While real estate in most of the country is suffering, Oahu real estate remains strong, with low inventory and many sales.  While the number of sales has dropped since last year, so has the overall inventory.  The number of homes for sale on Oahu has dropped 19.3% since last year, from 2,311 down to 1,866. That is only a 5.5 months supply.  

A very interesting comparison is to view the sales by region.  Below I list the total sales and median prices in each region, with a comparison of last year to this year.  It's listed in order from highest increase in prices to highest decrease in prices (far right column). 

As you might expect, the higher priced areas like Hawaii Kai, Diamond Head, and Kailua rose most in price, while the lowest priced areas dropped.  As the national and global economies remain weak, those most effected are those at the lowest income levels.  Another factor may be the new construction that is available in West and Central Oahu, whereas East Oahu has nothing new available.  It's basically built out. 

The most recent Allure Price list below.  Let me know if you're interested in the Allure Waikiki!

The WSJ reported today that Senators Churck Schumer (D., N.Y.) and Mike Lee (R., Utah) are preparing to introduce a bill today that would give residence visas to foreigners who spend at least $500,000 in cash to buy houses in the U.S.  These purchases can have a loan attached, but the buyer has to have at least the $500k as a down payment. 

That basically covers every property on Oahu.  Almost any condo or home is over that price.  Just 2 months ago, a Swedish client of mine was planning to buy property, but couldn't figure out a way to get residence in the US so that he could live in his $1mil+ home.

There is already a visa programs that allow foreigners to enter the U.S. if they invest $500k in a new business that creates jobs.
From the WSJ:

"Foreigners on the new visa wouldn't be able to work unless they obtained a regular work visa through the normal process. They'd be allowed to bring a spouse and any children under the age of 18 but they wouldn't be able to stay in the country legally on the new visa once they sold their properties... The idea has some high-profile supporters, including Warren Buffett, who this summer floated the idea of encouraging more "rich immigrants" to buy homes. "If you wanted to change your immigration policy so that you let 500,000 families in but they have to have a significant net worth and everything, you'd solve things very quickly."

The effect on Hawaii real estate would be enormous.  I get calls and emails once a week from European and Asian buyers who want to live in Hawaii full time, but can't find a way to get in.  Currently, the longest they can stay is 6 months. Then they have to return home, which is a real discouraging factor when internationals are considering retiring in Hawaii. 

As far as the real estate market goes, bringing in rich immigrants would be a huge boost to sales and prices.   These types of buyers have the ability to spend millions on beach front homes.  They are just the type of buyers we need. 

The effect - I predict there will be 10,000 new Japanese, Chinese, Canadian, and Australian buyers entering our market, causing prices to rise 20% in just a few years.  Serious. 

I visited Koko Isle yesterday with a client to view a nice 2 bedroom marina front unit that is listed for $649,000.

The first thing I noticed is that the entire complex has been freshly painted, and the place looks great again. For about the last 10 years, Koko Isle has been a little bit drab, with chipped paint and fading colors that looked a lot like US Army barracks. But check out how nice it looks now with some new colors and refinished fencing.

With the nice new facelift, these marina front units are ready to compete with Kuapa Isle, which has been a much nicer complex for several years.  Each Koko Isle unit that is on the water has (or can have) it's own private dock, which will accomodate a boat as wide as the unit itself, usually around 25 feet or so.

I made a little video while I drove around the complex, so you can see how it looks now. Also added some pictures from the current listings in Koko Isle.

The Ilikai Hotel is one of Waikiki's most famous hotels.  In 1964, the Ilikai Hotel & Suites in Honolulu was built to be Hawaii's finest high-rise hotel, but over the years, it was neglected and became a run down heap of bankruptcy.  

Not anymore.  

The Ilikai has been renovated and is now a beautiful hotel again.  The entire lobby and grounds were redone with modern finishes, and now it shines.

 I took this video (with my phone) just to show the new look of the lobby and grounds. Sorry about the shakiness of the video.

Right now you can buy a nice ocean view 2 bedroom unit for about $750,000.  The rents in this building run about $1500 a week, and the management company takes 15%.  Most units are booked quite solidly throughout the year.  The Ilikai is one of Oahu's few legal vacation rentals - meaning you can use a management company to rent it out on a weekly basisn which should cover your mortgage with about 25% down.  Plus you get to use it whenever you're here! 

 Call me to inquire about owning a unit at the famous and now rejuvinated Ilikai! 

The Ilikai was designed by the architect of Seattle's Space Needle, John Graham. The Ilikai's was featured in the original 70's television series Hawaii Five-0's, opening credits.

