Over the long term, some people will agree that owning real estate on Oahu is a wise investment because prices have steadily increased. With inflation on the rise, owning real estate is more appealing since your mortgage payments can be fixed. I understand that buying a home can be scary, however, there are opportunities in our market to help you build your wealth.
Andrew Carnegie once said that 90% of millionaires got their wealth from investing in real estate. For the average person, investing can mean buying your primary residence. Obviously, you need a place to live in. When you own, you are paying your own mortgage. On the flip side, a renter is paying the landlord's mortgage. Second, when you own, the mass majority of people will get a fixed rate mortgage. That means your monthly mortgage payment will be the same amount for the entire life of the loan (unless you refinance). Third, every time you make a mortgage payment, your equity increases. If you sell your home, can you cash out your equity. When you rent, once your lease is over, you do not get anything back.
Let's look at some housing statistics from the Honolulu Board of Realtors.
In 1985, the median sales price for a condo on Oahu was $89,800. Fast forward to 2021, the median sales price was $476,000. Back in 1985, you had to put down 20%. Also, mortgage rates were upwards of 10% back then too. Now, mortgage lenders allow the buyer to put down less than 20%. Matter of fact, many of my buyers have taken advantage of this. When used properly, leverage can be a beautiful thing.
Despite rising mortgage rates, an increase in inflation, and volatility in our financial markets, Oahu's housing market still remains strong. In West Oahu, DR Horton is still building out Hoopili. After decades of delay, Koa Ridge has finally started. Both DR Horton and Castle & Cooke cannot build the homes fast enough. Moving closer into town, the Aloha Stadium Entertainment District will create 70-80 acres of mixed-use real estate in Halawa. In the heart of Kakaako, Howard Hughes are still creating luxury and affordable condos. In addition to these three developments, there are new listings hitting the market every day.
The beauty of investing in real estate is there are no called strikes. There are numerous opportunities for you to buy a home each day. A 2-bedroom condo at 801 South Street could be listed for $800,000 and a studio in Waipio Gentry could be priced at $325,000. No is forcing you to buy those properties. That is, some people may buy now and some people might buy later. When you submit an offer, the price is a negotiable term between the buyer and seller. You can offer less, offer list price, or offer more. Although our housing market is competitive, I have helped numerous buyers who offered list price or less. When I think about it, the only people who will miss out are the ones who just sit on the sideline.
Austin and I recently helped our first time homebuyer clients purchase a unit at Palehua Villas in Kapolei. The unit had just fallen out of escrow and we attended an open house on Sunday. That evening, we wrote up an offer and the seller accepted the next day!
There are many things to be thankful for. First, we are extremely grateful the seller decided to work with us. Second, our clients were able to lock a rate in the 4% range. Third, we were able to close in less than 45 days. Fourth, our clients were able to purchase the unit for list price!
I will be assisting Austin and Robin with their new Chinatown listing. The property is zoned BMX-4 and consists of over 17,000 land SF. The subject property is four detached structures. The front building has two commercial street front units with residential units upstairs. There are two, 2-story walkup apartments and the fourth structure is a single level multi family building.
My wife and I have remodeled both our homes. One of easiest things we did was replace the window AC units. Both condos had these old school, tank sized window AC units. We swapped them for GE window AC units. Here are few other tips:
If your home belongs to an association, make sure you check the house rules to see what the AC guidelines are.
Make sure you measure your room. This will determine what size (BTU) AC you will need to purchase. If your window AC is too small for the space, the room will never get cold.
Adding a ceiling fan can help circulate the cold air more efficiently throughout the room.
Hawaii News Now recently reported that the Mayor is proposing a shorter rail route. With the rail project already delayed and over budget, having a shortened rail route might not be a bad thing for the tax payers. However, since the project has received Federal funds, are we even allowed to shorten the rail line?
As it's been frequently documented, the University of Hawaii football team started to play on campus in 2021. With Aloha Stadium no longer available, UH is creating a sub 20,000 seat stadium in lower campus. Could this small stadium redevelopment indirectly improve home values in the surrounding communities?
After being traded to the Denver Broncos, Russell Wilson listed his Washington state home for $28 million! The house features six bedrooms, six bathrooms, five fireplaces, two separate beaches, a detached treehouse, a basketball court, a home movie theater, a yoga studio, a recording studio, a dock with space for a yacht
Stay safe and healthy.