Big Island Rental Prices Dropping? (Honolulu, Hilo: sales, real estate, apartments)
Big IslandThe Island of Hawaii
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Has anyone else noticed that Big island house rental prices seem to be dropping and that there are more available rentals than there were just a few months ago? I am not basing this upon Craigslist (most of them seem to be fishy) rather than on the paid advertising available through the local newspapers.
Any local real estate people have any insight to add?
To us, this is good news as we are moving in late June.
Has anyone else noticed that Big island house rental prices seem to be dropping and that there are more available rentals than there were just a few months ago? I am not basing this upon Craigslist (most of them seem to be fishy) rather than on the paid advertising available through the local newspapers.
Any local real estate people have any insight to add?
To us, this is good news as we are moving in late June.
There was a story on the front page of today's Honolulu Advertiser about rents dropping on Oahu. Nothing about the Big Island, but the causes cited were generic, related to the economy, so it probably translates:
Yes, indeed, rental prices have been dropping like a stone on the west side where I live and work. They have been declining for a good year at least, but the last few months they have really gone down at a significant rate. Inventory is high but has been also for about 1 year due to owners whose properties are not selling, putting them into the rental pool with the thought of waiting 1, 2, 3 years until the market ticks up again. High end properties are holding a little firmer but they are down as well compared to a year or so ago. Curiously enough, the "low end" or around $1000 or less rentals are even staying empty longer. To add to the issue, many prospective tenants, whether new to the island or just moving for some reason (usually having to downsize) are much more cautious about long leases. 6 months is the minimum time period for a traditional and legally defined "long term" lease. (Under 6 months it is considered a vacation or transient rental and an additional 7.25% tax is added on. Meaning the owner must have this additional TAT license and pay that tax as well as their 4% GET.) The frustration of owners who bought during the boom whose payments are now not even close to being covered, is growing accordingly.
There are also more folks moving back home or combining households to save money so they are using less houses. Many folks have shifted to somewhere else where there may be more employment so those apartments are available now, too. A landlord has to keep the place rented or lose money, so if they take a bit less, they at least lose less money than losing the entire amount.
I work for a company with a property management office (serving mostly Hilo-town and Hawaiian Paradise Park). I am in the sales office, but keep a close eye on the rental activity since potential Sellers are often also considering the possibility of leasing their properties. Prices are down. It's supply and demand.... Generally, you can get a nicer home for less money than this time last year.
In the Peoria, IL area, it is the opposite. Due to all of the foreclosures, etc., rents have gone up, possibly 20% in the last year. Our financial planner owns a number of "low-rent" specials in the city and told me that she raises the rent on them as soon as each one gets vacated and has no problem getting 10+ applicants per house.
I don't think we have the same percentage of foreclosures since the house prices here put most of them into the "jumbo" mortgage group which had different loan requirements than the lower loan amounts so not as many of them foreclosed. There had also been a lot of new construction which didn't sell and is being made into rentals along with folks renting out rooms to cover their mortgages. We have a long history of combining more than one family group in a house so we have a lot more rental spaces available than would be comparable for the same amount of houses on the mainland.
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