Rarely Available 2 Bedroom 2 Bathroom Penthouse...

$2,498,000

• 2Beds
• 2Baths
• 1,000SqFt
• 2.88Acres

Condo / Townhouse

Honolulu, HI

Rarely Available 2 Bedroom 2 Bathroom Penthouse Unit In The World Famous And Popular Ilikai. Fant...

View Listing

Tranquility And Beauty Abounds In This 20th Flo...

$1,800,000

• 2Beds
• 2Baths
• 1,240SqFt
• 2.88Acres

Condo / Townhouse

Honolulu, HI

Tranquility And Beauty Abounds In This 20th Floor Ocean And Duke’s Lagoon Waterfront Unit. This D...

View Listing

First Open House Sunday June 17'th 2-5pm. Spec...

$1,598,000

• 2Beds
• 2Baths
• 1,240SqFt
• 2.38Acres

Condo / Townhouse

Honolulu, HI

First Open House Sunday June 17'th 2-5pm. Spectacular Ocean View Sunset View. Clears Adjacent B...

View Listing

Beautifully And Extensively Renovated 2 Beds 2 ...

$1,295,000

• 2Beds
• 2Baths
• 1,240SqFt
• 2.88Acres

Condo / Townhouse

Honolulu, HI

Beautifully And Extensively Renovated 2 Beds 2 Baths With Great Mountain, City And Partial Ocean ...

View Listing

Opportunity! Rarely Available 2bdrm/2bath In Pr...

$1,288,000

• 2Beds
• 2Baths
• 1,240SqFt
• 2.88Acres

Condo / Townhouse

Honolulu, HI

Opportunity! Rarely Available 2bdrm/2bath In Preferred 10 Stack With Unobstructed Ala Wai Yacht H...

View Listing

Beautiful 2bd/2ba, Corner Unit, With Captivatin...

$1,249,000

• 2Beds
• 2Baths
• 1,240SqFt

Condo / Townhouse

Honolulu, HI

Beautiful 2bd/2ba, Corner Unit, With Captivating Mountain, City And Partial Ocean Views In The Wo...

View Listing

Fully Remodeled In 2014. Beautiful View From La...

$1,111,000

• 1Baths
• 620SqFt

Condo / Townhouse

Honolulu, HI

Fully Remodeled In 2014. Beautiful View From Lanai Facing Marina/ocean Side.

View Listing

Newly Renovated In 2014. Modern Accents, High C...

$1,100,000

• 1Baths
• 620SqFt
• 2.88Acres

Condo / Townhouse

Honolulu, HI

Newly Renovated In 2014. Modern Accents, High Ceilings Bring Style And Luxury. Incredible Views O...

View Listing

Great news for Honolulu!  Honolulu is the #31 City in the World and #1 in America for quality of living!

While Vienna has the top spot the world's best quality
of living, according to the Mercer 2010 Quality of
Living Survey. Zurich and Geneva follow in second and third
position.

Mercer conducts the ranking to help governments and multi-national
companies compensate employees fairly when placing them on international
assignments. The rankings are based on a point-scoring index, which
sees Vienna score 108.6 and Baghdad 14.7. Cities are ranked against New
York as the base city, with an index score of 100.

This year's ranking also ranks the cities with the best eco-ranking
based on water availability and drinkability, waste removal, quality of
sewage systems, air pollution and traffic congestion. Calgary is at the
top of this list, followed by Honolulu in second place, which puts us #1 in America! 

Did you catch that?  Honolulu is the #2 city in the WORLD for Eco ranking! 

“A high-ranking eco-city optimises its use of renewable energy sources
and generates the lowest possible quantity of pollution (air, water,
noise, etc). A city's eco-status or attitude toward sustainability can
have significant impact on the quality of living of its inhabitants.”

Maybe it helps that our State government will give you a 35% tax credit for installing solar hot water? 

In the US, Honolulu is the city with the highest quality of living,
followed by San Francisco (32) and Boston (37). Chicago and Washington
share position 45, and New York is in position 49.

This index is used by business to determine how to compensate employees, where to put them, etc. This is great news for Honolulu business, and thus, for Honolulu real estate. 

 Here is the list up to #31: 

Getting a home sold is rarely a simple task. This is particularly true when in the midst of a buyer's market, such as the one we are experiencing right now. When the market is saturated with relatively low-cost homes for sale, it is more important than ever to find ways to make a home stand out.

