[ talkstory Category ]
October 13, 2004

The Distant Dream of Home Ownership

Dreaming of home ownership in Hawai`i? Keep dreaming.

I'm on a Castle & Cooke mailing list which periodically delivers the current "deals" on new homes on the market.

Am I the only one who chokes when they see a single-family home going for easily over a half a mil?

With prices like $712,000, you'd think you'd be getting a beachfront home in Kahala -- not a 4-bedroom home in Mililani. Oh yeah, those Kahala homes easily demand well over a cool million. What am I thinking?

The housing market is totally insane. I remember in the not-so-distant past when a 3-bedroom single-family home was going for around $300,000. Now, for that same home, you'd be lucky if you can get it for under $500k.

Personally, I don't know how anyone in Hawai`i can afford to buy right now. But obviously, people can -- and people are.

Of course, townhomes are much more do-able, but isn't the American dream having a single-family home with two-car garage, a grassy lawn to mow and a white picket fence? Well, it was mine. But now I'm wondering if I have to realign my dreams a little closer to reality -- at least until the housing market gets a little more real.

For now, I guess renting isn't so bad.

Posted by Donna at October 13, 2004 09:52 PM

Comments

 
Posted by kane on October 14, 2004 6:41 AM:

Donna, I don't know how others are making that dream a reality.

I remember when my parents bought our first family home; a huge two-story, 4 bedroom, 3 bath, 2 car garage, located on a secluded hill in Kaneohe. The large picture-windows offered views of Kaneohe Bay and the Koolau Range.

Sadly, in today's market, the total price that my parents paid for their home wouldn't be enough for a down payment.

 
Posted by Beth on October 14, 2004 10:29 AM:

Donna, don't let those people out there scooping up new real estate fool you. They're doing anything they can to purchase extremely overpriced real estate by taking out things like Adjustable Rate Mortgages. With an ARM, you can get a house that would normally be outside of your budget because "Hey, I only have to pay 3% interest!", but when the ARM adjusts up to 8% or 9%, all of those houses are going to be in the foreclosure section of the paper, and you'll be able to scoop something up because of a bank repossession.

They aren't making more money than you are. They're just being alot more stupid with it.

 
Posted by lisa on October 14, 2004 3:45 PM:

I so know what you mean. We decided to buy a townhouse in Kane`ohe because Kailua condos were out of our price range (and 2/3 the size). Forget about a house- unless you really want to live in Ewa or Waianae.

It's barely been a year, bu at the time of purchase t the condo was appraised above what we paid, and last month our nieghbors were asking $50,00 more than we paid for an almost identical unit with fewer upgrades. In other words, if we waited until this year to buy, we couldn't afford to live where we bought.

I honestly think it's the mainland and local investors who have caused prices to go nuts. They don't trust the stock market, so they buy up homes here, which raises rent and lowers availability, and prices the rest of us out.

For another laugh, check out Lanikai house prices at www.hicentral.com. The cheapest one there's been on the list for a year, and in that time asking went from 700k to over a mil.

Even in Waimanalo you can't get a fee simple home for under $500,000.

We've been quite happy with our townhouse, though, and hopefully in 5-10 years we'll have enough equity built up to move to a house (or at least a 3 bedroom place). It's a foot in the door, at least.

 
Posted by Ryan on October 14, 2004 7:30 PM:

I'd never buy now. The low interest rates are pushing folks to borrow more than they should, and with more money running around than inventory, sellers are more than happy to inflate their prices. I agree with Beth... there's a lot of irrationality in the market right now, and when the bubble bursts - and it always does - there'll be a lot more opportunities for those who waited it out.

That's not to say that "only" $350,000 for a decent home is cheap. Even at that price, I think homeownership will be out of our range for another 20 years, after we've paid down debt/student loans and older kids allow Jen to return to work. For now we're a single-income family of five living with a parent, one of Hawaii's trademark "multigenerational households."

