Wow, real estate appreciation

[2daypoi]

I'm pretty amazed at the run up of real estate values. I have friends who built a house out in Ewa beach area and recently sold 2 years later... for double the price.

What's driving the market? Who's buying and where's the money coming from?

[Glen Miyashiro]

Re: Wow, real estate appreciation

We've been bemoaning the high price of real estate in Half-million-dollar housing for a while now. The driver is a combination of low mortgage rates, a good economy, and what I like to call the globalization of wealth. And who's buying? Everybody who can afford to. Apartment dwellers are moving out into low-end townhouses, townhouse owners are trading up to detached single-family houses, and so on. Plus, outside buyers are coming into buy their own little slice of paradise.

[ahola]

Re: Wow, real estate appreciation

Not for long!
With a price/rent ratio over 400 to 1 in many markets when 100 to 1 is normal,the real estate bubbles will be bursting big time.Millions of foreclosures and bankruptcies will shatter the debt-ridden economy.Now is the time to short mortgage banks and home builders and go long gold and commodities.
Get out of dollars and into euros,Swiss francs,yuan,etc.When the dust settles,those with the cash will be able to buy up million dollar homes for pennies on the dollar.Fiat currencies come and go,but gold has endured through thousands of years of human history.

[SouthKona]

Re: Wow, real estate appreciation

What's driving the market? Who's buying and where's the money coming from?

I just read that something like 25% of the homes on Maui and Kauai are owned by mainlanders. THAT'S who is buying!!

[TurquoiseDuck]

Re: Wow, real estate appreciation

People who live here are buying second properties which they rent out to pay the mortgages. It just happened to the condo next door to us. Some one who lives up the road bought it. They are going to rent it out and live at their other place. The owners of the place we rent live on the mainland. They just sold it. I do not know who bought it. The owner made a killing.

I have no idea how long this bubble can last before it pops.

That's my two cents worth.

[Miulang]

Re: Wow, real estate appreciation

I just read that something like 25% of the homes on Maui and Kauai are owned by mainlanders. THAT'S who is buying!!

That part is true. And most of the mainlanders are buying the real estate as "investment" (i.e., as rentals) so they have no intention of moving to Hawai'i and becoming contributing (tax paying) residents. All they're doing is making it that much harder for locals to buy their own homes as well as jacking up rents on what few rentals there are available.

But Maui and Kauai are looking at ways to control growth while building more affordable housing for people who live and work on their islands. I think the County governments have an obligation to kokua the workers because without the workers, the economy would not be as strong as it is today.

Miulang

[Oahu Real Estate]

Re: Wow, real estate appreciation

It's an interesting combination of things I think:
1. Low interest rates, so first time buyers can jump in.
2. Record low unemployment in Hawaii (lowest in 20-30 years)
3. Baby boomer money from the mainland (1 out of 3 of my clients are from the mainland).
4. People trading up with equity.
5. Foreign investment (due to the weak dollar).
I believe the forecast Paul Brewbaker made:
When we hit the median prices of the west coast, SF and LA, we will slow down, just as they will.
http://www.boh.com/econ/frameset.asp?name=replist
http://www.boh.com/econ/pdfs/econ0705.pdf