Moving from LA to Oahu (Honolulu, Ewa Beach: transplants, real estate market, foreclosures)

[RigbyPDX]

Hi, We are moving this fall from Los Angeles to Oahu and I have a few questions (that have been asked many times before). I already have a secure job - will be taking a job transfer. I am interested in buying rather than renting a single family home (3+bd/2+ba), we have two kids, 9 and 4, and have a dog. Additionally, my mom will likely be moving with us. Will be working in/near Kapolei area.
What are your thoughts on buying vs renting? Budget for house is ~800-900k. Have been looking at/referred to areas such as Mililani, Kapolei and Ewa Beach. Good schools are a must. Have also seen some new homes up near Makaha that look nice on the internet. Areas to avoid?
Willing to drive ~30-40 minutes if that helps or opens up our options.
Thoughts on Real Estate prices on the island?
Thank you in advance.

[whtviper1]

I would rent a year.

Real estate likely to take a massive free fall over the next year. The West side of the island takes the biggest hit. There will be desperation selling from people who can’t afford mortgages and foreclosures

[Rain Monkey]

I too would recommend renting a year or so. If only to get your feet in the ground and appreciate what options are available to you and your family's best needs.

You stated you have children, and there is the issue of schools. Public schools generally have a poor reputation, and it continues to be an unfortunate situation, however much like the mainland, the better public schools are located in zip codes where household income and property values are well in excess of average and lower than average. If you choose public schools, the schools your children attend will be determined by where you live. Your other option is private schooling and its associated costs. I would recommend you very carefully study which schools, public and private will provide the best opportunities for your children

I don't necessarily agree with WV's broad assessment of the real estate market. We have had a continual shortage of housing on the island. I also believe demand depends a great deal on the neighborhood. IMO, highly desirable, in demand neighborhoods will continue to retain much of their value.

In addition, we are experiencing, extremely low mortgage interest rates which may continue for the foreseeable future. I think this too will help support and sustain demand and soften a significant downturn in a number of neighborhoods on the island.

Will we see foreclosures? I think so. Like everywhere, Hawai'i has its share of over leveraged and under-capitalized homeowners and investors, however after the value destruction and losses experienced in the 2008 housing market
collapse, I suspect lenders will be more amenable to examine various work-arounds to mitigate losses.
We may likely soon see if this is realized or not.

Of course, I might be completely wrong in my assessment.

[whtviper1]

Originally Posted by Rain Monkey

I don't necessarily agree with WV's broad assessment of the real estate market. We have had a continual shortage of housing on the island. I also believe demand depends a great deal on the neighborhood. IMO, highly desirable, in demand neighborhoods will continue to retain much of their value.

One only needs to look at the Great Recession and the impact on Oahu real estate prices - and Oahu fared the best of the islands.

The West side - Ewa Beach, Kapolei, etc....fared the worst, with at least a 20% drop.

The "desirable" neighborhoods fell at least 10%

Those were sustained drops.

The Great Recession will be pale in comparison to what this is.

[Rain Monkey]

Originally Posted by whtviper1

One only needs to look at the Great Recession and the impact on Oahu real estate prices - and Oahu fared the best of the islands.

The West side - Ewa Beach, Kapolei, etc....fared the worst, with at least a 20% drop.

The "desirable" neighborhoods fell at least 10%

Those were sustained drops.

The Great Recession will be pale in comparison to what this is.

My opinion only,

I happen to disagree it will be as severe. The difference between then and now is that lending capital
dried up in 2008. That was a significant contribution to the reductions in property values, and that is
not the case now. Lenders have plenty of money to lend at this time. In addition, from my perspective,
Covid19 and its effects will be a relatively short in duration. The Great Recession was not.

Again, we'll see.

[RigbyPDX]

Thank you so much for your answers, I appreciate your perspective. We will look at the rental situation and see if it will work for our situation, I know this is probably the smart move. I have heard that it is very difficult to find rental properties if you have dogs, is this accurate? More so than on the mainland? Are there any specific rental websites that you can recommend? I have looked a little bit through Google and Zillow - will expand my efforts.
For schools, any input on Mililani Mauka or Mililani Uka? There also seem to be quite a few good public schools over towards Honolulu and the East side (Waikiki, University Lab, and Ka'elepulu Elementary).

[prospectheightsresident]

I don't think rentals with a dog are hard to come by, but be prepared to pay more (either via an increased deposit and/or monthly pet rent) to do so. There are PLENTY of people on island with dogs and certainly not all of them own their places.

From my experience, rental listings will typically spell out if they are pet friendly or not, so you shouldn't have much of a problem knowing this.

In terms of websites, I always encourage folks to sign up for AHRN (it is geared toward military, but you don't have to be military to use it) as one option. Craigslist and similar sites are good, too, but I feel like you're less likely to fall victim to a scam on AHRN.

[whtviper1]

Originally Posted by Rain Monkey

Lenders have plenty of money to lend at this time.

They still want you to have a job - and those are rapidly disappearing - Last month's rosy unemployment number, if you can call the low 10's that - didn't include temporary furloughed workers, or much of the tourism industry.

[blau808]

Of the three areas you mentioned: Mililani, Kapolei and Ewa Beach, Mililani has the better schools.

You will definitely want to rent to get a feel of the areas before you drop 800-900k on a permanent residence. You should be able to find a decent SFH in the Mililani area for that price.

[mxg67]

I'd rent for the reasons stated so far, plus to ensure you'll actually be here long enough to make buying worthwhile. Transplants don't often stick, hopefully you've done your research, especially with kids in the mix. But in any case, Mililani is your best bet. I'd avoid Makaha or anywhere really along that coast.