Archive for May, 2008
Days on Market and Negotiating in Honolulu
May 30th, 2008 categories: Negotiating, Views of Honolulu
In my previous post on negotiating the price of a property, I state that one of the important question to ask is “How long has it been on the market?” Ah yes! The old days on market question! Days on market, or DOM, are the number of days a home has been on the market since it was listed for sale. Too many days on market should be a sign to you that a property has one or a combination of 5 different problems.
a. It is priced to high.
b. It is in poor condition
c. There is problem with the home or the neighborhood.
d. Poor marketing efforts have been made.
e. Or there is poor access to see the home.
Over the last three years, Honolulu’s real estate market has shifted from an insane seller’s market (12 to 14 days on market) to a moderate seller’s market (43 days on market at the end of April). So in May of 2008, if a property has been on the market for more than 45 days, you can assume that there are some issues keeping it from selling. Just because a property isn’t selling, doesn’t mean that the seller is all of a sudden going to become really flexible on their price. However, if a seller is going to take less it will probably happen as the DOM extends beyond 45 days. The opposite is true too.
In my experience, sellers are not very flexible immediately after a property is listed for sale. In fact, if an offer comes in too fast, sometimes a seller may believe that they priced the property too low. So if you like a property and it appears it is priced near the current market value, and it has been on the market for a short period, don’t expect to get a large reduction in the price. Consider a small reduction a major victory. Furthermore if a property doesn’t suffer from any of our 5 maladies, then expect it to sell quickly! So if you want it, plan on possibly competing for it.
In summary, be sure to determine the days on market as part of your offering strategy. Don’t rely on it solely, but be sure to get the information and add it to the mix.
By the way, today’s picture was taken on the trail above Lanikai. Since I am not a botanist, I am not sure what it is, but I found very pretty. Email me if you know what it is.
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What Price Should A Buyer offer On A Honolulu Home?
May 29th, 2008 categories: Honolulu Real Estate 101, Negotiating
This picture was taken this past weekend during a visit to Hanalei, on Kauai. The fish was interviewed and then released to his family. No fish was harmed in the making of this blog.
Buyers often ask, “What price should we offer for the property?” It seems many are looking for a rule of thumb concerning how far below the list price they should offer. There is no certain answer to this simple query. The price to be offered can be driven by many things and what follows is a list of 28 important questions to weigh when deciding on an offering price. Read the rest of this entry »
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Honolulu’s Landmark Closing…For A While.
May 28th, 2008 categories: Rants & Riffs, Views of Honolulu
One of Honolulu’s great landmarks is closing soon. The Royal Hawaiian Hotel will have a seven month $85,000,000 make over. This is great to hear because the last time I was there it still had the feeling of grandeur, but there was the sense that the time had come for a little tender loving care. The Honolulu Advertiser reported the following.
“When the Royal Hawaiian Hotel closes next month for seven months of renovations, it will be only the second time the iconic pink beachfront hotel has shut down. The first time came right after World War II, once the barbed wire was removed from the beach.”
Read the entire article by clicking here.
Combine this work with the ongoing rejuvenation of the Royal Hawaiian Shopping Center and Waikiki’s future looks very bright. This bodes well for real estate, because Waikiki is one of the main engines that drive our economy and as it goes, so shall other things.
By the way, the picture above is the Mokulua islands off of Lanikai.
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Inflation? Buy Honolulu Real Estate As A Hedge!
May 23rd, 2008 categories: Reasons To Sell
Wednesday’s news reports regarding the Federal Reserve’s concerns over possible increases in inflation may be another sign that it is a very good time to buy real estate in Honolulu. Vice-chairman of the Federal Reserve, Donald Kohn tries to articulate the Fed’s concern. Let me know if you can make sense of this quote.
“My expectations for moderating inflation and limited spillover effects from commodity price increases depend critically on the continued stability of inflation expectations,” Mr. Kohn said, in a speech to a pensions conference in New Orleans. “If longer-term inflation expectations were to become unmoored - whether because of a protracted period of elevated headline inflation or because the public misinterpreted the recent substantial policy easing as suggesting that monetary policy makers had a greater tolerance for inflation than previously thought - then I believe that we would be facing a more serious situation.”
To read the entire article click here.
In previous posts, I have discussed the reasons why I am bullish on mid to long term core Honolulu real estate values. Add inflation to this bullishness and you might want to get into Honolulu real estate and here is why.
I began my career in real estate in 1983. Our Nation was dealing with significant inflation that began in the late 1970’s and because the value of everything was shooting through the roof, real estate values were going up too. Because the bank will lend you most of the purchase price of a property, buyers were able to leverage their dollars against inflation through the purchase of real estate. If inflation does take off, today’s low interest rates allow you to lock in a very reasonable cost of money. In 1983, fixed rate loans were in the range of 18%. Imagine how happy you would have been if you had a 6% interest rate locked in before interest rates shot up.
Sincerely, for our Nation’s sake, I hope inflation is held at bay. If it does kick in, then having purchased now my make you look like a genius.
