How has volcano eruption affected Big Island real estate market? (if any) (sale, neighborhood)

[Nyfinestbxtf]

Originally Posted by whtviper1

Wages are not the driver with real estate prices. It is supply and demand.

I don't know where you are looking at real estate in the Puna district - but a quick search show me plenty of houses in Pahoa in the $200K range, not needing work, 1,200-1,500 sq ft on 1/4 acres lots. I'm not sure how it gets much lower than that - let alone deem them, inflated.

I’m speaking of Hawaii as a whole, not Puna.

[whtviper1]

Originally Posted by Nyfinestbxtf

I’m speaking of Hawaii as a whole, not Puna.

It seems fairly priced to me - lets take Oahu for example. You can find brand new construction townhouses in Kapolei for $575K or less - you can live in Ewa Beach easily for under $400K. Lots of condos island wide under $400K. Sure, if you want to live in the more desirable areas east of downtown or Kailua - you are going to pay, in some instances, a lot more - but that is the demand of the supply and demand equation. I may not want to live in Ewa Beach or Kapolei, but plenty of people do and commute downtown or Waikiki every single day

Regardless, how do you properly price an 18 by 40 mile island with a million people on it?

If you could magically make the price of real estate 50% less, does that 1 million people turn into 2 million people? You have to have checks and balances with limited land and resources.

[Open-D]

Originally Posted by whtviper1

Wages are not the driver with real estate prices. It is supply and demand.

I don't know where you are looking at real estate in the Puna district - but a quick search show me plenty of houses in Pahoa in the $200K range, not needing work, 1,200-1,500 sq ft on 1/4 acres lots. I'm not sure how it gets much lower than that - let alone deem them, inflated.

The simple, plain and undeniable FACT of it, be it land, houses, condos, boats, hamburgers, lumber or whatever. Price is determined by those two factors overwhelmingly.

[Open-D]

Originally Posted by Nyfinestbxtf

If real estate prices go down, that is good news for some. Maybe people who wouldn’t get approved for a mortgage now will be able to get approved for a mortgage tomorrow because the loan won’t be so much. Real Estate prices and rents in Hawaii are extremely inflated to begin with in comparison to wages.

There is no direct linkage between wages and prices.

Prices and wages (the price of labor) are both determined by supply and demand.

Too many people for the available work increases the supply of labor relative to demand therefor (reducing wages), while simultaneously increasing the demand for stuff (increasing prices). Its an inverse relationship.

[Nyfinestbxtf]

Originally Posted by Molokai100

Yes, you should have enough left over to buy gas masks and O2 tanks! lol
JK...there could be a definite benefit in reducing inflated land values and overcrowding. However, the county will probably have to raise property taxes which are very low in Puna. I believe the geothermal plant supplied 25% of the island's power...will kwh rates increase?
I wonder how many people who were considering buying in lower Puna have now shifted their focus to upper Puna? Seems like a lot of zone 3 property available there.

From everything I have read, upper Puna air quality has been fine, but buying there you will have left over cash for gas masks just in case.

I’m not sure why taxes have to go up when natural disasters happen. In other parts of the US they don’t raise taxes.

I think any one who wanted to buy in lower Puna still wouldn’t be able to, at least for a while. Anyone who wants to move to Puna will have to stick to upper Puna or the south point. Not sure how bad the ash and vog is there. I haven’t heard anyone talking about it.

I’m attracted to move to Puna because it would cost me twice to three times the amount less of what I can get anywhere else. Is Hamakua Coast more desirable, is Waikoloa more desirable? I guess it depends on the person. For some it might not be. What is more desirable for me is to have more property and privacy. I can’t do that anywhere else outside Puna and afford it. We can move to say Honokaa and be in a more desirable place, but be miserable because my neighbors are on top of me. In Puna, I can have my house buried in the middle of a 3 acre spaghetti lot surrounded by vegetation and never see them. I can have my own little private off grid oasis.

[Open-D]

Originally Posted by Nyfinestbxtf

From everything I have read, upper Puna air quality has been fine, but buying there you will have left over cash for gas masks just in case.

I’m not sure why taxes have to go up when natural disasters happen. In other parts of the US they don’t raise taxes.

I think any one who wanted to buy in lower Puna still wouldn’t be able to, at least for a while. Anyone who wants to move to Puna will have to stick to upper Puna or the south point. Not sure how bad the ash and vog is there. I haven’t heard anyone talking about it.

I’m attracted to move to Puna because it would cost me twice to three times the amount less of what I can get anywhere else. Is Hamakua Coast more desirable, is Waikoloa more desirable? I guess it depends on the person. For some it might not be. What is more desirable for me is to have more property and privacy. I can’t do that anywhere else outside Puna and afford it. We can move to say Honokaa and be in a more desirable place, but be miserable because my neighbors are on top of me. In Puna, I can have my house buried in the middle of a 3 acre spaghetti lot surrounded by vegetation and never see them. I can have my own little private off grid oasis.

And there is the rub.

