Karen Morineaux recently sent a nice mahalo card in thanking David for his help in the sale of her Mililani condo.
Karen Morineaux, Kealia, HI
I know how late this is coming in but time just seems to slip away. I wanted to say thank you for all you did in making Mililani sell. I know it was small potatoes, but I wanted you to know it was appreciated.
Homes in Niu and Aina Haina Valleys
We saw the largest increase in the number of sales between Aina Haina to Kuliouou in East Honolulu. That was a contrast compared to last month where we saw a big increase out on the west side in Makaha and Nanakuli. That increase was up 86% in the number of sales compared to last year.
Makiki Homes under a rainbow
For the median sales price, we also saw the largest increase here in town. Makiki-Moiliili was up 21% finishing up at $1,372,500!
In October we had 10 condominium local markets where the sales increased. We had 7 markets where the number of sales decreased and there were 3 markets with no change in the number of sales.
Bluestone Condos in Windward Oahu
The windward markets were very strong with the number of sales in Kailua-Waimanalo more than doubled in October of this year compared to last year from 6 sales last year to 13 sales this year. The number of sales in Kaneohe also doubled from 8 sales last year to 16 sales this year.
Condos off Kapahulu Ave near Diamond Head
The median sales price was lower in four of our neighborhoods compared to last year. The largest decrease was in Diamond Head-Kapahulu where there was a 40% drop in the median sales price. That just demonstrates the market's volatility because last month Kapahulu had the largest increase in median sales prices.
Ala Moana and Kakaako Condos
In thirteen of our neighborhoods the median sales price increased compared to October last year. The largest price increase was in Ala Moana-Kakaako where the median sales price was up 94% compared to last year.
Every home is different. Every neighborhood is different. If you'd like to find out what this means for you, contact us at Harcourts Island Real Estate - 808-777-4880.
It’s been six months since Mayor Caldwell signed Bill 7 to encourage private sector-funded, higher-density redevelopment of Apartment and Mixed-use properties of 20,000 square feet or smaller. Bill 7 provides incentives for private developers to increase the number of rental units that can be built and reduce some development costs and taxes in exchange for a commitment to rent at least 80% of the apartments to tenants who earn no more than 100% of the Area Median Income (AMI) at rents that are set by the department of Housing and Urban Development as Area Median Rents.
In the six months since the Bill was enacted, only two applications for building permits have been submitted to the Department of Planning and Permitting. Both were filed in October and are currently being processed. Given the opportunity Bill 7 provides, why have there been just two applications so far?
Are the rent caps to blame? Some bankers and developers believe that the HUD rent caps are part of the reason that there haven’t been more Bill 7 development applications submitted to DPP. People who own qualifying properties may be wary of rent caps because they believe the market should determine what the apartment rents will be. Some property owners may be deterred by complicated reporting requirements.
Bill 60 proposes amendments to Bill 7 that will eliminate the requirement for rents to conform with 100% of Area Median Rents and will allow owners to charge market rents. Some advocates for low income housing worry that this will reduce the number of “affordable” rental units developed under Bill 7 and developers will take advantage of the Bill 7 incentives to build rental apartments that are too expensive for working families to afford.
Bill 60 was given initial approval by the City Council Zoning, Planning and Housing Committee on November 14 and will go to the full City Council for the second reading. What do you think about this proposal?
David E. Buck and Dianne Willoughby discuss the real estate market update for October on Oahu.
This Ocean Pointe home in Ewa Beach (MLS # 201919444) is asking $780,000
We finished the month off with a median sales price of $780,000, which was a 2.5% decrease from October of last year. Meanwhile homes were selling 20% faster with just 23 days on market, compared to 29 days last year. We also saw a surge in the number of pending sales which were up 15%. That's showing some strength in the market and we look forward to a strong November.
Single Family Home and Condos Stats Year over Year and Year to Date
This Waikiki condo (MLS # 201930386) is listed at $440k - just under October's Median
The median sales price for October of 2019 was $441,000. It's an increase of 13% compared to October of last year. The number of pending sales at the end of October was 642. That was an increase of 9% compared to October of 2018. This may give us an indication that November may be a very strong month with a lot of closings. Our months of remaining inventory went from 3 months to 3.8 months of inventory. That's an increase of 26%, which may be a slight indication that the market may be slowing.
Each market is different and each home is unique. If you'd like to find out what this means for you, contact us for more information.
