Archive for the 'Honolulu Real Estate 101' Category
Attack On Property Rights
October 6th, 2008 categories: Honolulu Real Estate 101, Rants & Riffs
There are two goals with this blog. The first is to inform and the second is to rant. A recent Honolulu Advertiser article outlined a new law, Act 228, which adds another level of work for obtaining building permits for properties that have a home or structure 50 years or older (it applies to residential and commercial properties).
“Act 228, which took effect in July after little public input, requires that property owners submit black-and-white archival prints to the State Historic Preservation Division of the Department of Land and Natural Resources before county building permits can be issued for work on buildings at least 50 years old.”
This banana slug reflects what I think about this law
Essentially, if your home is 50 years or older, you must submit a full set of photos to the State’s Historic Preservation Division. The Division then decides whether or not there are any historic aspects of the structure that are historic. What happens from there is unclear as there are no written rules? The historic aspects could have to be documented, removed and/or preserved. Is it possible that a property could be too historic to allow for any further change? I don’t know, but we are dealing with government and anything could be required.
So here is the rant! Our freedoms are tied to many things and one of them is our right to private property. Hawaii already has one of the most onerous permitting processes in the Nation and this further encroaches on our right to utilize our property as we see fit. I am getting tire of Government expanding its reach into our lives. Leaving the constitutional aspects aside, there is a financial aspect that will ultimately add additional cost to housing.
“Historic Preservation is supposed to assess whether a property has historical significance, and depending on its findings can either permit work to proceed or initiate a plan to preserve, salvage or document historic features. The agency also has the power to purchase property through condemnation if an applicant and the agency disagree over preservation action.”
Let’s say a couple purchases home in Manoa that needs an addition and a complete remodel. Assume that they barrowed $500,000 and their monthly payment (PITI) is approximately $3400 per month. They close the sale and it takes 30 days to get the photos submitted to the Historic Preservation Division and they take 90 days to review and approve the photos (the Division is saying 60 days, but we’re dealing with Government…right?). Here is how the costs might break down.
4 months mortgage ($3400/mo) $13200
Archival Photographer $500
Architect (10 hours/$200 hour) $2000
Miscellaneous $500
Total To Comply With Act 228 $16,200
In my opinion this is government bureaucracy at its worse! The cost of home-ownership in Hawaii is out of control and it is not fair to place this burden on the taxpayers. Let’s hope that this law is repealed, revised and/or simplified. The following are a few of the tasty quotes from the article.
“Potentially affected are roughly 100,000 homes in the state, according to the latest Census Bureau estimate of Hawaii’s housing inventory built before 1959. Commercial and public buildings also are included.
The city Planning and Permitting Department is telling the public to expect a delay of up to two months for processing a permit if their property is 50 years old or more.
Local architect Glenn Mason, whose specialty is historic building preservation, said it’s ridiculous that any building more than 50 years old needs to be documented with archival photos before a building permit can be approved. He also said it’s unconscionable that the law is being enforced without specific rules to follow.”
CLICK HERE TO READ THE HONOLULU ADVERTISER ARTICLE
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Be Sure To Inspect Your New Home Too!
October 3rd, 2008 categories: Honolulu Real Estate 101
West Oahu has quite a few homes, townhomes and condos that have been newly built. The Wall Street Journal has an excellent article that warns you to inspect your newly built home (in spite of the fact that it is new construction).
“Rob Ringen, a Sonora, Calif. home inspector, estimates that 80% of the repair work that new home owners have to do today can be traced directly to poor-quality materials like twisted and split framing, and short-cuts on installation, like missing flashing over windows that allows rain to leak in. And since building code inspectors are being laid off in the downturn, and remaining ones overworked, such problems often slip by. “Homeowners get it right in the neck,” says Mr. Ringen.”
CLICK HERE TO READ THE WALL STREET JOURNAL ARTICLE
OTHER POSTS WORTH READING!
Honolulu Rental Rates
Loans For College Condos
The Value Of A Realtor
Realtor Code of Ethics
Determining Offering Prices
Pricing Your Home
Long Term Investment Makes Sense
Honolulu Schools
| Discussion: 1 Comment »
Honolulu YTD Real Estate Statistics
October 2nd, 2008 categories: Honolulu Real Estate 101, Rants & Riffs
This morning’s local newspapers are doing their best to find the negative news in the recently released Honolulu Board of Realtors Statistical Report for September 2008. With all of the bad news in the last two months it is not surprising that median prices have come down. Houses and condos were both back to prices that have not been seen since 2005 ($590,000 and $296,000 respectively).
A little beauty to relax you.
