Archive for May, 2009
Honolulu Coop Flip Tax?
May 28th, 2009 categories: For Buyers, For Sellers
I had a conversation with a person in New York City and I surprise to learn that cooperatives charge a “Flip Tax” when a unit in the building is sold. Apparently, if you own a cooperative in the City, the coop will paid a percentage of the sales price as a so-called “Flip Tax”. The logic behind the fee is that all of the residents of the building have maintained the condition of the project and therefore they should participate in the profit of your sale. I Googled “Flip Tax” and by golly it checked out.
“A flip tax is a fee paid by a seller or buyer on a housing co-op transaction typically in New York City. It is a transfer fee payable upon the sale of an apartment to the co-op. They are thus not taxes, in the sense that they are not paid to governments.”
CLICK HERE TO READ THE WIKI
CLICK HERE TO READ A LEGAL EXPLANATION OF FLIP TAX HISTORY
If you are moving to Honolulu and are wondering whether or not we have a “Flip Tax”, I am happy to report that we do not have one and may we never see one too!
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If you would like to discuss your real estate needs, 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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Old Sayings That Aren’t So Old!
May 27th, 2009 categories: For Sellers
There are old sayings in the Honolulu real estate business, some are true and others are not. Here are a five that I have found apply.
1. “Your first offer is your best offer!” I have sold and observed the sale of thousands of properties and more times than not, the offer that gets the seller the most money is the first offer to come in. Time and again an offer will come in early in the sales process, the price is not quite what a seller wants and a counter offer issued. After some negotiating, Read the rest of this entry »
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Confidence Good For Honolulu Real Estate
May 26th, 2009 categories: The Market
Never fight a self-fulfilling prophecy! Today’s Honolulu Advertiser is reporting an increase in the Consumer Confidence index, the stock market is responding in a positive manner and many economists are saying the worst is behind us.
“The size of the monthly increases in April and May in consumer confidence encouraged economists. Gary Thayer, chief economist at Wells Fargo Advisors, says that unless the economy suffers from major financial shocks, it looks like “we’ve turned the corner” on confidence.”
CLICK HERE TO READ THE HONOLULU ADVERTISER ARTICLE
The ongoing reporting of bad news led us into this recession and, guess what, the opposite will hold true too. The more good news we see reported the more confident we will become and the better the economy will get. Is it just me or are we seeing more positive news being reported? What does the mean for Honolulu real estate?
Here are three possible initiatives from the building confidence.
1. As consumer confidence improves, buyers will be more comfortable buying and we should see quite a few homes sell this summer.
2. Add in very low interest rates and there is more impetuous for homes to sell.
3. Combine these with pent-up demand being released by the longer selling days of summer and we should see prices firm over the next few months.
The only question in my mind is this. If the bottom has been met, then how long and how strong would a recovery last? Time will tell.
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If you would like to discuss your real estate needs, 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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Death By A Thousand Cuts!
May 21st, 2009 categories: For Sellers
Like most municipalities, the City and County of Honolulu is falling short on the income side of budgetary planning. In other words, they have more expenses than they have income. Rather than cutting services, the City Council is attempting to increase property taxes. Yesterday’s Honolulu Advertiser reports. Read the rest of this entry »
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When Down Is Up!
May 20th, 2009 categories: The Market
News sources are reporting that housing starts, on the whole, have dropped significantly. Yet read into the numbers and you find a different story. The majority of the drop has been in apartment construction, but new home starts have increased!
“The decline was wholly the result of a sharp drop in ground-breaking for apartment buildings and other multifamily dwellings. Single-family home construction rose 2.8% to 368,000 in April, after rising slightly in March as well.” Read the rest of this entry »
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Beautiful Honolulu Vintage Home
May 19th, 2009 categories: Rants & Riffs
Burbank Street in Nuuanu is off of Wyllie, just past the Girl Scouts Hawaii Headquarters.
If you blink you might miss it. I was there earlier today and saw this fine example of a Nuuanu charmer. Note the curves in the roof, the top of the grand living room window and the porch. Vintage homes show so much more craftsmanship, as an example take a look at the round attic vent at the front of the home. If you are ever in the neighborhood Burbank is worth the excursion.
