Hawaii Housing Bubble Hoax

[honobob]

OK I'm calling the HOUSING bubble a total HOAX in San Francisco, Honolulu and established neighborhoods in Las Vegas!!! I don't have direct info on other areas but I see Idaho and Utah etc. reporting double digit appreciation so I don't know.

My last two purchases in Honolulu in 2003 and 2004 are well over my purchase price. I'm in town now filling my vacant studio. Arrived Sat and got my Craigslist ad in on 6/22 for a furnished studio for $995. I haven't taken it off yet so if you search you can see the pictures of a 200 sf studio. I was renting for $1000 but let the doom and gloom get to me so I dropped $5 bucks thinking I might have to go lower.

NOT. Four days later I have Four deposit checks. I probably could have raised the rent to $1050. So I chose my person today and had to tell 3 people sorry. That's hard as all were great prospects.

So I'm looking at another purchase but even tho there's alot on the market prices are holding firm and some people are trying to get next years appreciation in advance. I was talking to a realtor who is selling a one bedroom here and she says she has a stack of offers (low ball) on her listing. Says there's a lot of the new realtors working with Foreclosure chasers thinking they're going to make the next Trump deal.

So from my experience making actual market (and slightly above) offers in SF and Honolulu and actual purchases in 2003 and 2004 I think I can safely say that the bubble has been overhyped.

[ladelfina]

honobob, you go, girl!! err.. guy.

The Oil Drum | Hawaii: Peak Oil Canary in a Coal Mine

[tryan]

hmmm, a grand a month; what's the monthly negative cash flow on that "gem"?

[CuppaJoe]

Honobob! I was just about to call in the Mounties to search for you, haven't seen a new thread by you in donkey's years.

Thanks for sharing that Craig's list item with us. 200 sf, is that smaller than the average dorm room? I get it, the value is in the furnishings and the right to keep a dog or cat--that would do it for me but I don't think I could go back to dorm-style living. So what do normal size studios go for in the same area? Last time I checked in my area, the rent is $1600-$2200.

Quote:

Originally Posted by tryan hmmm, a grand a month; what's the monthly negative cash flow on that "gem"?

Tryan, have you seen the "gem'!? I'd be very curious to know what comparable units go for in Boston or Cambridge.

[tryan]

Quote:

I'd be very curious to know what comparable units go for in Boston or Cambridge.

You'll get closer to 1000 sq ft for $1000. Bank short sales are running 160k-170k for these "gems". No, they don't cash flow either....yet.

[Martha]

Bob, how much did you pay for the property? How much is your mortgage, property taxes, insurance and other obligations on a monthly basis? If there is negative cash flow, how do you finance it?

[honobob]

Quote:

Originally Posted by CuppaJoe Honobob! I was just about to call in the Mounties to search for you, haven't seen a new thread by you in donkey's years. Thanks for sharing that Craig's list item with us. 200 sf, is that smaller than the average dorm room? I get it, the value is in the furnishings and the right to keep a dog or cat--that would do it for me but I don't think I could go back to dorm-style living. So what do normal size studios go for in the same area? Last time I checked in my area, the rent is $1600-$2200. Tryan, have you seen the "gem'!? I'd be very curious to know what comparable units go for in Boston or Cambridge.

CuppaJoe Martha

I bought this place in 2004 for about $270K for my mother to live in. It's a 2/2 that can be divided into a one bedroom and the master as a studio that has a separate entrance. A nice setup even if you use it as a 2/2.

There are several buildings in Waikiki with similar setups. A lot of retirees live in the one bedroom and use the studio to pay the mortgage.

I financed as owner occupied since my mother was to live in it and actually did for a little more than a year. Investor financing is available at pretty good rates.

NEGATIVE CASH FLOW ONLY MEANS SOMETHING IF YOU CAN'T AFFORD IT!!

I do cash flow on this at almost $1,000 a month. Two are on the market in the mid $400's. The highest ever sold was $410 and I've made two offers on one of the ones on the market but they want next years appreciation now. Comps support a $400,000 market value and I'm willing to go a little over.

Cuppa, are you critizing my decor? It's all Costco/Ross/Home Depot. When I'm here full time I may do monthly vacation rentals. I can pretty much double my rents but would have to upgade to at least Tommy Bahama.

On the same street is a pet friendly apartment building. They are about 400sf and start out at $1195. SF gets higher rents but a 2/2 there would be in the $800,000's. I've only had one tenant with a pet(cat). The coment I get most is that the place is CLEAN.

Well now I have two weeks for FUN and to look for another property.
I'll keep you posted!

A.....lo.....ha from Honobob!

[calmloki]

Quote:

Originally Posted by honobob I bought this place in 2004 for about $270K... Well now I have two weeks for FUN and to look for another property. I'll keep you posted! A.....lo.....ha from Honobob!

Ok Honobob - i'll show you mine if you show me yours.
Monmouth Charmer
Bought 4-2001 for $85k, probably sell for around $155k or so in today's market.

I looked through the days of SF postings for your ad and thought i found it but didn't see pictures..., right rent amount and size, but you had pics? link?

[CuppaJoe]

Quote:

Originally Posted by honobob .... Cuppa, are you critizing my decor? It's all Costco/Ross/Home Depot. When I'm here full time I may do monthly vacation rentals. I can pretty much double my rents but would have to upgade to at least Tommy Bahama. ....