Making a few simple and inexpensive repairs can significantly improve a home owner's chances of getting their home sold quickly. Whether you're selling in Hawaii or Downtown Austin, it's a good idea to check with a local Realtor regarding the most sought after styles and colors within your region.

Repair Floors as Needed

Making repairs to the floors in your home doesn't require tearing everything up and starting over again. Just make sure all the carpeting, tile and grout throughout your home is cleanedm and replace cracked tiles or worn out carpet and vinyl. If you have hardwood floors in your home, you might need to refinish some of the surfaces to restore the luster.

Replace Doors and Windows as Necessary

The condition and quality of your doors and windows is important to potential buyers for two primary reasons: security and energy-efficiency. So it's essential to ensure your doors and windows are working properly and are in good condition. Worn out screens and hardware should be replaced and the area around your doors and windows should be re-caulked as needed.

Add a Fresh Layer of Paint

You'll be amazed by the facelift that a fresh layer of paint can give to your home. In addition to giving your home a clean and fresh look, you can also paint the home in colors that will appeal to the largest number of buyers. Stick with neutral, warm colors and you will give your home a major boost within the market.

Bring the Kitchen and Bathrooms Up-to-Date

Gutting your kitchen and bathrooms is an expensive process, but you don't have to go that far to bring these rooms up-to-date. Simple things such as replacing light figures, hardware and faucets will help create a current look that is sure to attract a larger number of potential buyers. You can buy nice looking stainless steele hardware for your kitchen online for about $2 per drawer pull.  

About The Author - Eric Bramlett is broker and co-owner of One Source Realty, a boutique real estate firm with a focus on Steiner Ranch Austin.

Via Tim O'Leary, Honolulu Home Loans: 

HUD previously had announced that Fannie & Freddie would be discontinuing HIGH BALANCE Loans.  Now Fannie & Freddie have decided otherwise.

The CONFORMING Loan limit will remain at $625,500 and instead of cancelling the HIGH BALANCE, they lowered it.  This is great news for the Oahu housing market, especially in higher markets like Hawaii Kai, Diamond Head, Manoa, and Kailua, where high balance loans are very common.  Prices in these neighborhoods start around $700k and go up to $15 million.

The new loan limits effective 9/1/2011 are:

Interest Rates for today from Honolulu Home Loans:

Please contact Tim for Home Loans in Hawaii.  They give their clients a FREE Home Warranty from American Homeshield!

Some clients of mine recently closed on a house in Ocean pointe for $680,000.  The VA loan at 4.25% with zero closing costs out of pocket has a monthly payment of $3443.50.  Add in the insurance and taxes, and their total payment is $3790.60.

The house they bought is 4 years old, 2900 sqft, with 4 bedrooms, 3 baths.  That model house, similar ot this one shown, is currently for rent  on Craigslist for $3800.

They are already $10/month under the cost of renting, but then subtract the 35% Federal tax deduction they get on their mortgage, and they are several hundred dollars under the cost of rent. 

Why waste your BAH on rent when you can buy this great house for less per month? 

I sat in a signing with a client this week and was reminded that VA loans are assumable by the next person buying the property, if they have VA eligibility.  That means they can apply for and take over the loan that the owner has been paying on, at the same rate.  My clients' rate was 4.25%, fixed for 30 years.  

In a few years, when rates go up to 6%, 7%, or even 10%, that assumable loan will make their house a LOT more affordable than others. 

FHA Loans are also assumbe.  From an FHA website:   You can assume an existing FHA-insured loan, or, if you are the one
deciding to sell, allow a buyer to assume yours. Assuming a loan can be
very beneficial, since the process is streamlined and less expensive
compared to that for a new loan. Also, assuming a loan can often result
in a lower interest rate. The application process consists basically of a
credit check and no property appraisal is required. You must
demonstrate that you have enough income to support the mortgage loan. In
this way, qualifying to assume a loan is similar to the qualification
requirements for a new mortgage loan.

How much difference does it make?  On the average $500,000 loan on Honolulu real estate, with a  4.25% fixed rate, the payment is $2459.70. 

If the rate goes up to 6%, the payment is $2997.75, a difference of  $538.05 a month!  That means the house with the 4.25% rate costs effectivley about the same as one that is $100,000 less, at 6%. 

Now what if the rates go back up to 7%, as they were in 2001? The payment goes up to $3326.51, a difference of  $866.81 a month!

You can see where this is going.  The assumability feature of VA and FHA loans will be a huge advanatage for those sellers in a few years when rates go up, and I don't think anybody doubts they will go up eventually.