Hawaii home-buyer's mortgage math

[honobob]

Why not set the clock back to 1991 and compare 7 year Hawaii RE prices? I didn't live here back in then but I pretty sure that over that period Real Estate was a flat or down in Hawaii.

Which makes it even better in a raising RE market but as millions are now learning your 10 or 20% down is now completely wiped along with your credit score...


I am not sure what Honobob point is. I think he is saying that real estate is always a great long term investment, if you pick the right location. Which is no different than saying the stock market is always a great long term investment if you pick the right stock/fund.

Obviously an almost double is nice in 6 years (although after commission fees etc it is probably closer to 80% increase in total appreciation)

First, appreciation IS NOT discounted by commission fees, etc.

Second, I only posted the FACL's "paired sales" because they purport to claim that homes in Honolulu sold for 13.9% more than last year while the OP was claiming mass disaster on the island of Oahu where people were forced to discount 10% to make a sale after 7 years of 10% appreciation!

Third, you are correct that my point is that long term appreciation of real estate can be much more than the rate of inflation. I owned in Honolulu through the 90's and my appreciation rate is still 9-10%. If I'd been a dirty market timer I could have bought and sold and possibly made more but I am comfortable with 9% because it's way easier to just buy and hold and less risky.

And D. my point is that alot of educated people here who claim some understanding of the real estate market think that all property appreciates at the rate of inflation and reverts to the mean (they never did say how they derived that figure) and make major investment decisions based on that erroneous information. I'm not trying to say they're dumb, just encouraging them to do the math. Is that so wrong?

Stocks vs. real estate? I suggest it's alot easier to pick a property over a stock to get the same or way better return and way less risky. If my stock goes bust I got nothing. My property will always be there.

4% Appreciation my *ss

 

[honobob]

Maui Condo price up 15% YOY $538,500!!!!!!!!!!!!

Today is a good day to buy real estate in Maui.


Maui condo prices rise 15% - Pacific Business News (Honolulu):

 

[HFWR]

I'm looking under my sofa cushions for the $100k down payment as we speak...

 

[Notmuchlonger]

I'm looking under my sofa cushions for the $100k down payment as we speak...

What you mean they dont give out those no money down no job no collateral loans anymore?!

 

[honobob]

I'm looking under my sofa cushions for the $100k down payment as we speak...

Oh, come on! Didn't you read the OP? Open House Mortgage Man!! Or just go 3.5% FHA or 0% VA. Hey, some of you guys have lost more than that $100,000 since 1/1/2007. If you'd bought then you'd still have your $100,000 and a nice little $69,000 appreciation sweetener.Like manna from Heaven.

Nice to have the TV remote back but I wouldn't dig too deep into the couch if you have teenagers!

Mahalo

 

[JB]

Today is a good day to buy real estate in Maui.
Maui condo prices rise 15% - Pacific Business News (Honolulu):

But aren't you supposed to buy before the rise?


Here is a link to the data from the Real Estate Board

Q1 2008 compared to 2007
Single Family Home Sales Volume: -33%
Single Family Home Average Price: -13%
Single Family Home Median Price: -4%

Year End 2007 compared to 2006
Single Family Home Sales Volume: +5%
Single Family Home Average Price: -1%
Single Family Home Median Price: -9%

 

[honobob]

But aren't you supposed to buy before the rise?


Here is a link to the data from the Real Estate Board

Q1 2008 compared to 2007
Single Family Home Sales Volume: -33%
Single Family Home Average Price: -13%
Single Family Home Median Price: -4%

Year End 2007 compared to 2006
Single Family Home Sales Volume: +5%
Single Family Home Average Price: -1%
Single Family Home Median Price: -9%

What point is there in comparing apples to oranges? Maui CONDO prices rise 15%. Why are you using Single Family Home info?

Buy before the rise? At those prices jump on when you can and enjoy the 9%+ ride. People that wait too long end up as tenants posting on Craigslist rants and raves believing prices are going to return to 2003 prices and they'll snap them up then because they'll be such a deal. Waitaminnit.....these are the same people complaining that 2003 prices were rediculous in 2003. What makes them seem like such a deal now? Perspective?

 

[JB]

What point is there in comparing apples to oranges? Maui CONDO prices rise 15%. Why are you using Single Family Home info?

Isn't it obvious? You said that now is a good time to buy real estate on Maui but you left out some important data. Also note that median single family home values are slightly below Q1 2005 levels and are still declining.

Buy before the rise? At those prices jump on when you can and enjoy the 9%+ ride. People that wait too long end up as tenants posting on Craigslist rants and raves believing prices are going to return to 2003 prices and they'll snap them up then because they'll be such a deal. Waitaminnit.....these are the same people complaining that 2003 prices were rediculous in 2003. What makes them seem like such a deal now? Perspective?

Isn't it better that renters stay put if they think that prices are too high relative to their income? Don't forget that it's the folks that bought houses thinking that real estate can only go up that helped trigger the current economic mess.

 

[honobob]

Not My Words

It's slowly dawned on me that we've won the real estate lottery!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !

