Tuesday, June 23, 2009

Hawaii Kai Holds Value as a Real Estate Investment

There was a very interesting article this month in the Honolulu Magazine titled, "How Much is Your Home Worth Now?" While the appreciation in Lanikai (Kailua) and Manoa (above U of Hawaii) was not surprising, an investment in the Ewa Plain would have produced an excellent return in the last 60 years. A home in Mililani, however, would not have been as lucrative an investment if owned since 1969 (rather than 1948). Of course, the types of houses are all very different, as are their locations and sizes.

Their example in Hawaii Kai was my main interest. It shows a 3 bedroom/2 bath home, 1252 sq ft, 5,995 sq ft lot, purchased in 1968 - as adjusted for 2009 dollars - at $248,772 - offered for sale today at $599,000 (fee simple). The home shown is at the base of a hillside, and is a modest size and lot for East Oahu, and Hawaii Kai in particular. Obviously, Koko Kai, Portlock, and some marinafront communities in Hawaii Kai will have homes worth considerably more, and at better appreciation rates. But the author chose this as representative of Hawaii Kai single family homes.

Since we know Hawaii Kai has better stability than most locations on the island, and - while it is not immune to market fluctuations - recovers faster to down cycles - I wondered why this particular home had not brought the owners as large a return as some other neighborhoods on Oahu.

The article shows charts of the Hottest and Coldest Neighborhoods on Oahu during this, our Buying Paradise of 2009, for single family homes and condos. For homes, Wahiawa is the hottest, and the other 4 are (in order) Mililani, Ewa Plain, Aina Haina-Kuliouou, and Kapahulu-Diamond Head. Not Hawaii Kai.

The coolest areas are (in order): Waialae-Kahala, Pearl City-Aiea, Moanalua-Kalihi, Windward Coast, and North Shore. Not Hawaii Kai.

For Condos, hottest and coolest neighborhoods - Hawaii Kai was not included in either.

Why? In my opinion, because our market is more stable. You might not get huge appreciation (depending of course on purchase price - some folks did the last few years) but you also won't suffer huge losses (which many homeowners in other parts of the island certainly have had the last couple of years).

Bottom line: Hawaii Kai is a pretty great place to own real estate, and over the long haul, will be a great investment in one, if not the, premier location to live on Oahu.

Here's a link to the full article in Honolulu Magazine. For specific Hawaii Kai Market News, visit my web site, where you also can receive free reports on any neighborhood or condo complex in Hawaii Kai.

It's certainly a buyer's market now - don't lose your $8,000 tax credit or this opportunity to buy in what Harvey Shapiro (research economist for the Honolulu Board of Realtors) calls the best time to buy in a decade. Call or email me to discuss ideas.

Barbara Abe, Realtor

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