CLICK HERE TO SEARCH FOR YOUR NEW HOME
If you would like to discuss your real estate needs, 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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Is Taxing The “Rich” The Answer?
May 18th, 2009 categories: Rants & Riffs
The Hawaii State Legislature raised the top income tax rate in Hawaii to 12% last week. News reports say that the increase gives Hawaii the highest state income tax rate in the Nation. The Governor vetoed the bill and our elected officials over-road her denial. This begs the question, is raising taxes on the wealthy going to improve our local economy? Today’s Wall Street Journal on-line had an excellent article that may hold the answer.
“Here’s the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.”
CLICK HER TO READ THE WSJ ARTICLE
I know what your thinking, what does this have to do with Honolulu real estate? I think it could have a direct effect, at some point upper income individuals could say, “I love Hawaii, but it is not worth putting up with the tax burden!” At which point they pick a Sun Belt state that has a more favorable tax structure. They then take all of their marbles and expertise to benefit another state and guess what, Hawaii loses out! Real estate could be hurt by this movement as there could be fewer resident buyers for upper end homes.
Upper income individuals are generally the engines that drive job creation, private enterprise and prosperity. We can’t do anything about this tax increase until the next legislative session or maybe the next election, but it is time to “throw the bums out!”
| Discussion: 1 Comment »
Hidden Honolulu Neighborhoods
May 11th, 2009 categories: For Buyers, Neighborhoods, The Market
Pacific Business News has an excellent article on a few of Honolulu’s lesser known neighborhoods.
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Housing Market Bottoming?
May 8th, 2009 categories: For Buyers, For Sellers, The Market
This mornings Forbes.com had an article written by Robert Lenzner, a forecaster at Economic Cycle Research Institute. He is bullish on the stock market and home prices.
“Housing prices have hit bottom–and the economy is in the midst of shifting dramatically from a 6% annualized loss in GDP to a 4% gain by the end of 2009. That is a 10% turnaround–with a value of $1.4 trillion more economic activity. Not even the Obama administration is predicting 4% growth by year end. If correct, it could put a dent in the expected budget deficit next year.”
CLICK HERE TO READ THE ENTIRE POST
Frankly, I threw my crystal ball in the trash last year, but I am noticing more economists are predicting a bottoming in the market. Hopefully, this is the case and, if it is, this may be a very good time to have purchased real estate in Honolulu.
CLICK HERE TO SEARCH FOR YOUR NEW HOME
If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
| Discussion: 1 Comment »
Home Valuation Code of Conduct
May 7th, 2009 categories: For Buyers, For Sellers, Rants & Riffs
As of May 1, 2009, new rules have been put in place to try to curb pressure on appraisers to arrive at higher values for properties. With all the issues arising from the sub-prime mortgage mess, at first blush, it sounds like a really good idea. However, like most things done by the Government, this appears to be taking a shotgun to kill a fly. CNBC reports the following.
“But don’t talk to an appraiser or a mortgage broker about it, or you’ll get an earful. Most of them claim it was crammed down the collective throat of Fannie and Freddie by the very powerful Mr. Cuomo, and that it puts good solid appraisers out of business, complicates the loan process for mortgage brokers, and inevitably hurts consumers.”
CLICK HERE TO READ THE CNBC POST
Here is the reality. By not allowing communication with an appraiser, the new rules are hurting consumers. There is no absolute market value for a particular Honolulu home or condominium, there is an upper and lower range of value. If an appraiser is not familiar with an area or if their value cannot be questioned, then low appraisals could end up blowing perfectly good sales. Most sales are subject to the buyer and property qualifying for the financing, so if the appraisal leads to a cancellation of a sale the majority of buyers should be able to cancel the sale and have their deposit returned. But the buyer will have spent money on a professional inspection ($300-$500), appraisal ($500) and other fees associated with the process of buying a home. Upon cancellation these fees will not be returned. Add to this the emotional cost of falling in love with a home and the three to four weeks to find out that the appraisal went badly, and I think there needs to be modifications made to the Home Valuation Code of Conduct.
CLICK HERE TO SEARCH FOR YOUR NEW HOME
If you would like to discuss your real estate needs, 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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