Too many people are mesmerized by the cheap prices for substantial-sized lots. Trouble is, and has always been, and will always be, it is false economy of the worst kind, because it is located, located located on the flanks of one of the world's most active volcanoes, and smack in a large area (East Rift Zone) of fissures, Puu's and the like, past, present and future. And when you get paved over by M. Pele and Company, Paving and Havoc Wreaking, Inc., you'll be in the same pickle as the current group are and likely looking to others for a remedy. Perhaps not you, specifically, but too many who see the same low prices. It is so imprudent, IMHO, as to call for government intervention.

[Nyfinestbxtf]

Originally Posted by whtviper1

It seems fairly priced to me - lets take Oahu for example. You can find brand new construction townhouses in Kapolei for $575K or less - you can live in Ewa Beach easily for under $400K. Lots of condos island wide under $400K. Sure, if you want to live in the more desirable areas east of downtown or Kailua - you are going to pay, in some instances, a lot more - but that is the demand of the supply and demand equation. I may not want to live in Ewa Beach or Kapolei, but plenty of people do and commute downtown or Waikiki every single day

Regardless, how do you properly price an 18 by 40 mile island with a million people on it?

If you could magically make the price of real estate 50% less, does that 1 million people turn into 2 million people? You have to have checks and balances with limited land and resources.

I get the argument of supply and demand. More supply, cheaper the product. More demand, greater the price of the product. I just don’t know how someone who makes $60K can afford to live in the more expensive parts of Hawaii. How do some of them get approved for some of these mortgages. With my pension and my wife’s salary I couldn’t imagine getting approved for a $500K mortgage. I would be able to make the payments, but I better not accrue much other debt. Between car payment, student loans, credit cards my backend debt ratio would be 40-42% on a $500K mortgage. My backend falls within the limit for lenders, but the cost of living in Hawaii is much more expensive where that could make it a greater risk for a lender. Who are the banks giving these expensive loans to when the poverty rate is so high in Hawaii? For instance, I do a google street view of some neighborhoods in kauai where the home values are around $500K. Many of these homes are dumps and the neighborhoods are not that desirable. How can someone who can afford a $500K home not take care of that Home? You go into any neighborhood on the mainland where homes are going for $500K, the homes are taken care of like priceless art.

Are most of these homes bought up by people on the mainland and made into rentals and vacation rentals?

[whtviper1]

Originally Posted by Nyfinestbxtf

How do some of them get approved for some of these mortgages. With my pension and my wife’s salary I couldn’t imagine getting approved for a $500K mortgage. Who are the banks giving these expensive loans to when the poverty rate is so high in Hawaii?

Some get inheritance / some get money from parents.

A couple of misconceptions though that you have.

Hawaii ranks low in poverty compared to most states (about 9th) and ranks in top 3 of households with over a million in assets excluding primary residence and retirement (whose primary residence is Hawaii). Hawaii also has the lowest income wealth gap in the nation. There is a lot of “old money” here. Think about the wealth of people who bought in the 70s, 80s, and even early 90s whose houses are paid off and the wealth it has generated.

Without looking at a mortgage calculator- I’m fairly sure a couple each making $60K can get a $500K mortgage.

[Nyfinestbxtf]

Originally Posted by Open-D

And there is the rub.

Too many people are mesmerized by the cheap prices for substantial-sized lots. Trouble is, and has always been, and will always be, it is false economy of the worst kind, because it is located, located located on the flanks of one of the world's most active volcanoes, and smack in a large area (East Rift Zone) of fissures, Puu's and the like, past, present and future. And when you get paved over by M. Pele and Company, Paving and Havoc Wreaking, Inc., you'll be in the same pickle as the current group are and likely looking to others for a remedy. Perhaps not you, specifically, but too many who see the same low prices. It is so imprudent, IMHO, as to call for government intervention.

You would include LZ3? There is a lot of area on the Kona side that is in LZ3. I would never consider purchasing in LZ1 or 2, but 3 I would.

[Grassyknoll]

Originally Posted by Nyfinestbxtf

I get the argument of supply and demand. More supply, cheaper the product. More demand, greater the price of the product. I just don’t know how someone who makes $60K can afford to live in the more expensive parts of Hawaii. How do some of them get approved for some of these mortgages. With my pension and my wife’s salary I couldn’t imagine getting approved for a $500K mortgage. I would be able to make the payments, but I better not accrue much other debt. Between car payment, student loans, credit cards my backend debt ratio would be 40-42% on a $500K mortgage. My backend falls within the limit for lenders, but the cost of living in Hawaii is much more expensive where that could make it a greater risk for a lender. Who are the banks giving these expensive loans to when the poverty rate is so high in Hawaii? For instance, I do a google street view of some neighborhoods in kauai where the home values are around $500K. Many of these homes are dumps and the neighborhoods are not that desirable. How can someone who can afford a $500K home not take care of that Home? You go into any neighborhood on the mainland where homes are going for $500K, the homes are taken care of like priceless art.

Are most of these homes bought up by people on the mainland and made into rentals and vacation rentals?

Because many of these homes have multiple generations living in them and are passed down within local families. They were just working class family homes before the neighborhoods turned into $500k neighborhoods. You can see this in a number of areas of each island.