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How's the market looking these days? For example, here in FL, I'm seeing homes go for 5% above asking price due to bidding wars, it's crazy since just a few years ago you couldn't give people homes.
Looking at purchasing a home while I'm there then airbnbing it out or turning it into a rental property. Looking around Waikiki since it's a tourist trap area. It's been over 15 years since I've been to Oahu, I'm sure things have changed.
How's the market looking these days? For example, here in FL, I'm seeing homes go for 5% above asking price due to bidding wars, it's crazy since just a few years ago you couldn't give people homes.
Looking at purchasing a home while I'm there then airbnbing it out or turning it into a rental property. Looking around Waikiki since it's a tourist trap area. It's been over 15 years since I've been to Oahu, I'm sure things have changed.
Make sure you can legally do that, a lot of places you can't.
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How's the market looking these days? For example, here in FL, I'm seeing homes go for 5% above asking price due to bidding wars, it's crazy since just a few years ago you couldn't give people homes.
Looking at purchasing a home while I'm there then airbnbing it out or turning it into a rental property. Looking around Waikiki since it's a tourist trap area. It's been over 15 years since I've been to Oahu, I'm sure things have changed.
Prices have risen significantly over the past 5 years. And like any desirable area, you are not going to swoop in and discover a bargain that others have overlooked.
If you want to buy and rent to a long term renter, you could consider a house. If you want to do airbnb for vacation rental, you will likely need to look only at condo's in Waikiki. The overwhelming majority of legal vacation rental properties are in Waikiki.
Be upfront with your realtor and tell them you want a property that can be legally rented out as a vacation property.
Personally, I think most people are far better off buying in their local market instead of trying to buy a property in a market they know nothing about and is 3,000 miles away from them.
And like any desirable area, you are not going to swoop in and discover a bargain that others have overlooked.
I think there are some relative bargains available - but they generally all need major remodeling (emphasis on major) - and if you can get the right contractors and patience you can come way ahead of the turnkey ready to move in properties of which any deal is elusive or nonexistent
I rent but know many coworkers who have bought a house. Their experience is that every time they like a house, some rich foreign investor from Canada or Japan quickly buys it paying all or 50% cash.
I found my place by being lucky with great timing. I imagine that's the same for recent home owners.
As far as Airbnb goes, I've read several articles saying a long term lease rental property is easier to manage than Airbnb'ing it.
I rent but know many coworkers who have bought a house. Their experience is that every time they like a house, some rich foreign investor from Canada or Japan quickly buys it paying all or 50% cash.
You must have some very unlucky coworkers.
According to a State of Hawaii report on Housing Demand 2015 to 2025, foreign buyers in Hawaii in 2012 made up about 3.6% of all real estate transactions - hardly a large number. According to the National Association of Realtors who derived the estimate, that doesn't even put Hawaii in the top 4 states of foreign buyers (Florida, California, Texas, Arizona) have far higher foreign ownership.
I've sold several properties in Hawaii and never had a foreign buyer even look at one of them.
Below are a few excerpts from today's article in the Star Advertiser (article is truncated). Most shocking is the number of days on market (average)... only 12 days. More than half of homes enter escrow in under two weeks. I personally don't agree that we will see $1M median prices by 2022, much less 2020 (as some believe). But then again, a year or two ago I did not expect to see such an active market today.
Single-family houses on Oahu soared to a median price of nearly $800,000 last month, prompting local real estate experts to forecast that the $1 million threshold could be breached within the next five years.
With strong demand and low inventory, the price for previously owned houses climbed 4.6 percent to a record $795,000 in June, according to data released Thursday by the Honolulu Board of Realtors. That was $35,000 higher than the previous record of $760,000 exactly a year earlier.
“We see no end in sight,” John Jacobson, a real estate analyst for Honolulu-based Locations, said in a phone interview. “There is no immediate or near-term solution to the lack of inventory. Demand continues to be strong. We’ve had this condition for the last several years and expect next year to be the same.”
Sales for previously owned single-family houses jumped 14.2 percent to 370 from 324 in the year- earlier period, while days on the market for those homes set a record low with sales closing at a median of 12 days, down from 14 days in June 2016.
“It is amazing to see record sales prices and also the speed at which homes are selling this summer,” Sue Ann Lee, president of the Honolulu Board of Realtors, said in a statement. “Lack of inventory for single-family houses below $500,000 has pushed the median price higher. However, even with the higher median prices, homeownership is clearly still a top priority of consumers, as pending sales for single-family houses are up by 38.7 percent and we anticipate those to be reflected in closed sales in the upcoming months.”
If the current pace of sales continues and no new inventory is added to the market, the existing inventory of single-family houses would be exhausted in 2.7 months, and the inventory of condominiums would be depleted in 2.8 months, the report said.
“The main thing is there is very little inventory for sale, especially at the lower price ranges, so what’s available is in higher price ranges and it’s driving prices up,” Jacobson said. “Another factor important to the lack of inventory is there’s a competitive market environment. A lot of homes are being bid up right now. One in every 3 single-family homes is being bid up over asking price in a competitive bidding situation.”
Paul Brewbaker, principal of TZ Economics, forecast in 2010 that the median price of single-family houses could hit $1 million between 2018 and 2020 conditioned on a bubblelike price appreciation. He revised that prediction in subsequent years, and said Thursday that homes should reach that threshold in 2022.
“At the recent annualized pace of appreciation (4.5 percent from mid-2011 through mid-2017), it would take five years to reach $1 million,” Brewbaker said in an email. “The risk is that new City and HCDA (Hawaii Community Development Authority) ‘affordable’ housing policies will impede new Oahu homebuilding, which needs to be much higher (one entire Koa Ridge per year just to stay even with new housing demand), causing demand growth to outstrip that of supply, accelerating home price appreciation and undermining affordability.”
“If we’re looking at an annual basis with $750,000 for the median for 2017, at that rate we’re going to hit $1 million in about four or five years at a growth rate of about 6 percent a year,” Jacobson said.
John Riggins, owner of John Riggins Real Estate, said rising home prices should be expected given the strength of Hawaii’s economy. Riggins said the median price for single-family homes could reach $1 million in 2020.
“As the economy moves along, it could be faster than that,” he said. “But there are some other factors impacting the housing market that a lot of people have no control of, and that is the maximum loan amount.”
Prospective homebuyers are increasingly having a harder time affording housing, according to Mark James, a board member of the Mortgage Bankers Association of Hawaii.
“It’s usually their budget situation and the down payments that are the problem,” he said.
HOME SALES
The number of homes sold on Oahu in June with the median price and percentage change from the same month last year:
HOMES
SALES MEDIAN PRICE
June 2017 370 $795,000
June 2016 324 $760,000
Change 14.2% 4.6%
CONDOS
SALES MEDIAN PRICE
June 2017 536 $400,000
June 2016 548 $405,500
Change -2.2% -1.4%
Source: Honolulu Board of Realtors
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