Re-sale Should Be Part Of Purchase Plan
March 9th, 2009 categories: For Buyers, Military
For any buyers, especially military buyer’s PCS’ing to an Oahu military base, it is very important to consider how salable a property will be when it is time to sell. Since most military transferees come to Honolulu on orders that last for 3 years, their experience of the Honolulu real estate market is an expedited microcosm of that which is experienced by regular buyers over the long term. Here are the nine things that will make it easier for you to sell when you leave our sunny shores.
1.) Location. Notice I did not write location 3 times. The location I am speaking of has to do with the actual physical attributes concerning the positioning of a property. The following may make the sale of a home more difficult.
-Backing up to a busy road.
-A lot located on a busy corner.
-Lot’s of freeway noise.
2.) Historic desirability of a location. There is always part of a town that is known to be a more desirable neighborhood. So when considering your purchase, ask you agent which neighborhoods are considered in this way. In Honolulu, Kahala is an example of one of these communities. Ever since the days of “Hawaii 5-0”, Kahala has been considered one of those neighborhoods that people want and, therefore, its property values and demand have been high.
3.) Neighborhood trends. Every neighborhood has a trend. It is either improving or declining. Evidence of decline includes home that need to be painted, poorly maintained yards, lots of cars parked on the street, yards that need weeding and mowing and graffiti. Things that point to the opposite can include, newly remodeled homes, ongoing remodeling of homes, well maintained yards, homes with fresh and crisp paint
4.) Bedroom and bathroom mix. As I write, having 3 bedrooms and 2 bathrooms is the minimum mix necessary to be taken seriously as a single family home for resale. Shift the mix to 3 bedrooms and 1 bathroom or 2 bedrooms with 2 bathrooms and the market for these houses generally becomes smaller. As for condominiums, it seems that the optimal mix is 2 bedrooms with 2 bathrooms. Change it to 2 bedrooms and 1 bath or 3 bedrooms and 1 bath and you will see a lower level of demand for these apartments. Try to target an optimal bedroom/bathroom mix and your resale should be much easier.
5.) Availability of financing. Since lenders are not supposed to “red-line” neighborhoods, as a result this issue applies mainly to condominiums more than houses. If a condominium is VA and/or FHA approved, then you will have two of the best sources for low down financing in almost any market. This available financing means that you will have a much broader market, than a unit that does not qualify for this type of financing.
6.) Exposure to traffic congestion. Certain areas of Oahu can experience significant amounts of traffic during the morning and afternoon commutes. If this is the case, a home burdened with lot’s of traffic will have a smaller market that one that does not face high levels of traffic. It is simple, more traffic equals a lower sales price and less traffic means a higher sales price.
7.) Age. With all things being equal, buyers will pay more for a newer property. Given this axiom, it is good to buy the newest property that you can afford. As an example, if you are considering two homes with being built in 1972 and the other having been built in 1995, if you were to sell wither home in 2015, the first home would then be 43 years old and the second a mere 20 years old. In 2015, again with all things being equal, I believe that buyers would pay more for the newer home.
8.) New development. Believe it or not, new development close to your home could hurt the value of a home that you purchased today. If we agree that buyers are more likely to purchase newer homes, then the existence of new product in close proximity to your home could depress its price in two ways. First, the new homes will siphon off purchasers, because of the newness of the home and potential incentives (appliances, upgrades, closing costs and financing) the developers offer. Secondly, and we have not seen it on Oahu, but it is possible that a developer could lower prices of new homes below those that they have already sold. In any case, new development can pose significant competition to your resale.
If you would like to discuss your specific real estate needs and neighborhoods that might meet them, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
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