Buyaticket/buymybook/buyaticket/buymybook/buyaticket/buymybook

 

[Nords]

JB, I think you're being trolled. I'm sorry I even put up this thread...

 

[honobob]

JB, I think you're being trolled. I'm sorry I even put up this thread...

Why would you think that?

 

[honobob]

 

[Notmuchlonger]

Are you replying to yourself Crazyasshonobob?

Sorry I mean real estate mogul Honobob sir.

 

[honobob]

Are you replying to yourself Crazyasshonobob?

Sorry I mean real estate mogul Honobob sir.

I put on my robes and wizard hat.
I take off my pants and jacket.

 

[honobob]

Are you replying to yourself Crazyasshonobob?

Sorry I mean real estate mogul Honobob sir.

Breath deep, leave the front door unlocked, HELP is coming.

 

[Notmuchlonger]

4%

 

[honobob]

Are you replying to yourself Crazyasshonobob?

Sorry I mean real estate mogul Honobob sir.

You are sad.

 

[honobob]

Are you replying to yourself Crazyasshonobob?

Sorry I mean real estate mogul Honobob sir.

NM

 

[honobob]

Isn't it obvious? You said that now is a good time to buy real estate on Maui but you left out some important data. Also note that median single family home values are slightly below Q1 2005 levels and are still declining.

Yes but I was talking condos. And remember that 15% YOY increase involves properties that appreciated more and some less. What do you want, the address of the best purchase?



Isn't it better that renters stay put if they think that prices are too high relative to their income? Don't forget that it's the folks that bought houses thinking that real estate can only go up that helped trigger the current economic mess.

Actually it is people that bought financing they couldn't afford.

 

[Brat]

I'm glad you posted this tread. My brother has been toying with buying a condo in HI for his retirement home. It is helpful to hear what is, or is not, happening in HI real estate.

 

[ladelfina]

I used to think honobob was serious. Deluded, but serious. Now I realize he must be engaging in a strange form of performance art.

hb..
Actually it is banks that lent money they couldn't afford to lend.

these are the same people complaining that 2003 prices were rediculous in 2003. What makes them seem like such a deal now? Perspective?

The word is "ridiculous". I wouldn't be so pedantic if the word weren't so relevant. The prices were "rediculous" then. They are now "a deal" (or let's say 'affordable') only to those who have the massive income stream to support these properties at a price that's 2-3x their annual income.

Home sales on Oahu were off 28.5% from January, and were down 40.1% year-over-year.

Maui home sales ... were down 26.9% year-over-year.

Hawaii Real Estate Market Trends

There's nothing that says HI won't see 2003 prices, or 2001 prices, or 1994 prices.

 

[Nords]

I used to think honobob was serious. Deluded, but serious. Now I realize he must be engaging in a strange form of performance art.

And in that vein, folks, let's please stop feeding the troll...

 

[honobob]

Actually it is banks that lent money they couldn't afford to lend.

Chicken or egg. I axpect cummitment to obligatshun maid.






Hawaii Real Estate Market Trends

On a bright note, the median price for condos rose 3.4% to $335,000, tying the record high set last July. Year-over-year, the median price was up 4.7%.

CaChing!!!! Over $50 grand in the equity bank! No need feeding, I'm fine.

Half full/half empty? Equity Envy? The lazy Green for 2008?

 

[laurence]

Meanwhile median household income for the Honolulu area is still only $60k, eventually the math catches up. It takes more than speculators and slum lords to keep propping this up. But let's take the 9% growth forever number, and a "typical" current property value of $600k. A dozen years from now that will be over 1.75 million bucks, about an 11k a month mortgage, excluding taxes. Let's be generous and say somebody could swing 50% of gross on this (again, excluding taxes) and that would lead us to a household income of over a quarter mil required. Either that, or the Condo-tel/timeshare industry is going to really take off....

 

[honobob]

Meanwhile median household income for the Honolulu area is still only $60k, eventually the math catches up. It takes more than speculators and slum lords to keep propping this up. But let's take the 9% growth forever number, and a "typical" current property value of $600k. A dozen years from now that will be over 1.75 million bucks, about an 11k a month mortgage, excluding taxes. Let's be generous and say somebody could swing 50% of gross on this (again, excluding taxes) and that would lead us to a household income of over a quarter mil required. Either that, or the Condo-tel/timeshare industry is going to really take off....

laurencewill, how long is eventually? I can document the 9% growth over 30 years and suspect it goes back at least to the late 40's. Median income in 1978, $18,000 would be a guess and at 4% increases you'd be about $60K today. So riding my WayBack machine to 1978...."Well Sherman, do you really think this crappy $35,000 one bedroom condo will be worth over $400,000 in thirty years? At 50% of gross people would need to make $200,000 in 2008! Yeah and that disco movie guy John Travolta will be an Acadamy Award nominated actor piloting commercial jets across the country. Ha Ha Haaa Haaa Oh, and Hilton will be selling timeshares on Waikiki Beach!"

I'm not the first person in the forum to point out that Hawaii is not dependent on local wages. Name a person of wealth and there's a good chance they've got a place here, Oprah, George Harrison, Carol Burnett, The Donald, Etc. Who do you think are pricing out the "locals"?