Part of me (the smart-blank part of me), says 2005 was a great year. But the serious section of my brain must put this information into the context of the day and I will concur that a drop in these values is not good for those of you who are selling. However, the guys and gals at the printed media took the low hanging fruit and failed to see some significant information. Here are a few facts that are positive. Read the rest of this entry »
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Different Insurance for Luxury Homes!
October 1st, 2008 categories: Honolulu Real Estate 101
$7,499,000 home for sale in Diamond Head area.
Given the number of luxury condos and homes in Honolulu, the way they are insured can have a significant impact on a future claim. Valerie Fitzgerald, of Coldwell Banker in Los Angeles, has an excellent blog post that talks about how a luxury properties should be insured differently that your normal track home. Read the rest of this entry »
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Seven Sins Of Selling Yourself
September 30th, 2008 categories: Honolulu Real Estate 101
Okay they aren’t sins, but I got you to read the post! Forbes on-line has a very interesting article regarding 7 things to consider when you are thinking about selling your home yourself (without an agent or broker representing you). All seven issues should be weighed before you place an advertisement and put the sign in front of your home. I found the comment concerning negotiating to be powerful.
“Remember that you may be up against professionals who are keep (sic) negotiators and know the sale process very well. As such, they may suggest all sorts of terms and conditions that sound reasonable but really aren’t in your best interest. Even an unseasoned real estate agent is likely to be aware of the implications of various terms and conditions - will you?”
CLICK HERE TO READ THE ENTIRE FORBES ARTICLE.
An issue that is not covered (okay maybe obliquely) has to do with ongoing liability once the sale is closed. In Hawaii, sellers are obligated to disclose material knowledge concerning the property, neighbors and neighborhood. A buyer has two years from discovery of an undisclosed issue to come after the seller. A good broker can help by making sure all of the proper disclosures have been made. Furthermore, if after the fact there is an issue, most reputable firms maintain errors and omissions insurance. This insurance can be called on to help a seller. Seriously, if you are thinking about representing yourself in the sale of a Honolulu condo or house, then my recommendation is to bring in a professional. You have way more to lose by accepting the liability of the sale.
OTHER POSTS WORTH READING!
Honolulu Rental Rates
Loans For College Condos
The Value Of A Realtor
Realtor Code of Ethics
Determining Offering Prices
Pricing Your Home
Long Term Investment Makes Sense
Schools
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California Improvements Could Help Honolulu
September 29th, 2008 categories: Honolulu Real Estate 101
Classic Coconut Ave. Kamaaina home
Hip, hip, hooray! California is generally considered a bell weather indicator for real estate and the economy. A recent article in Pacific Business News shows that California’s number of months of remaining inventory and the days on market have dropped significantly as compared with August 2007. This bodes well for Honolulu home and condo sales because as California improves, this improvement will translate to Hawaii.
“The unsold inventory index for existing, single-family homes in California during August dropped to 6.7 months from 10.6 months for the same period a year ago, according to a report Thursday by the California Association of Realtors.
The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
The Realtors’ organization said the median number of days it took to sell a single-family home was 47.3 days in August, compared with 54.7 days in August 2007.
The August report showed sales were up 56.7 percent statewide while the median home price fell 40.5 percent.”
CLICK HERE TO READ THE PBN ARTICLE
There are many moving parts in the current economic environment and this report could foretell a bottoming market. If I am right you heard it here first! If I am wrong (and I could be), then I am wrong.
Other Posts Worth Reading
Honolulu Rental Rates
Loans For College Condos
The Value Of A Realtor
Realtor Code of Ethics
Determining Offering Prices
| Discussion: 2 Comments »
Silver Lining To A Dark Cloud For Buyers
September 26th, 2008 categories: Buying Honolulu Real Estate, Honolulu Real Estate 101
Diamond Head Light House
An article posted at Bloomberg.com is divining that the Federal Reserve may be close to reducing interest rates. Rates are already very low and any additional reduction in interest rates should push buyers off of the waiting to buy fence.
“Federal Reserve Chairman Ben S. Bernanke moved closer to cutting interest rates, signaling that risks to U.S. growth are greater than policy makers saw them just last week.
The “intensification” of the financial crisis in recent weeks is curbing Americans’ access to borrowing, making the outlook for consumer spending “sluggish at best,” Bernanke told lawmakers in Washington yesterday. While he noted that risks to inflation remain, the Fed chief’s testimony focused on “grave threats” to the banking system.”
CLICK HERE TO READ THE ARTICLE
I find it interesting that a person who is now renting would not buy in this market. Values and interest rates are down, inventory is up and the negotiation process generally favors buyers. Yes, I acknowledge that all of the financial market upheaval can be seen as disconcerting, but a person has to live somewhere. Why not take control of your life and use the rent you are already paying to buy something that positions you for economic betterment?
