Archive for April, 2008
Maui Condos Are Hot
April 10th, 2008 categories: Rants & Riffs
Check out this article in the Honolulu Star Bulletin regarding the rise in Maui condo prices. Prices rose to $538,500, compared to $469,500 for the same period last year. Even though there is no direct relation between the Maui market and Honolulu real estate, I believe it is good for Honolulu values to have a strong Maui market.
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Chinese Money Strengthens Against The Dollar
April 10th, 2008 categories: Buying Honolulu Real Estate
Yesterdays Wall Street Journal noted that the Chinese Yuan strengthened against the American dollar. A weakening dollar can mean increasing costs for consumers (this is not good). However, as it relates to demand for Honolulu real estate, this may translate to more buying power the growing Chinese middle class and, over the mid-term, I will not be surprised to see a number of these foreign nationals finding interest in Hawaii real estate.
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Closing & Signing, What Do They Mean in Honolulu Real Estate?
April 9th, 2008 categories: Buying Honolulu Real Estate, Reasons To Sell
In some states closing a real estate transaction is very different from closing a sale in Honolulu. I am told that in other areas closing is when the buyer and their attorney and seller and their attorney meet to finalize the sale. At the end of this meeting, the buyer walks away with a deed signed by the seller and the seller ends up with a cashiers check for the purchase price. I have heard stories that this can be a harrowing and traumatic experience because a great deal of the transactional negotiating occurs at this get together. Hawaii closings are almost exactly the opposite.
The Purchase Contract is the governing document in the sale of real estate in Hawaii. Therefore, most of the negotiating occurs on the front end of the sale offer and counter offer process. Closing happens between 8:00 and 10:00 in the morning, this is when the deed or assignment of lease is recorded at the Bureau of Conveyances. Once escrow is notified that the deed is recorded (ownership has transferred to the new owner), it releases the sale proceeds to the seller. The buyer and seller don’t need to do anything on the morning of the close; the transaction will close with little effort or fan fare. So when is the deed signed and the buyer’s money deposited with escrow?
All of the closing documents are signed a minimum of 3 to 4 days before closing (also know as “Signing”). This means that the buyer and seller will meet with the escrow officer to sign and notarize all of the closing documents (preliminary title report, closing statement or HUD, the deed, mortgage documents, FIRPTA affidavit, HARPTA affidavit and other documents). The appropriate documents are sent to the State Bureau of Conveyance for review and preparation for recording. All in all, signings should take about a half an hour and are rarely other than cursory.
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Termites in Honolulu Real Estate?
April 8th, 2008 categories: Honolulu Real Estate 101, Negotiating
If a termite could eat wood, how much wood could a termite eat? Well, it depends whether or not the termite is of the ground variety or from the tribe of the dry wood termites. The latter can still eat you out of house and home, but it will take a lot longer than the former. Believe it or not, what you see to the left is what remains of a significant beam (4×8 or maybe a 4×10). Note that the beam is completely hollowed out. The interesting part of this discovery was that the house had no other signs of ground termite infestation. Normally, when there is this magnitude of damage, one can see evidence of the critters all over the house.
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Regency at Kahala Condominium
April 7th, 2008 categories: Honolulu Condominiums
The Regency at Kahala was built in 1969 and is the only high-rise condominium on the ocean side of the freeway in Kahala. There are many desirable things about this building and here are a few that set it apart from most.
1. All of the units are some of the biggest (square footage wise) on Oahu. See the unit mix and sizes below.
Unit A 3 bedrooms & 2 bathrooms 1,830 square feet
Unit B 1 bedroom & 1 bathroom 1,081 sqaure feet
Unit C 2 bedrooms & 2 bathrooms 1,619 square feet
Unit D 2 bedrooms & 2 bathrooms 1,619 square feet
2. It is one of the few (2 that I can think of) buildings that have a doorman.
3. There are only four (4) units per floor. Which means you will have fewer neighbors (theoretically it should be quieter than a building with 16 units per floor) and each unit has windows on two sides
4. It is behind Kahala Mall and, therefore, walking distance to Macy’s, California Pizza Kitchen, Chili’s Restaurant, Starbucks, Jamba Juice, Barnes and Noble, an Apple Computer Store and a eight-plex movie theater. Kahala Mall will soon have a Whole Foods Market too.
5. The freeway on ramp (going to downtown or Hawaii Kai) is less than ½ mile from its driveway.
6. It is within the Kahala Elementary School district and this is one of the more desirable public schools in Honolulu.
7. Given the age of the project, many units have been remodeled and, if they have not, then you will be able to remodel your unit to your tastes.
