Working with a Professional Realtor more Important Now than Ever Before

A recent study conducted by a multiple listing service in New Jersey reported 95% of consumers felt working with a real estate professional is just as important, if not more so, than it was even a few years ago.  The survey, Keepin' It Real, can be found on the MRIS web site.

Most consumers understand that now is not the time to complete a real estate transaction on their own.  The market is too unsettled and prices too variable neighborhood to neighborood.  In order, they ranked the following qualities as critical in choosing an agent:

• Trustworthiness
• Experience
• Willingness to look out for a client’s interest
• Expertise in negotiating contracts
• Responsiveness
• Familiarity with contracts
• Knowledge of the local community

Additionally, 68% of buyers and sellers rated their agents 6 or 7 on a 7-point scale. 48% found their agents by a referral. 80% said they would in turn recommend their agents.

Consumers today want more than simple guidance.  They can search homes for sale and community information extensively online, but want an expert they trust to take them through the entire process of buying or selling real estate.  Yet, despite all of the tools and resources available, when it comes time to actually buy or sell a home, there is nothing more valuable than the industry knowledge, expertise, and guidance a real estate professional offers.

I've been living and working in Hawaii Kai for more than 20 years, and can give you the insider view of all our communities.  Call or email to ask me your questions about Hawaii Kai real estate.

Barbara Abe, Realtor
barbara@barbarashawaii.com
808-226-2537
http://www.movetohawaiikai.com/
http://www.barbarashawaii.com/
www.activerain.com/blogs/abeb

Homeownership Still a Large Part of the American Dream

A recent survey conducted by Trulia.com, on American attitudes towards homeownership, showed conclusively that we still feel homeownership is part of the American Dream.  “Contrary to popular belief, the American Dream of homeownership has not turned into an American nightmare," said Pete Flint, CEO of Trulia.

Conducted by Harris Interactive, the survey of 2,079 adults 18 and over, found 70% view homeownership as part of their own American Dream, and 78% feel their homes are the best investment they ever made.

Although many of today’s young adults came of age during the recent housing crash, 26% say their views on owning a home have become more positive over the past six months. 88% of 18-34 year old renters aspire to be homeowners, making this new generation of buyers crucial role in the stabilization of today’s real estate market.  While these buyers are in no hurry to purchase. 70% of renters in the Western region plan to buy a home eventually.

“During the housing bubble, the American Dream of homeownership was beyond reach for many young adults. Stuck with student loans and entry-level jobs, many had resigned themselves to being lifelong renters. But the tide is changing—Millennials are now today’s most serious home buyers,” said Tara-Nicholle Nelson, Consumer Educator for Trulia. “Unjaded and largely untouched by the effects of the housing crash, this new generation of buyers will no doubt lead America from its current housing slump towards true recovery.”

In our Hawaii Kai real estate market, there are million dollar estates and affordable condos.  Call or email me and let's talk about options for making your American Dream of Homeownership come true.

Barbara Abe, Realtor
barbara@barbarashawaii.com
808-226-2537
http://www.movetohawaiikai.com/
http://www.barbarashawaii.com/
www.activerain.com/blogs/abeb

Update on Hale Ka Lae, New Condo Development, Hawaii Kai

Last week I stopped by the Broker's Open given for Hale Ka Lae, the upscale new condo development that has been so many years in the making, at 7000 Hawaii Kai Drive.  Here is the latest news.

In Phase 1, there will be 242 "beautifully crafted condos designed for the modern lifestyle and energetic spirit."  Floor plans are "generous" - 992 - 1233 SF for a 1 bedroom/1.5 bath home ranging to 2,886 SF for a 3 bedroom/3.5 bath penthouse unit.

If what they promise does come true, Hale Ka Lae will be quite lovely.  Kitchens feature top-of-the-line Miele German appliances, and the entire home will be "upgraded" so there will be no additional upgrades to purchase.  The kitchens and baths are gorgeous (samples in the showroom).

Prices start at $685,265 for a one bedroom and go up to $3,393,568 for the 3/3.5 penthouse.

Feb. 19 is the launch date for their web site and going public.  Please let me know if you have an interest, so I can sign you up on their list.  Remember, to have a personal agent in new construction, that agent (hopefully me) needs to be involved from the very first interest you show.  Watch here for follow up posts on the construction and progress of Hale Ka Lae.

