Equity Matters: Lucky Live & Buy Hawaii!

Judy Meredith
Branch Manager
Direct: (808) 222-7903
NMLS ID: 716323

Each time I meet with a potential Homeowner, I am asked the question “Do you think it’s a good time to buy?” Although the saying goes, “Lucky Live Hawaii,” I prefer to expand this by saying “Lucky Live and Buy Hawaii” because Hawaii is extremely unique and the real estate market behaves differently here than it does in other parts of the country.

Real estate purchases or investments are always an excellent idea in the islands and if you are fortunate enough to have all the pointers aligned to where you are in position to buy, then you are presented with a magnificent opportunity that should not be missed. It is a true gift to be able to own a property in paradise.

So, the question is….what makes Hawaii the perfect place to buy real estate? 1. Aloha is Real For the last seven years, the Aloha State landed the top rating as the “happiest state in the country” by Gallup’s National Health and Well-Being Index.

The report was based on five key criteria: career satisfaction, social relationships, economic circumstances, community environment and physical health. Of the benchmarks that each state was judged by, Hawaii adults had the lowest occurrence of depression, the longest life expectancy, and the highest social well-being score. The state was among the top five states for income growth, low divorce rates, underemployment and median credit score. Experian reported Hawaii’s average FICO credit score as 723, which is considered excellent.

2. Exorbitant Home Value Appreciation Based on a report from the Honolulu Board of Realtors, the change in median home sales price between 1985-2018 for a single family residence was 398.1% and an average annual appreciation of 4.84%. For condominiums and townhomes, it was 367.7% median home sales price change and 4.64% average annual appreciation. This resonates that it doesn’t matter whether you buy a single family home, a townhouse, or condo in Hawaii; the appreciation rate over time is about the same, as long as you are the owner.

3. You are already Paying Someone else’s Mortgage -The cost of living in Hawaii based on various reports is about 89% higher than other states in the USA, and so are the home leasing rates. Currently, the average rent cost for a 2 bedroom apartment in Kaka‘ako spans around $2500 per month, a 4 bedroom home in Kapolei falls around $3500 per month, and a 3 bedroom home in Hawaii Kai scales $4000 per month. You could be purchasing a home in those neighborhoods and have a monthly mortgage payment which is the same or slightly higher than your current rent payment.

4. The Lowest Property Taxes in the Country – Based on a report from the finance website Wallethub.com, Hawaii was ranked #1 as the lowest effective real estate tax rate in the nation. As an owner-occupant homeowner, you can benefit from the City & County Homeowners’ exemption to decrease your property taxes further. For the investors, a lower property tax means better cash flow if you are renting your home to tenants.

5. The Climate is Perfect – Since the islands do not experience the traditional four seasons and the weather that comes along with it, Homeowners are able to save in the abhorrent costs associated with winterization. We do not need to adapt for cold weather by preparing for plumbing freezes and weather-stripping to prevent cold air from entering the home. Further, most homes in Hawaii need very little in the form of heating and cooling systems. Many homes now have the luxury of air-conditioning, but countless homes choose to just open the windows and use fans to save on energy costs. Another added bonus to island living, is the extraordinary availability of activities for you and your family that are of little or no cost hiking, biking, surfing, bodyboarding, swimming, beaching, picnicking in the park and sight-seeing are just to name a few. With limited exceptions carved out to accommodate the federal government, all Hawaii beaches are open to the public. “They belong to No One and Everyone”. County governments and private developers are required to provide public access and parking in areas where the shoreline is dominated by residential dwellings. This allows Kama’aina (residents) and visitors alike to take advantage of the state’s open beach policy to visit some of the most breathtaking and scenic landscapes in the world.

Questions for Judy Meredith, the Mortgage Professor? Email your questions, I welcome the opportunity to help you find solutions. jmeredith@prmg.net