By the way, today’s picture is overlooking Lanikai from the middle part of the Lanikai Pillbox hiking trail. Double click on it to see a larger version.
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Honolulu: Best Place in the U.S. to Raise Your Family!
May 22nd, 2008 categories: Fun & Living, Views of Honolulu
Wow! Honolulu was just selected by Best Life Magazine as the best place in the United States to raise a family. Even with the high cost of living, I have always believed this to be true. I have a 14 year old daughter and a 10 year old son, I find a sense of safety that cannot be found in the mainland. It is very rare to hear of an abducted child, in fact, the last missing child I can remember occurred in the late 1990’s. We have no missing children printed on our milk cartons. Safety is one thing, but there is so much for children to do. In fact, sometimes I find my kids too busy. Still, luck we live Hawaii. Here is part of what Best Life said.
“Television executives seized the idea long ago: American families value where they plant their roots. The Cosbys had Brooklyn. The Cunninghams, Milwaukee. The Simpsons, Springfield. But fathers face reality when they’re not in prime time. They want to raise their children somewhere safe, where they can attend good schools with favorable student-teacher ratios, above-average test scores, and respectable budgets. Plenty of museums, parks, and pediatricians also contribute to a good quality of life, whereas multihour commutes, expensive houses, and divorcing friends and neighbors do not.”
Click here to read the entire Best Life article.
The picture above is an example of one of the great things about living on Oahu. This picture was taken from the Lanikai Pillbox hiking trail this past Sunday. Our island has many really great hikes, just minutes from most homes and condominiums.
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Honolulu View Home for $5,300,000
May 21st, 2008 categories: Buying Honolulu Real Estate, Honolulu Real Estate 101, Views of Honolulu
Oh the value of a view. Over the years, I have noticed that a view brings an “X” factor to the sale of a property. An “X” factor is something that brings additional value to a sale. “X” factors may not be immediately measurable, yet they are real, and people are willing to pay more for a house with an “X” factor. A view is something that makes buyers willing to compromise on their initial needs, because the view brings an emotional aspect that they want and are willing to pay for. In the past, I have seen Buyers who have had very rigid buying standards become very flexible when presented with a terrific view! For Honolulu buyers, your quality of life will be better because there is something calming and serene about a great view. From an investment perspective, when you become a seller, you should be able to sell for significantly more than a non-view home.
For Honolulu sellers, expect to sell at a higher price than non-view homes. Be sure to market your view, as it is a significant and valuable feature.
Click on the youtube video above to see a terrific view from a $5,300,000 Diamond Head home.
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Colorful Honolulu House
May 20th, 2008 categories: Honolulu Real Estate 101, Views of Honolulu
Color, color, color and more color! Color is in, in Honolulu! This home is full of color and it makes me proud to be an American because it shows our freedoms at work. There are parts of the world where a committee might visit this home for being out of the ordinary or approved color palette. Yet in most American communities, accept those like Mililani, you or I can paint our home whatever color our mind may dream.
Now for the practical view, when selling a home (this one is not listed for sale) it is a good idea to be sure the paint is fresh and clean. I recommend picking hues that are consistent with the neighborhood and that are considered up-to-date for an area. If a home with simil Read the rest of this entry »
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Shangri La view of Black Point
May 19th, 2008 categories: Views of Honolulu
Here is an unusual view of Black Point. This is taken from the beach in front of the surf spot called “Browns” and it is on the Kahala side of Diamond Head. Look closely and you will see columns of Doris Duke’s estate which now a museum and known as Shangri La. If you like this neighborhood, plan on spending $5,000,000, plus or minus a few million dollars, to get moved in.
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Honolulu Grass Shack $5,200,000
May 17th, 2008 categories: Buying Honolulu Real Estate, Views of Honolulu
Have you always wanted your own grass shack? Well here it is! For $5,200,000 you get the pool and a 5 bedrooms 5 and ½ bath house too. This home is located in Kahala and it is a whopping 5,832 square feet of living area. All of this and more rest on a 1/3 acre lot (15,669 square feet of land). Close your eyes and dream of relaxing in the pool with your beverage of choice.
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Honolulu’s Best Latte
May 16th, 2008 categories: Reasons To Sell
For me, I make the best latte in Honolulu. If you like your coffee extra hot and very strong, then you will like the way I make mine. Here’s the problem, I only make them for me or the guests in my home. If you’re forced to buy a latte in Honolulu, then the best around can be found in Kaimuki, at Coffee Talk. This great little meeting place is located at the corner of of 12th Avenue and Waialae Avenue. For clarity, if you like your latte on the “foofoo” side (ie. lots of foam, not much coffee flavor) you might find this too strong, but if you want a drink that will get your attention, it could be the perfect. While you’re there, be sure to have some of their home made baked goods (each day there is a different muffin). I like their blueberry muffins on Monday and Friday’s ginger muffin is terrific. This is another reason Kaimuki is a great place to live. Go, order, relax and enjoy.
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