My fantasy is working independently and living on the Big Island, where $250,000 still gets you a lot of house and land in a decent neighborhood. Definitely not in Kona, and perhaps not in Hilo, but I'd be happy in the country... as long as there's broadband.

Check HawaiiThreads.com for posts by Craig Watanabe on how he gave up the rat race in Honolulu for country living in Kea`au. (Here's one such post.) I swear, when I'm stuck on H-1 West in a six-lane parking lot, the man's my hero.

 
Posted by Michael Shiroma on October 15, 2004 6:30 PM:

I'm 49 and was a passenger on this "roller coaster" of pricing from the mid-1980s through 2000.

One could review prices for specific condominium and housing projects during this time period and see a pattern of "peaks" and "valleys."
We may now be on either side of a "peak."
I suspect the price of airline fuel and other energy will stimulate a descent in the next few years.
However, mortgage rates will probably increase, reducing borrowing power.
So, one strategy would be to be patient, stay put (if you have a nice landlord)and save money to maximize your down payment.

Your site always makes me feel better, Mike Shiroma

 
Posted by Kainoa on October 15, 2004 6:46 PM:

My husband and I felt the same way about home ownership so we moved off of O'ahu and couldn't be happier in our new and AFFORDABLE home. The prices are NUTS!

 
Posted by Jeff on October 18, 2004 6:15 AM:

Grew up in Hawaii. Born and raised. Would just about do anything to be able to live and raise my family back in the islands, but the cost of living makes it impossible.

Currently live in Waco, TX. Just bought 2500 square feet for $123,000. It gives me the opportunity to enjoy a great life, while looking forward to our yearly trips "home". We'll be back in about 75 days...:-)

My parents originally bought up Hawaii Loa Ridge above Kahala (Hale Koa Drive) for 72K and sold for 550K 20 years later. Crazy. Today that house would probably get 1.5 mil....

I would still think it would be worth it...if I could get a good job and be able to support my current lifestyle.

I had the fortune of living in a great home, growing up in Kahala/Hawaii Kai, going to and graduating from St. Louis, playing football at UH...

VERY BLESSED!!!!

I thank God that I had the opportunities I did growing up. Would not trade the 60's, 70's and 80's for all the money in the world.

I also want to thank KINE Radio (Internet Feed)...it's on in my office all day...go Brickwood...

Aloha,
Jeff, The Kamaaina Haole
St. Louis Class of 79'

 
Posted by Lorilei on October 23, 2004 1:19 PM:

Grew up on Oahu, moved to Kihei, Maui in 2000 and bought a condo in 2002 for $132,000. Now, the units are going for $275,000. What's up with that? My husband and I are selling since we have a new addition to our Ohana. But where are we going? You can't buy right now, the homes are outrageously high. We have two options; Remain on Maui and rent, or move to Las Vegas and buy. How you figga? Good luck to you on your house hunting. It will happen. Aloha,
Lorilei Dunston

 
Posted by Lorilei Dunston on October 23, 2004 1:21 PM:

Grew up on Oahu, moved to Kihei, Maui in 2000 and bought a condo in 2002 for $132,000. Now, the units are going for $275,000. What's up with that? My husband and I are selling since we have a new addition to our Ohana. But where are we going? You can't buy right now, the homes are outrageously high. We have two options; Remain on Maui and rent, or move to Las Vegas and buy. How you figga? Good luck to you on your house hunting. It will happen. Aloha,
Lorilei Dunston

 
Posted by johnp on October 29, 2004 4:40 AM:

Read this Tycoon in the making on the CNNMoney site. This is a young guy buying homes in Hawaii.

Post a Comment

Name:


Email Address:


URL:


Comments:


Remember info?



« NaNo Turns Six | Introducing Our Daughter... »
[ HawaiiAnswers.com - You ask, Hawaii answers. ] [ HawaiiAnswers.com - Hawaii's first online news source. ] [ HawaiiAnswers.com - Let's talk story. ]
Main Page  ::  © 2002-2004 HawaiiStories  ::  E-Mail