Condo Prices, what's the prognosis? (Honolulu: apartments, foreclosures, lease)

[BoSchoffer]

I am getting ready for retirement and looking at the prices for condos on Oahu. I'm currently living in Europe, so it's difficult for me to gauge the price movements. I was shocked to see that a 3BR condo in the Kapiolani area sells for 600K upward. What is the current prognosis for housing/condo prices in Honolulu? Is now a good time to think about buying, or should I wait? It would be nice to have a crystal ball
Thanks,
Bo

[hotzcatz]

Everything else is getting more expensive except housing. As folks lose their jobs and move to the mainland to find work, there will be more houses, apartments and condos available so the prices should decline. Generally, as it gets cold on the mainland, we get folks moving over here so if the prices are going to be supported, it will be in the winter months. Kinda like buying a boat or motorcycle in the spring, you pay more than for one in the fall. At least, in four season climates.

When looking for apartments, condos and even houses, check to see if it is "leasehold" or "fee simple". If it is leasehold, the price can be very low if there are just a few more years left on the lease since it is unknown how much or even if there will be a new lease on the land under the condominium after the existing lease expires. The land owner is not required to renew the lease. They do have the option to tell the building owners to take that building and get off the property.

[BoSchoffer]

Many thanks for your reply, hotzcatz. Good points and valuable info on the fee simple vs. lease hold options. Cheers, Bo

[alohakat]

Condo pricing will definately not increase in the next 2 years, and it should decrease, as economic turmoil continues to hit the States (and the world) and then later affects the Islands. Just pick a few addresses to monitor monthly for their perceived value on a site like zillow, a few or more in your desired neighborhood, and keep your own charts on those addresses to show you the trend. We will be having a huge second and third wave of foreclosures soon on pay-option-arm mortgages, combined with increasing unemployment, so it depends on the neighborhoods you desire and how much these conditions will affect those neighborhoods. Pricing in the US will revert to somewhere between 1998 and 2004 pricing, depending on how insulated a particular neighborhood is from economic instability. That's the most crystal ball we have.

On the other hand, if you can afford your retirement at current pricing, and don't want to just wait around to start living (we don't know our number of tomorrows!), enjoy the move now. Let us know what you do!