- Aloha!
-
- Ever heard that
expression, “There's never been a better time?” Well,
I don't know about “never,” but now is a very good
time to buy real estate in Hawaii. We have not had to endure
the depth of the various housing crises felt in most parts of
the mainland, but prices have definitely come down. Way down.
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- In some cases,
particularly in the Hilo-side subdivisions, home prices have
dropped to about half of what they were in the boom of '05-6.
Those were the days when the streets were crawling with mainlanders
buying up everything in sight, at prices sometimes substantially
more than the asking price. Bidding wars were common, as the
buyers kept pouring in and all those now-famous sub-prime mortgages
dished out like so much money-candy.
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- Fortunately
for those of us who live here, most of the foreclosures we see
are the properties that were purchased by these speculators.
They used their 100% mortgages to buy at peak prices and were
ever so proud of their financial prowess. Some lenders were granting
up to 125% mortgages in those days. Small wonder that the whole
nasty house of cards collapsed.
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- So now those
who waited patiently on the sidelines can come in and pick through
the remnants of the party-gone-bad and get some great deals.
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- As it has been
all along, the properties that are the hardest hit in this devaluation
are those in the subdivisions where there is lots of inventory
from which to choose. Most properties up there in the “highly
desirable” category are still holding their value pretty
well, although the difficulty of getting a mortgage now is stifling
some of those sales, too. And in between “highly desirable”
and the subdivision properties are many homes, a great variety,
and the prices have dropped according to the usual constraints
of supply and demand.
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- Some media reports
would have you believing that there is simply no mortgage money
available now. That is not entirely true. There is actually lots
of it. What is true is the fact that you will need a credit score
of 7.0 or better, at the very least a 10% down payment, and excellent
job security. Well, that's for a slam-dunk mortgage. I'm sure
that right about now, it has not escaped the attention of the
lenders that “job security” has now become wishful
thinking. What job is secure any more? Maybe if you work for
the government, and even then you're position could be cut at
any moment.
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- So what else
is there? Your personal track record is a big item. If you're
looking for a mortgage for a personal residence, it will be a
lot easier than obtaining an investor loan. But investor loans
are still being done and we can vouch for that through recent
personal experience. The bottom line: If your mortgage broker
says it won't work, find a different mortgage broker. It has
been our experience that chances for a loan are better through
a broker than simply going to your bank. The broker will shop
a loan for you from many sources, and s/he knows just which ones
are the best suited to your specific needs. It should be easy
now to find mortgage brokers who do not work at the fringes of
integrity, since so many of them were busted in the recent fallout.
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- We would like
to encourage you to go back through some of the recent “Updates”
and read about the many things that can make or break a move
to Hawaii. Moving from Seattle to Hawaii is clearly not the same
thing as moving from Seattle to Orlando. Or Scottsdale. No, it's
more like moving to a foreign country, and that means learning
to live in a different culture from what you are used to. This
doesn't become very apparent during a week-long vacation at some
resort on the beach. It becomes apparent when you settle in to
your Island life. When you start to relate to your neighbors,
local merchants, the Building Department personnel, the school
administrators and faculty, and so on. It starts to become apparent
when you navigate through Island traffic on a day-to-day basis.
It becomes apparent at your local grocery stores, especially
the smaller ones.
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- Affordable
Paradise
includes a whole section on the many reasons why you might just
not want to live in Hawaii. It's good to feel these tropical
nuances through reading about them before investing the time,
money and energy in a move as dramatic as one to these Islands
out here in the middle of the ocean.
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- Curiously, some
of the little things that so attract most people to the Islands
when they visit here are the very same things that drive them
crazy later and inspire them to return to the mainland. So we
would like to encourage you to read, listen, observe and most
importantly of all, FEEL these things while you are still in
your current comfort zone. It's just much easier that way!
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- You are also
welcome to check in to the Affordable Paradise
Blog and talk story about your concerns. You can read some of
the many postings there and learn from the conversations of others,
too. You can also go on konaweb.com and punaweb.org and either
participate in the discussions or just eavesdrop for a while!
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- We wish you
all the best, and never forget to
- ~~~~
- Please
Live Aloha!
-
-
- Mahalo for
"listening."
- Skip Thomsen
& Ohana
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