No, Honobob, your decor is fine, looks like you've done everything in the book to help make a small space look bigger. I'll let others evaluate the numbers but my question is, are you doing this as investment property to again win the housing lottery by selling really high, what is your timeline?

I think your premise has been discussed recently and several people have agreed that some places are not dropping in value like most of the country. I suspect S.F. has a different timeline for a condo bubble which will depend on the large number of baby boomers, techies and general rich people who seem to have an insatiable demand for condos, apts. and pieds a terre. The demand could collapse, say 20 years down the line when the population pressures ease up.

Calmloki, thanks for showing yours; it gives me hope that I can find a nice place to move to in retirement.

[haha]

Quote:

Originally Posted by CuppaJoe I think your premise has been discussed recently and several people have agreed that some places are not dropping in value like most of the country. I suspect S.F. has a different timeline for a condo bubble which will depend on the large number of baby boomers, techies and general rich people who seem to have an insatiable demand for condos, apts. and pieds a terre. The demand could collapse, say 20 years down the line when the population pressures ease up.

Not to worry, Cuppa. By then Mexicans will have climbed the ladder and they will buy these.

Ha

[honobob]

Quote:

Originally Posted by calmloki Ok Honobob - i'll show you mine if you show me yours. Monmouth Charmer Bought 4-2001 for $85k, probably sell for around $155k or so in today's market. I looked through the days of SF postings for your ad and thought i found it but didn't see pictures..., right rent amount and size, but you had pics? link?

Nice looking house. Pets outside!!! REAL pet guardians keep them inside and take better of the property.

My listing in on the Oahu craigslist posted 6/22 Sun? for $995. If I was smart I'd link but not a tekkie. I should take it off or be lazy and let it expire.

[honobob]

Quote:

Originally Posted by CuppaJoe I'll let others evaluate the numbers but my question is, are you doing this as investment property to again win the housing lottery by selling really high, what is your timeline?

CuppaJoe everyday is Lotto Day 9-11% annual compounded appreciation!!

No "set in cement" plan. As long as rents go up, the renters keep paying the mortgage, appreciation stays in the 9% range and I'm having fun then there's no need to sell. I will probably use two of my properties to move to the "Gold Coast" on the water here but even that is just a maybe. My realtor is showing me a couple of them just so I have a better idea if that is even what I want.

I always bought only what I would live in so the one plan was to live in each unit and then sell and take the $250K tax free and then 1031 exchange the excess in another property and keep doing this 4 times every 10 years is what I think the limit is. Or I could just keep and refi or Heloc up to the rent amount every few years.

[tryan]

Quote:

I do cash flow on this at almost $1,000 a month. Two are on the market in the mid $400's. The highest ever sold was $410 and I've made two offers on one of the ones on the market but they want next years appreciation now. Comps support a $400,000 market value and I'm willing to go a little over.

Why anyone would spend 4k/month to own when they can rent the same unit for 1k/month is beyond me.

I imagine the vacation rental market would triple or quadruple your rents. Only way I could get a furnished unit to cash flow was as a "motel alternative". Catering to business clients, divorees, and home buyers between sales. The vacancy rate ran around two fold but the increased rents more than accounted for the vacancy. Also nice if you want to use the place occationaly.

[honobob]

But Schiller only counts single family homes! Oh, it also totally excludes Hawaii. Hey Clifp, only an 8.9% drop on SFH's. No reduced taxes for them. So if I put $200,000 on a $1,000,000 house that appreciates 71.7% in one year I have an asset worth $1,717,000 so my return would be......real estate is too much math!


Thursday, July 31, 2008 - 2:41 PM HAST

Pacific Business News (Honolulu)


The price of condominiums on Maui rose while single-family home prices declined during the first half of 2008, according to a new report from Prudential Locations.
The median price of condominiums rose 9.5 percent to $575,000 in the first half of 2008, Prudential Locations said Thursday. Most sales took place in the Wailea/Makena and Kihei areas. Prices in those communities appreciated 71.7 percent and 13.7 percent, respectively.
Condo sales were down 17.8 percent, with 507 sales in the first half of 2008, compared with 617 in the same period a year ago.
Home sales did not do as well, according to the report. Sales dropped 25.9 percent. There were 477 home sales in the first half of 2008, compared with 644 during the same period in 2007. Prices decreased 8.9 percent to $590,000.
The majority of the single-family home sales took place in Wailuku, Kihei and Kahului, the report said.

[eridanus]

Wow. With that kind of annual appreciation, Hawaii will be able to buy California in a few years.

[laurence]

Definitely, at that rate a $500k condo will be worth a cool $100 million in ten years.

[honobob]

Quote:

Originally Posted by laurencewill Definitely, at that rate a $500k condo will be worth a cool $100 million in ten years.

Even then I don't think Hawaii will be buying California. Do you realize how many almost $100,000,000 single family homes are in just San Francisco?

[cute fuzzy bunny]

Couple more earthquakes and we might become another one of the hawaiian islands.

By the way, how many islands ARE there exactly? The hawaii tourism site says six. Wikipedia says 8 main islands and a hundred and something smaller ones.

[clifp]

8 but only 6 are open to tourists. Visitation to Ni'ihau is restricted to Native Hawaiian and invited guest. Kaho'olwoe for years was used as gunnery range by the Navy and Air force and has recently be cleaned up, but access is currently restricted.

I still haven't been Moloka'i

[REWahoo]

Quote:

Originally Posted by clifp 8 but only 6 are open to tourists.

Ahah! That explains why the beaches are so darned crowded...