hawaii has the highest larceny-theft rate in the country in 2006 despite an 11 percent decrease from the previous year, according to statistics the FBI released yesterday.

So maybe I'll get robbed? Hawaii had an 11.9% reduction in all property crimes in '06 but still had the fifth-highest property crime rate in the country. Hawaii also had the 6th highest motor vehicle theft rate last year despite a 15 percent drop compared with 2005.

    "Fueled by double-digit increases in robberies and aggravated assaults, a 10.1
    percent increase in violent crime hit Hawaii in 2006 compared with the previous
    year. However, the state's violent crime rate of 281.2 was the 16th lowest in
    2006. And we had the fourth-lowest murder and negligent manslaughter rate in the country last year. "

Would you rather be murdered or robbed? I guess what this says is that we have a lot of poor people who want to steal your car or wallet, but they are not the violent type. Most likely the high theft is because a lot of youth grow up very poor in Hawaii, especially in Waianae. Also a lot of the theft occurs when tourists leave valuables in their cars.

As usual, The DC was the murder capital of the country. It also had the highest rates of violent crime, robbery and aggravated assault, by wide margins over the next highest. Great, so that's what the politicians do for fun. I wonder if the stats would be any different if they just took them from the capitol.

Posted in General
May 6, 2009

Have you ever considered buying Waikele real estate?

Even though Oahu is a small island of only about 40 miles across, it can be really hard to decide where to live if you haven't lived here before. Well let me make a case for Waikele.

If you've only heard of it once or twice, then you've probably heard of it in the context of the Waikele outlet mall. It's a nice little (very little) outlet mall with some nice stores like Calvin Klein and Coach. But that's not what Waikele is all about.

Where is Waikele? It's easy to miss because there really isn't much you can see from the freeway, and there isn't anything to see other than houses and a few simple shopping centers. Waikele has great newer homes that are priced much lower than East Oahu, but without the traffic of the West side of Oahu. In fact Waikele is right about in the middle of H1, which means the middle south part of Oahu. It's 20 minutes to Mililani and 20 minutes to Down town Honolulu (without traffic.)

With great golf in the community, alot of the homes have some kind of golf course view. Waikele is a master planned project, which means the streets all make sense and look orderly, with homes on nice even sized lots. A lot of older Oahu is sort of a mish mash of homes on random sized lots with random construction. Waikele offers that nicer manicured look.

If you have to commute around the island to multiple areas, Waikele can be a great option because you can get anywhere on the island within about 30 minutes (except Hauula and Punaluu. It takes an hour to get there no matter where you are.)

I like the Lowes nearby, Home Depot only an exit away, and the nice variety of homes and condos. Waikele is harder to find in the MLS and in home searches, because technically it's in the city of Waipahu, which for the most part is kind of run down.

If you want to search Waikele, the way to do it is to search for homes built since about 1980 in Waipahu. That will give you mostly homes in Waikele, because Waipahu homes are older.

Don't forget Waikele. Great homes, great shopping, centrally located in Oahu, and good prices for homes.

Posted in General
May 6, 2009

Make more money doing the same thing - move to Hawaii

Star did a great article on the average pay in Hawaii compared to other states. People talk a lot about the high cost of living here in Hawaii, but in almost every case with my clients, they are getting a nice raise to come here. So I've always thought that pay in Hawaii was more than other states overall, but today's news article confirms it.

From Star:

    Honolulu was 5 percent higher than the national average in 2006, ranking it in
    the top tier, according to the U.S. Bureau of Labor Statistics. In a comparison
    of pay in 78 metropolitan areas across the nation, Honolulu ranked No. 17 in a
    tie with Philadelphia, according to bureau economist Amar Mann. "Honolulu is
    basically in the top 20 percent, which is the highest quintile," said Mann. The
    uptick in pay, however, is counterbalanced by the higher cost of living and
    inflation here. Consumer prices for Honolulu went up 5 percent over last year,
    according to the bureau's report last month, which was more than double the 2.4
    percent gain for the entire nation."