Barbara Abe, Realtor

barbara@barbarashawaii.com

808-226-2537

http://www.movetohawaiikai.com/

http://www.barbarashawaii.com/

www.activerain.com/blogs/abeb

Demographic and Economic Forces in the Hawaii Real Estate Market

Even in the paradise we call Hawaii, a recession, which is creating consumer behavioral changes, is colliding with shifts in the demographic distributions of the population.  These forces will affect the real estate market both at home and in the rest of the country, and indeed, worldwide, in unforeseen and extraordinary ways.  Americans who have dealt with the spectre or reality of job loss, home loss, and declining real estate values are justifiably skeptical about the benefits of homeownership.  The financial impacts of the housing crisis will take years to disappear from the country's real estate markets.  In addition, Americans have to consider options unrealized in the last generation.

As reported by RISMedia.com, in an article by Rent.com, "The Joint Center for Housing Studies of Harvard University reports that real median household incomes across all age groups under 55 have not increased since 2000. It’s been posited that this will be the first decade in 40 years where real median household incomes will end lower than where they started. This has the biggest implications for the baby bust generation (born 1966-1985) as they approach what should be their prime earning years, and for younger baby boomers who will be facing a vacuum of demand from younger generations when they want to retire, sell the family home and downsize. Over-building and spiking foreclosures have already produced an over-supply of large suburban homes for which there is little demand or ability to purchase. Gen X and Y will not do much to help solve this problem.

"Aging boomers will be reluctant to sell their homes for two reasons. One, they may be underwater on their mortgages and waiting for the market to rebound and two, they are healthier than their parents’ generation and will likely delay the move to retirement community living. Only time will tell if a market will exist for their homes when they are ready to sell. However, the income constraints and lifestyle demands of a shifting population may dictate a very different future.

"The Gen Y population, or echo boomers (born 1986-2005), the largest pool of renters, is now in their prime rental years, but many have found themselves jobless with no way to pay the rent. Forced to move in with mom, dad or friends, this twenty-something crowd has been hard hit by the recession. Nonetheless, they are poised to redefine the American dream for generations to come. When employment growth returns, they will be a key driver of rental demand.

"All in all, there are some big changes afoot in the housing market that shifting demographics will continue to amplify. The changing needs of an aging baby boomer population as well as the demands of the burgeoning Echo Boomer generation will require that the real estate market respond in new and different ways."

Forecast demographic shifts will bring dramatic changes to the housing market.  Both retiring baby boomers and maturing echo boomers are expected to move away from suburbs into more urban, mixed use, mixed age areas with a sense of community, easy access to services and transportation.

However, achieving this dream for the younger segments may be financially out of reach.  The over-built suburbs have been the hardest hit by home devaluation, and so represent the greatest values for would-be homeowners.  Urban living may be financially out of reach.  For Generation Y'ers who prefer an urban lifestyle, it is not clear yet how this economic conundrum will be resolved.

The RISMedia article concludes, "What is clear is that the growth of an economically challenged echo boomer generation will make affordable housing even more important.."

Our housing market in Hawaii is unique in the country, because of the supply/demand equation of increasing housing with the limited resource of buildable land.  Our climate and lifestyle encourage immigration, but our isolation brings greater living and building costs.

I certainly don't pretend to see into the future.  The next decade or two will bring together forces of change which will affect much more than the real estate market.  I do feel, however, that being aware and up-to-date on Hawaii housing values and neighborhood changes will make you a wiser investor or seller, when you do decide to enter the real estate market.  Call or email me if you'd like to talk about your own community and sales trends in the Islands.

Barbara Abe, Realtor
barbara@barbarashawaii.com
808-226-2537
http://www.movetohawaiikai.com/
http://www.barbarashawaii.com/
www.activerain.com/blogs/abeb

Trends in Housing for the 55+ Generation

A joint study by the 50+ Housing Council of the National Association of Home Builders (NAHB) and the MetLife Mature Market Institute shows the recession has made 55+ buyers more practical when selecting a new home. Design considerations have become less important, and financial concerns have become more prominent.  “By the year 2020, as Baby Boomers move into this age bracket, almost 45% of all U.S. households will include someone at least 55 years old,” said David Crowe, NAHB’s chief economist. “The number of those households seeking housing better suited to their changing needs will therefore rise dramatically.”

