For the past few years, the United States government has come close to defaulting on its obligations. Matter of fact, in December 2021, President Joe Biden signed off on the debt ceiling increase. This would allow the government to cover its obligations until 2033.
Had the United States defaulted, this could have caused severe financial consequences. Interesting, during this turmoil late last year, Wall Street was relatively calm.
What is the debt ceiling? According to Investopedia, the debt ceiling "is the maximum amount of money that the United States can borrow cumulatively by issuing bonds." The debt ceiling was created in 1917.
The United States government has a lot of expenses. This ranges from the military, social security, medicaid, and more. Taxes is a source of revenue to pay for these things. However, taxes is not enough -- the government issues debt. Many years ago, congress passed a law to limit how much debt the government can take on. This is known as the "debt ceiling."
As it is often documented, congress has raised or suspended the limit numerous times. If the United States government defaults, one can speculate what could happen. Treasury Secretary Janet Yellen noted that default will prevent nearly 50 million seniors from receiving their receiving Social Security checks. She followed up by saying, "In a matter of days, millions of Americans could be strapped for cash."
Before the debt ceiling was raised last year, Moody's Analytics noted that mortgage rates would spike if United States government defaulted. An increase in mortgage rates could deter buyers, especially since rates have been so low.
Mortgage rates, like a stock, will fluctuate up-and-down. In January 2022, mortgage rates shot up. I recently had a client who locked in 3.3% with negative points late last year. Just last month, a different client was quoted 3.72% at 1 point. Had the latter client decided to buy in 2021, she would have saved hundreds of dollars a month by having a lower mortgage rate. Just let that sink in for a bit.
If you are thinking of buying, you should do it sooner than later. The median price for a single-family on Oahu is over $1 million. Likewise, the median price for a condo/town house is increasing too. The single-family home market is very competitive. Some single-family home buyers are opting to buy condos instead.
Sitting on the side line -- waiting -- might not be a great strategy. The Federal Reserve has said they will raise interest rates to fight inflation. In addition, you are battling a second front since home prices are high. The longer you wait, the more expensive it will cost you to be a homeowner.
Do not be afraid to pay the price because being a homeowner is very rewarding. Our team is ready to help you.
Greg and I recently listed a 2-bedroom/1-bathroom condo in Mililani. The property was a long term rental and the owner decided to sell since the housing market has been hot.
Prior to listing, the seller remodeled the unit. This included new appliances, flooring, paint, fixtures, and new kitchen cabinets and countertops. Although labor and materials are expensive, it was still best to renovate the unit since we were able to list the property at a higher price.
To no surprise, we received over five offers. All the offers were very well written, however, the winning bid stood out since the terms heavily favored the seller. The transaction went smoothly and the buyer and seller were happy.
When was the last time you cleaned your oven racks? Surprisingly, this is not a difficult task to do. You will need these things:
- Baking Soda
- Dishwashing Detergent
- Spray Bottle
- Steel Wool
Here are the steps:
(1) Remove the racks from the oven. You can scrap off the large pieces of grime.
(2) In a container, mix some baking soda, water, and a dash of dishwashing detergent. I like to make this pasty so it sticks onto the rack better.
(3) Apply the baking soda paste to the rack.
(4) Spray the vinegar onto the track. Once you do this, you can use the steel wool to scrub. As you scrub, you might need to add more baking soda paste and vinegar. Just repeat the process into all the grease and grime falls off.
Austin, Robin, and I will be helping a local non-profit in leasing out four commercial condo units in Kohina at Hoopili. All four units can be leased together or separately. In addition, the landlord has filed for permits to build out basic infrastructure in each space.
Hoopili is a new planned community in West Oahu. Last year, Robin and I helped our clients purchase a resale home in Hoopili. Despite the seller receiving upwards of 20 offers, our clients' offer was accepted!
According to the Honolulu Board of Realtors, there were 4,526 single-family homes sold in 2021, an 18% increase from the 3,838 home sold in 2020. In addition, condo sales increased 53%, from 4,706 in 2020 to 7,203 in 2021.
Pacific Business News recently announced that Peter Savio sold the Pagoda Hotel to Rycroft Holdings LLC. The sale was completed at the end of 2021.
Olive Garden recently announced that they will open their second Oahu location at Ka Makana Alii. Olive Garden's first location is at Ala Moana Shopping Center.
Stay safe and healthy.