Posted in General
April 21, 2009

Hawaii home loans just got cheaper and better.

Hawaii real estate is expensive, but it just got more affordable.  While most mainland states allow loans up to $417k at conforming rates, Hawaii has allowed up to $625,500 until this year.  Loans above those amounts were jumbo loans with rates around 6% as of last month.

This week some lenders have allowed a new maximum conforming loan amount of $793,750. Lenders can now offer that amount at about 4.5% on a 30yr fixed loan. Amazing! Homes in the $700k-$1million price range just got cheaper to buy!

Posted in General
April 14, 2009

Hawaii New Home Builders are negotiating for the first time

It used to be that new home builders in Hawaii and just about
everywhere did NOT negotiate. If you walked in and liked their model,
you could buy a house like it, and overpay for upgrades if you were
really determined to do so .

But if you ever asked them to come down in price, or change some terms,
you were told very politely, "please sign on the line and stop asking
for anything more than we want to give you."

In over 10 years in this business, I had never seen a builder willing
to negotiate, until this month. I took a client of mine over to a
builder (let's just say, in West Oahu), and we found a beautiful large
house that had a huge lot.   My client loves gardening (like me) so
this 2000sqft+ house with 10,000+ sqft of land was perfect.  But it
seemed a little pricey.

Then just as we were looking around the model, the builder's agent
offered this up: "The developer is offering to pay all closing costs,
plus a $30k credit for upgrades, plus a 2-1 buydown on the rate.  BTW,
a 2-1 buydown means your interest rate starts out 2 percent below the
market for a year, then 1 percent below the next year, then fixed for
28 more years.

But my client, still looking for a better deal, asked for more.  After
much discussion, he was offered an additional discount on the price AND
an additional credit for upgrades.

In the end the price reductions and credits added up to about 13% of
the list price of the house. So the next time you walk into a builder's
office, put on your game face.  Get as much as you can out of the
deal.  Buyer's, it's your market. Even in the builder's office!

Posted in General
April 8, 2009

We have reached the bottom. I'm serious

There are several things that led me to post an entry such as this, and I've been thinking about it for several days. This is the kind of post that can cost me a lot of credibility, but here goes.

First, on Sunday I had 50 people at an open house. It is my Aina Haina listing for $1.1million, a nice house but nothing out of the ordinary for the area. A nice pool home with 5 bedrooms and 2300sqft. I haven't had 50 people at an open house in about 4 years. Another agent in my office said he had 25 people, and the $1.2million house he is listing was in escrow last week, until the buyer found a few problems in the roof.

Also, the March stats for sales came out, and like I predicted, the number of sales jumped up significantly, while median Oahu home prices rose again to $600k. The number of listings is down again, to about 1900 homes and 2200 condos, and the number of sales was up about 20% compared to Jan and Feb.

Finally, there was this very poignant article in Forbes, which said that "The end result is that the stock market and the economy are being lifted on a sea of liquidity, giving us a V-shaped recovery. Very soon, the recession will officially end. This is not a dead-cat bounce, and it's not government spending. It's easy money, plain and simple."

Posted in General
April 3, 2009

March Honolulu real estate housing sales statistics - prices rise, sales fall

The median price of Oahu single family homes rose in March from the previous month back to $600,000 for the first time this year.  Sales continued to shrink from a year earlier.

Only 188 single-family home sales closed last month which was 33 percent less while Honolulu condo sales lost 36 percent.

The median price paid for a condominium rose 2.7 percent from the prior month to $305,000, but dropped 7.4 percent drop from the prior year's $329,300.

Oahu's real estate market is weaker than last year for last month, but seems to be picking up right now.  I have several buyers in escrow and listings are getting a lot of calls and showings.

While interest rates are super low at about 4.5% and buyers perceive that the market has hit bottom.I have received a LOT of inquiries since Feb 1st.

 The market may have hit bottom in about December.  Remember that March numbers reflect buyers that went into escrow in mid to late January.  The buyers who go into escrow this month will really drive this year's market, and those numbers won't show up until the May stats are released. 

Posted in General