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Just bought my first house in Hawaii - still in escrow, technically, I suppose. My wife and I started looking in January when the possibility of living in Honolulu came up and we watched, month by month, as the prices gradually crept up. Looking at the historical data on sites like Zillow was even more telling.
A lot of people urged us to rent for our first year to "figure out where we wanted to live" but to us the writing was on the wall that staying out of the market for an extra year would not be to our advantage. Prices are definitely going up right now. What we heard about the home prices in Oahu is that they tend to spike, then plateau for up to several years, then spike again etc etc. From what we understand, even in 2008 they didn't drop too much.
Congratulations! I've owned in Honolulu since 1978 and have experienced 9%+ annual appreciation and rent increases averaging 6-7%.
I don't know of any condo prices in Waikiki that have increased 71% in value over the last 3.5 years. Your building is definitely the exception. Between 2007 and 2010 my condos in Waikiki dropped in value by an average 20-25% (peak to trough). Fast forward to today and the prices are back to where they were in 2007... maybe 5-10% higher. If my properties increased 71% in 3.5 years I'd be expecting a major pull back. Luckily we're not seeing that kind of ridiculous price growth across Waikiki.
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In fairness, prices in my building were pretty suppressed in 2009 & 2010 due to a double whammy of the economy and a law suit. So the prices have escalated quickly once the economy improved and the turmoil was over. But I do know of one other building that also had overly suppressed prices due to factors in addition to the economic factors, that saw great appreciation once everything was settled.
But that appreciation pretty much just brought the units up to the current market average.
Just bought my first house in Hawaii - still in escrow, technically, I suppose. My wife and I started looking in January when the possibility of living in Honolulu came up and we watched, month by month, as the prices gradually crept up. Looking at the historical data on sites like Zillow was even more telling.
A lot of people urged us to rent for our first year to "figure out where we wanted to live" but to us the writing was on the wall that staying out of the market for an extra year would not be to our advantage. Prices are definitely going up right now. What we heard about the home prices in Oahu is that they tend to spike, then plateau for up to several years, then spike again etc etc. From what we understand, even in 2008 they didn't drop too much.
Congrats, I think you made a good choice and probably timed it well. What area did you buy in and how did you come to like that location the most?
I keep Sales stats on my Waikiki condo building beginning with 2010 Sales. So I will share them just for the sake of those interested in such things.
I recognize this is just one building out of many and just one location out of many, the average sale price per unit has been increasing quite rapidly. Each unit in the building is the exact same sq footage, so variants would be the floor and the extent of remodelling. But each unit on average is pretty comparable.
2011 avg sale price per unit was 14% higher than 2010.
2012 avg sale price per unit was 9% higher than 2011.
2013 avg sale price per unit was 21% higher than 2012.
2014 (year to date) avg sale price per unit is 13.7% higher than 2013.
Although, my sense is that sales are slowing a little bit. Price is not dropping, but sales are slowing. I say this because the Number of sales in 2014 year to date (again, just in my specific building) are lower than in the past.
I think this is because many of the properties listed in 2014 had super jacked up list prices. The ones that have sold and closed, had prices that were still high, but more reasonable.
There are also a couple other 2014 pending sales in escrow right now and I suspect they will be consistent or slightly higher than the other 2014 sales already closed.
I don't know how this translates to the rest of the market, because it's just one small sample, but in my opinion I agree that it might represent a better option to buy something now and then transition into something different down the road a ways.
I've often wondering if there is a correlation between price spikes and visitor spikes. 2008 through 2010 had lower visitor arrivals in part because of the US downturn in the economy and the Tsunami in Japan. But that started changing and people came roaring back in 2012 & 2013. Prices started climbing again as well. So I've often wondered about if there is any real tangible correlation between the two.
Thanks for the info. Some of the condos in Kailua have seen hefty gains this year too and will probably go higher with the new Ka Malanai project prices that just came on the market recently, granted they are brand new though. As others have answered, there is Absolutely a correlation b/w prices and visitors and unfortunate events like the Recession and Tsunami. Many articles out this week on how a lot of Chinese visitors are worried about their economy and are looking overseas to invest in American real estate b/c they feel its more secure at the current time. Definitely happening here.
Congrats, I think you made a good choice and probably timed it well. What area did you buy in and how did you come to like that location the most?
We bought in Manoa. We loved the greenery and the sense that people took pride in taking care of their homes. It was more a general feeling than anything; each time we went there it felt right (for us) and every other neighborhood we looked at just didn't fit even close to as well. Great elementary school for the kids, nice public park with a community pool, close to lots of hiking trails and 10-15 min for me to ride my bike to work. Plus, not too far to get down to the beach either (although I guess nowhere is that far). I'm counting down the days to the move something awful......can't wait to get out of Los Angeles - 21 days to go!
It will be interesting to see where the prices plateau at.
Perhaps I am naive to think that the rental market will have to be affordable in one way or another? If the median household cannot afford to pay the rent, they wont. Wouldn't that keep rental prices somewhat lower? i.e. you can only rent your place for what someone is willing to pay?
It will be interesting to see where the prices plateau at.
Perhaps I am naive to think that the rental market will have to be affordable in one way or another? If the median household cannot afford to pay the rent, they wont. Wouldn't that keep rental prices somewhat lower? i.e. you can only rent your place for what someone is willing to pay?
Yeah, that's exactly what has kept home prices so affordable.
Perhaps I am naive to think that the rental market will have to be affordable in one way or another? If the median household cannot afford to pay the rent, they wont. Wouldn't that keep rental prices somewhat lower? i.e. you can only rent your place for what someone is willing to pay?
Rent is going to continue to rise - again, simply a matter of supply and demand. There is more demand than supply and nobody sees that changing especially over the short term.
As housing pricing goes up rentals go up.
People are going to have to allocate more of their income towards rent. Or move where rent is cheaper, like the West Side of Oahu/Ewa area.
People are going to have to allocate more of their income towards rent. Or move where rent is cheaper, like the West Side of Oahu/Ewa area.
That's a great point, thanks.
I forget the commute option at at times because I live in town. Yesterday I was going the opposite flow of traffic to Kahala. (7:45am eastbound from downtown) As soon as I passed the university backup, it was easy going. I was a bit taken back by how many cars heading into town from Hawaii Kai were bumper to bumper. And that's not even the Eva traffic group.
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