The study, “Housing Trends Update for the 55+ Market,” explores recently released housing data from the Census Bureau’s 2009 American Housing Survey (AHS) on the 55+ demographic. The report focuses especially on households living in active adult communities.

Previous studies from these two organizations found that most 55+ buyers depended on home sale proceeds to finance a new purchase. The most recent data shows that option diminished during the economic downturn.  In 2009, only 55% of new age-qualified active adult home buyers reported that their down payment came from a previous home sale, significantly down from 100% of respondents in 2005 and 92% in 2007. In 2005 and 2007, no active adult community buyers reported having to tap cash or savings for a down payment. In 2009, 45% of the average buyer’s down payment came from cash or savings.

The desire to be near family and friends is the mature mover’s overwhelming motivation, the report noted. The design, amenities and appearance of the residence and the community remain important, but less so than before the recession. Buyers who fall into the 55+ age range that are moving into rental homes, both multi-family and single-family, cited a desire for less expensive housing as second in importance to living near friends and family.  Proximity to work also increased in importance, as more Boomers work well into traditional retirement years.

Hawaii Kai has both retirement communities and many homes where you can age in place.  Call or email me to discuss your plans and options.

Barbara Abe, Realtor
808-226-2537
barbara@barbarashawaii.com
http://www.movetohawaiikai.com/
http://www.barbarashawaii.com/
www.activerain.com/blogs/abeb

Home Buying in Hawaii Kai in 2011 - New Regulations that will Affect You

Thanks to a combination of rising mortgage rates, tighter underwriting guidelines, and sweeping government regulation, home buying is unlikely to get any easier and may, in fact, get much more difficult in 2011.  Looming over the mortgage market are provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that have yet to be finalized. Among them is a requirement that mortgage lenders maintain some “equity" in the mortgages they originate, by holding at least 5% of the credit risk, rather than bundling the loans and selling them off entirely.

The goal is to discourage a repeat of risky past practices, but the legislation makes an exception to the risk-retention standard for what is labeled a “qualified residential mortgage.” (QRM) It is the still-unspecified definition of this type of loan that has lenders scrambling.  “People have some very different ideas of how to define this,” said Michael Fratantoni, vice president of research and economics at the Mortgage Bankers Association. “Some would say if it doesn’t have a 30% down payment, it’s not a QRM. For a first-time home buyer, that would really be eye-opening. It definitely has the potential to turn the market upside down. This could dramatically tighten underwriting much more than what the lenders have already done. It’s going to make it even tougher to work through the housing overhang.”

“If you have to have 30% down, the American dream would become the American fantasy,” said one lender in Illinois.  Additional regulation on mortgage bankers will mean a thinning of their ranks, weeding out the unscrupulous players. But it also will lessen consumers’ ability to comparison-shop widely for the best home mortgage product.

Another wrinkle to the mortgage market is that beginning in March, Freddie Mac will raise fees for mortgages sold to Freddie that carry higher loan-to-value ratios. The additional fees will vary depending on the borrower’s credit score and the loan-to-value ratio, but in some cases the upfront fees will increase by as much as 0.75% of a loan’s balance. If a lender passes along a 0.25% fee to the borrower, it could add about $10 to the monthly payment on a $200,000 mortgage, according to Freddie Mac.  In late December, Fannie Mae announced its own series of considerable loan-level price adjustments, effective April 1, for mortgages with greater than a 60% loan-to-value that will apply even to consumers with credit scores above 700.

Rates also are rising.  The forecast for 2011 for a 30-year, fixed-rate mortgage is slightly under 6%. That could definitely change the affordability ratios of buyers who were approved when the rates were 4.25% this past year.

If you want to buy in Hawaii Kai this coming year - and see the market numbers for why you shouldn't wait - then find a reputable lender and get pre-approved, not just pre-qualified.  Know your buying power and then start looking.  I can recommend experienced Hawaii lenders and email you information on any Hawaii Kai condo or neighborhood.  Let's get started!

Barbara Abe, Realtor
808-226-2537
barbara@barbarashawaii.com
http://www.barbarashawaii.com/
http://www.movetohawaiikai.com/
http://www.barbaraabe.gmragent.com/
www.activerain.com/blogs/abeb