Oahu Rental Market Stabilizing in 2010

Many of the same economic factors that affect for-sale real estate across the state also impact Hawaii’s rental market.As median sales prices of existing homes began to stabilize in mid to late 2009, residential rental rates also began to level off.

According to Myrna Matsumoto,Vice President of the Prudential Locations Property Management Division, rental rates have remained at a lower level than in the period 2007-2008 but, at mid 2010, are showing a slight uptick.

The division Matsumoto heads up currently manages more than 1,600 units on Oahu, Maui, and Molokai, of which 575 are market residential properties and approximately 1,100 are affordable Low Income Housing Tax Credits units.

“Rents were driven down with the sliding economy,” Matsumoto said. “Job losses forced people to move back home or to move in with roommates to lower their housing costs, so the number of vacant units increased, causing rental rates to drop.We expect rates to remain steady for the next six months. However, subsequently, rents may increase due to a shortage of units as we are beginning to see investors selling their properties.”

Matsumoto noted that as much as 60 percent of Prudential’s rental inquiries come from out-of-state, the vast majority through the internet. “Our rental listings are all posted on the website pruhawaiirentals.com and generally the responses are emailed to us.A property manager will respond immediately with information on available properties that appear to fulfill the needs of the prospective renter. Ultimately we will be able to narrow down potential properties based on location and what the renter can afford.The guidelines we follow to determine what will be affordable for a renter are similar to those observed by lenders in qualifying buyers for a home mortgage.We have the capability to run a credit check for any inquirer nationwide.”

Matsumoto noted that out-of-state rental inquiries are primarily business-related relocations or potential buyers who plan to rent while reviewing the local for-sale market.

The Prudential Locations Property Management Division, which was established in 1979, specializes in long term rentals of single family homes, condominium apartments, and townhomes. The property managers provide full property management services to single unit owners as well as owners of multi-unit properties. Since 1992, the Division has also provided management services for Low-Income Housing Tax Credits properties, working closely with investors, non-profit groups, City and County, and State agencies.