As of this writing, there are a few units on the market with all of them asking in the $800,000’s for a 2 or 3 bedroom unit. All of them could use a good remodeling. In the last three years there have been sales in the $1,200,000 to $1,350,000 range for high floor units. See the attached market analysis for more detailed market information.
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Book’em Danno!
April 7th, 2008 categories: Fun & Living
Hawaii Five-O did a great deal for familiarizing the world with Hawaii. We owe a debt to Jack Lord, who played Steve McGarret, who knows maybe he’s the reason Honolulu real estate values took off! Here’s a recent article on the sale of his leasehold apartment on the beach in Kahala.
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Surveys and the case of Encroachments in Honolulu
April 7th, 2008 categories: Honolulu Real Estate 101, Negotiating
One of the issues that can be shown on a perimeter survey is called a encroachment. In layman’s terms, an encroachment is when a wall, gate, pool or some other improvement crosses the property line. This can be an improvement from a neighboring property coming onto your property or from your property going onto a neighboring lot. What to do?
First, it needs to be determined if the encroachment is de minimus and in Honolulu residential real estate this means that it is six (6) inches or less (HRS 669). If it meets this standard (de minimus) then the Purchase Contract calls for no further action. If it is greater than six (6) inches, and C-42 and C-43 of the Purchase Contract apply, then the seller is obligated to do one of two things: Read the rest of this entry »
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Honolulu Real Estate Is A Great Long Term Investment!
April 4th, 2008 categories: Buying Honolulu Real Estate, Honolulu Real Estate 101
Given all of the news regarding the economy, sub-prime loans and real estate prices a great rhetorical question is “Why buy Honolulu real estate now?” To me, the real question many buyers are asking is “Aren’t prices going down in Honolulu and shouldn’t I wait to get a better value?” My answer is always, it depends.
If you want to make money in real estate over the short term, then you should not ever buy! No one knows what real estate values will do, especially over short periods of time. Could values be lower a year from now? Sure they could. Could they be higher? Sure they could, but I wouldn’t bet on it. Over the short term real estate can make you look like an idiot. However, over the long term it can make you look like a genius.
Here is a real life example. In 1994, I purchased a leasehold 1 bedroom 1 bathroom unit at the foot of Diamond Head, in a building called Diamond Head Gardens for $185,000. I proceeded to remodel the unit at a cost of approximately $20,000, so my initial cost of the unit was $205,000. Within 2 years similar units were selling in the range of Read the rest of this entry »
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Surveys…We Aren’t Talking A Gallup Either!
April 3rd, 2008 categories: Reasons To Sell
Real Estate across the United States is driven by custom. For example, in Southern California residential real estate, a house lot is almost never surveyed by a licensed surveyor. In Honolulu real estate it is customary for a home a lot to be staked and surveyed by a licensed surveyor (see C-41, C-42 & C-43 of the Purchase Contract). The stakes show where the corners of the lot are located and the surveyor then sites the perimeter boundaries of the parcel. He is looking for any walls, side walks, or other improvements the may be on, across or close to the property lines (both on the subject lot or from any neighboring lots). He then draws a map (not to scale), which reflects the position of any relevant improvements and writes a letter describing them. Look for a later post regarding problems that can result from this survey.
How much does a perimeter survey cost? For a lot smaller than 10,000 square feet, expect to pay $800 to $1,500. Also, be aware that a price from more expensive firm can be in the $2,500 to $3,000 range. These prices assume that the property is located in a neighborhood that has been regularly surveyed. Since this is an island, some neighborhoods have irregularities in the location of property lines and for these areas, a survey can be difficult and expensive. If you need a survey be sure to get bids from at least two reputable surveyors.
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The Chinese May Be Coming to Honolulu Too!
April 3rd, 2008 categories: Buying Honolulu Real Estate, Reasons To Sell
For the last several years, I have been waiting for the newly minted Chinese middle class to discover Hawaii. Based on an article in Pacific Business News concerning a recent agreement between our two governments, Honolulu may soon see more arrivals from China. According to Tina Yau in the Shanghai office of Hawaii Tourism China “No matter if it’s a West Coast or East Coast package, for sure they will include Hawaii.”
Also, a Honolulu attorney that I know who moved to China a few years ago, believes that Hawaii will be very attractive to Chinese investors. He thinks it will be a few more years before they start arriving in significant numbers. Anyway, this bolsters my long-term bullishness for Honolulu real estate.
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