Archive for the 'Reasons To Sell' Category
Honolulu Property Taxes (Are they low?)
July 10th, 2008 categories: Reasons To Sell
While speaking with a potential client in California, I was surprised to discover that she was making plans to move to Honolulu. Apparently, Californians are being taxed at such a level that many are looking for states with a more bearable overall tax structure. I found it interesting that she would consider Hawaii a more friendly tax environment, as we are not generally thought of as a low tax State. Hawaii does have a high tax burden, but when it comes to property taxes many people consider our property tax rates to be very low.
As an example, if a person were to buy a home for $750,000 in each state, the person buying in Honolulu would pay $2468 per year in property taxes. The California purchaser, in most cases, would pay $9375 per year. That’s the difference of $6907 per year, or about $575 per month. Before I started writing this blog, I didn’t think that the difference was as great. This difference, however, could pay for a very nice vacation for a family of four or the monthly payment on a luxury car.
Given our quality of life and the savings on property taxes, Honolulu maybe attracting more mainlanders from high tax burden states. Could this lead to more demand for Honolulu properties? I think so.
CLICK HERE FOR A SHEET THAT SHOWS MOST OF HAWAII’S VARIOUS PROPERTY TAX RATES.
Today’s picture is all a six-man outrigger canoe just after the start of a race in Waikiki.
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Reasons Not To Own Your Home In Honolulu!
July 9th, 2008 categories: Reasons To Sell
Even though this blog came from a Cleveland Ohio real estate company, most of the reasons not to own a home in Honolulu are applicable. None of these reasons may apply to you, however, read the entire list for a great laugh.
” # Your time line for living in your new home is the same time line as the bank’s foreclosure process.
# You’re banking on paying your mortgage by renting your bedrooms to friends who don’t have jobs.
# You’re planning on quitting your six-figure job and following your dream of selling ice sculptures on eBay.
# You don’t know the difference between the smell of leaking gas from the furnace and Downy fabric softener.
# You think your landlord will come over at 2am when your water heater is flooding your basement.”
CLICK HERE TO READ THE ENTIRE POST.
Today’s picture of the Royal Hawaiian Hotel was taken from the starting line of this past weekend’s canoe race.
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Thank Goodness The Fed Is Holding Fire!
July 8th, 2008 categories: Reasons To Sell
Today’s Wall Street Journal reported that the Fed would not require Fannie Mae or Freddie Mac to increase their reserve deposits. Thank goodness. In my opinion, much of the last major financial meltdown that occurred during the Savings and Loan crisis of the 1980s was a result of regulators increasing the deposit requirements for those companies. If the Fed had required lenders to increase their on hand deposits, I believe you would have seen a significant number of lenders stop or greatly reduce the number of new loans they would make. In a market that is already experiencing tighter lending requirements, further tightening could lead to unnecessary damage.
“The top regulator for Fannie Mae and Freddie Mac said Tuesday that future accounting rules would likely not lead regulators to demand that the huge mortgage-finance giants hold more capital, addressing fears that punished the stock prices of both firms on Monday.”
Click here to read the Wall Street Journal article.
I am told that Bank of Hawaii and the First Hawaiian Bank did not significantly participate in sub-prime mortgage markets and, due to this, are in good positions to continue lending in Honolulu market. It is good to see that our local banks decisions to remain conservative have come back to serve all of us.
Today’s picture was taken at the beach side finish line of this past weekend’s cut into race.
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Generalities vs. Specifics in Honolulu Real Estate
July 7th, 2008 categories: Honolulu Real Estate 101, Reasons To Sell
Generalities. In general they can be right and in specific they can be wrong. A prime example is the general condition of most real estate markets in the U.S. Most news reports and people espouse the idea that the housing market is not doing well. In general they may be right and in specific they can be wrong.
This year I have been selling lots of houses and condos. Most of my sales have been my listings and a number have been buyers that I represented. Many of my listings (not all) have been selling within weeks of coming on the market (how is this in a “soft” market?). I have found there to be three keys to having a property sell fast and thus make it a “good” market.
Pricing. Please read my recent post regarding my thoughts on pricing Honolulu real estate.
Condition. In this market, buyers are looking for a home that is clean and does not require immediate work to upgrade the property. They want to move right in and begin living rather than having to remodel or paint the place. Do what you can (manage the cost) to make your property look clean and crisp.