On a final note, I have always been and always will be a “Bull” on core Honolulu homes and condos, so add the fact that a buyer can get into a great long-term market like Honolulu’s and hesitancy makes even less sense. Have courage. Become a contrarian and you might find that you will out perform the herd.
OTHER POSTS WORTH READING!
Honolulu Rental Rates
Loans For College Condos
The Value Of A Realtor
Realtor Code of Ethics
Determining Offering Prices
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Rentals Can Take You Apart!
September 25th, 2008 categories: Honolulu Real Estate 101
Many people see buying foreclosures as a great vehicle to make their fortune. Flips have become very difficult to do, so this leaves turning houses and condos into rentals. The challenge with rentals is the ongoing maintenance and management. Experience tells me that the most successful landlords are very, very hands on. It is difficult to find a good and responsive manager, especially if your rental property is out of your local area.
Since 2003, Washington D.C. base Redbrick Partners, LLC, has raised approximately $50,000,000 to buy foreclosed houses. Redbrick is now shying away from individual homes in favor of properties that require less management. Again, even with significant buying power Redbrick couldn’t find the level of management they needed. A Wall Street Journal Article pointed out the following.
“In Baltimore and Trenton, Redbrick said in a recent letter to investors in one of its funds, “we have not been able to generate positive cash flow from these assets through our internal property management organization and have also been unable to identify satisfactory third-party property managers.”
CLICK HERE TO READ THE ENTIRE POST.
If you have a home or condo in Honolulu that needs management, call me at 808-737-4808 and I will do my best to help you find good management.
OTHER POSTS WORTH READING!
Loans For College Condos
The Value Of A Realtor
Realtor Code of Ethics
Determining Offering Prices
| Discussion: No Comments »
Hawaii’s Rental Rates Highest In The Nation!
September 24th, 2008 categories: Buying Honolulu Real Estate, Honolulu Real Estate 101
Here is another reason to buy a Honolulu rental house or condo. According to today’s Honolulu Advertiser…
“Median monthly rent was $1,194 in Hawai’i last year, meaning half of all renters paid more and half paid less, according to the census estimate.
Only three other states had four-figure median rental rates - California at $1,078, New Jersey at $1,026 and Maryland at $1,000. Nevada ranked fifth at $980.
Hawai’i’s median rent was up $78 from $1,116 a year earlier, and reflected higher home values passed on to renters as well as new housing inventory that included upscale condominium tower projects Moana Pacific and 909 Kapi’olani in Kaka’ako on O’ahu, the state’s largest housing market.
Dorothy Rapoza, a retired typographer on the Big Island planning a move to O’ahu for work, said she was surprised at how high rents are in Honolulu.”
CLICK HERE TO READ THE ENTIRE POST.
The lack of supply in core Honolulu, high values and low vacancy have driven rental rates. These same factors should drive long-term (5 to 10 years) real estate values up.
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When Bad News Is Good News For Honolulu!
September 23rd, 2008 categories: Honolulu Real Estate 101
Honolulu city lights from my house.
One of the big drags on National real estate is that many markets are over built with new construction. Call me simplistic, but if a market is has too many new homes for sale, then isn’t it good that the building of new homes is slowing? Isn’t it true that in order for a market to recover, building has to slow for a while? Then the recent “steep decline in new-home construction” as reported by the Wall Street Journal is good, isn’t it? In fact for over built markets, a slow down is integral to the recovery.
“A steep decline in new-home construction last month to a 17-year low suggests that the hoped-for stabilization of the housing market — key to boosting the U.S. economy — is still a ways off.
Construction of new homes dropped by 6.2% in August to a seasonally adjusted 895,000 annual rate, the Commerce Department said. Construction of multifamily units fell sharply. Single-family home construction fell by a smaller amount but remained at very low levels.”
CLICK HERE TO READ THE ENTIRE WSJ ARTICLE
How does this apply to core Honolulu real estate? Condominiums in Honolulu are somewhat over built due to the recent completion of Capitol Place, Keola Lai and the 909 Kapiolani condominiums. The Honolulu Board of Realtors ended this August with 2,743 active condo listings; if 500 of those units will sell the market will tighten and begin favoring sellers. As for houses, the Honolulu Board of Realtors ended August with 2,119 active listings available for purchase. Sell 200 of those homes and you will see the market swing in favor of sellers.
Bringing it full circle, if National new home building is down and core Honolulu has no room for any significant addition of single-family residences, why is Honolulu impacted by this information? It has to do with consumer attitudes, we have had so much bad news in the main-stream media over the last year, that each bit of bad news piles up on the previous stuff driving buyer’s further on the fence. Remember, Honolulu real estate markets can turn on a dime, so if you don’t yet own or are thinking about buying, this may be a particularly good time for you to make a move.
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