Balance. There has to be a balance between the current market price and condition of the home. A seller can have a very clean unit that requires no work, but if the price is outside the expected sales range, then it will sit and not sell. I have noticed that if a property is expected to sell at “X” and it is priced at “X”, in this market, it will sell right away.
Don’t believe the generalities. Look at a specific property, assess its condition and price, and then balance the two to arrive at a sale that doesn’t count on a good or bad market.
Today’s picture was taken during this past 4th of July’s MacFarlane Canoe Regatta. I love the unfolding drama with Diamond Head as a back drop.
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Honolulu’s Building Code and Lanai Railings!
June 30th, 2008 categories: Reasons To Sell
I love what you could do before the tightening of the building codes. More than likely, the rail above would not be allowed under current building codes. The gaps between the leaves are too wide and a child could fall through. If this home were for sale and you purchased it, be ready for your professional inspector to note the irregularity.
If you have kids, a simple and safe solution, that could keep the view open, would be the installation of 1 inch by 1 inch wire mesh on the inward side of the railing. Another issue that cannot be determined from afar is the height of the rail. To me it looks too low. When buying an older Honolulu home, be sure to check the lanai rails.
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What Price Should You Offer On A Honolulu Home?
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Bad Traffic in Honolulu?
June 20th, 2008 categories: Reasons To Sell
It seems the further one gets outside of the core of Honolulu, the worst the traffic gets. A recent report on Honolulu’s traffic confirms that this is the case.
“Forty hours sounds like a typical workweek. But that’s how long motorists are stuck in traffic each week where Moanalua Freeway’s eastbound lanes meet the H-1 freeway from the airport.
That logjam contributes to Honolulu’s rating as the worst U.S. city for rush-hour slowdowns, according to a private survey released by a Seattle firm.”
CLICK HERE TO READ THE HONOLULU STAR BULLETIN ARTICLE.
As sad as I am to say, “I told you so”, this is more evidence that traffic will continue impact your quality of life. Given this confirmation, I believe you will see real estate values in core Honolulu do better than outlying areas. So if possible, buy between Nuuanu and Hawaii Kai.
Today’s picture was taken from the starting line of a canoe race and it is looking back at the beach in Nanakuli.
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Hawaii’s Purchase Contract Makes Honolulu Real Estate Easy!
June 4th, 2008 categories: Reasons To Sell
If you are planning on buying or selling real estate in Honolulu it is good idea to familiarize yourself with the Hawaii Association of Realtors Purchase Contract. Those of us who have been around for a long while, have had the term Deposit Receipt Offer and Acceptance (DROA) steeped into our memory, but the new contract is called the Purchase Contract (PC).
The PC is a binding contract and it contains all of the agreements made between buyer and seller. A copy is delivered to escrow and escrow follows the terms in the PC to make sure the terms and conditions agreed to the buy the buyer and seller are met. Get a copy by double clicking on the link below. Knowing the document will help your real estate transaction go much more smoothly (I have included copies of the AS IS Addendum and Counter Offer too).
CLICK HERE FOR A COPY OF THE PURCHASE CONTRACT, AS IS AND COUNTER OFFER.
Today’s picture was taken this past Sunday. I was holding canoes at the starting line at Keehi Lagoon. This is view looking straigt down the line.
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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’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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Honolulu Crash Pad Could Help With Mortgage Payments!
May 14th, 2008 categories: Reasons To Sell
Do you have an extra room in your home or apartment being used to store dust or junk? Given Honolulu’s International Airport, your room could be turned into a cash flow cow. A recent article in the LA Times talks about the need for “crash pads” for aircrew (pilots, flight attendants, etc.). Since Honolulu is a desirable location for senior flight crews, you may find that your renter would be in residence for a small portion of the month. In any case, if you are looking for a little additional income a “crash pad” might be just what the doctor ordered.
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“Despite a relatively low profile, crashpads are not a new idea and are nearly as old as the airlines themselves. Pilots, flight attendants and other airline employees may live in one city but fly out of another one, sometimes hundreds of miles away. Often this gap between home and base is the result of employees’ shifting schedules or changing to a different airline. Others find their base city to be too expensive to live in.”
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Click here to read the whole article.
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