What can be built on a 5,000 square foot lot that qualifies for Bill 7 incentives? Every property is unique, so we encourage you to contact us for a quick analysis of your property; but here is a sample of what might be possible.
If we start with a 5,000 square foot lot measuring 50’ by 100’ and a 60-foot height limit, the street front setback is 10 feet and side setbacks are 5 feet. The ground floor can be used for parking spaces, rental apartments or commercial space if the underlying zoning allows commercial use. (Note that tax incentives and fee waivers apply ONLY to the portion of the project that is to be rented to tenants who earn 80% to 100% pf Area Median Income for qualifying rents.)
With an allowable Floor Area Ratio (FAR) of 4.0, a 5,000 square foot lot might support a 20,000 square foot building with up to 25 apartments. The maximum number of apartments that can be built is calculated by dividing the maximum allowable FAR by a factor of 800 and rounding down to the next whole number.
This past week a special Vladimir Ossipoff designed home on the historic register hit the market in Puupanini.
Ossipoff home (MLS # 201930963) in Puupanini
Built in 1954, this special home was designed for Marshall Goodsill a prominent local attorney and partner of Goodsill Anderson Quinn and Stifel*. It has been featured in "Hawaiian Modern" a book by Dean Sakamoto that featured the works of Ossipoff. What's remarkable about this home is the character of the era is still well kept. By being an official historic home on the historic registry, the annual tax bill is only $300/year.
Historic Registry Designation
This home feature's Ossipoff's signature indoor/outdoor living with walls that open up for natural ventilation.
It also featured the white washed wood that was seen in a lot of mid century Ossipoff homes of the era.
Outside of the famous Liljestrand house, this covered lanai was one of the main features I remember from the Ossipoff Exhibit I attended and wrote about back in 2008.
To learn more about this or other mid century modern homes on Oahu, feel free to contact me for more information.
*The Stifel residence was also in Puupanini, designed by Ossipoff and sold in 2017 ago for $8,250,000
Here are some of the features and incentives provided by Bill 7
In addition to design allowances, there are financial incentives available to qualifying projects.
Park dedication requirements are waived, and wastewater system facility charges are waived (the capacity must be available). Plan review and building permit fees may be waived . The property may qualify for exemption from real property taxes during construction and marketing lease-up period for apartments that are to be rented to tenants who earn no more than 100% of the area median income at rents that are no more than area median rents. Exemption from real property tax can extend to 10 years for apartments that are rented to tenants who earn no more than 80% of the area median income at rents that are no more than 80% of area median rents.
Up to 20% of the apartments can be occupied by the owner or members of the owner’s family. The remaining units must be rented for no more than 100%of the area median rent to tenants who earn no more than 100% of area median income.
2019 HUD AMI (Area Median Income) for households in Honolulu
1 person $84.000
2 people $96,400
3 people $108,500
4 people $120,500
2019 HUD maximum rents in Honolulu for 100% AMI households
Studio $2,260
One bedroom $2,411
Two bedroom $2,848
Three bedroom $3,243
Four bedroom $3,646
Not including utilities
Aloha! This is old Captain America here. I just got back from time traveling and I heard my buddy Wolverine studied some properties here in Hawaii a few years back and I figured I'd go back in time to look at some cool looking properties.
The "Old" Captain America presenting some great properties on Oahu
2 Acres on the North Shore (MLS # 201913619) for $2 million
This oceanfront two acres of land on the North Shore of Oahu is undeveloped and can be purchased for only $2 million.
Palolo home (MLS # 201929505)
This is in a valley right up the road from us here on Kapahulu in Palolo. It's a 6 bed, 2 bath home built in 1945 (remodeled in 2017) is listed for $1,150,000.
Punchbowl Studio (MLS # 201923006)
This condo was built in the 1960's in Punchbowl near where my buddies were buried. This is a great location near downtown Honolulu built in 1963 and remodeled in 2014.
Punchbowl 2 Bed Condo (MLS # 201915065)
Next, we jump later into the 1960's around the crater in Punchbowl to Sky Tower. It's a 2 bed, 2 bath unit on the ground floor listed at $478,000 (remodeled in 2016).
Kapiolani Manor 1 Bed Condo (MLS # 201926812)
Then we come to Kapiolani Manor right near Ala Moana shopping center. This is a 1 bed, 1 bath for $330,000 and overlooks the Hawaii Converntion Center and you've got views of Waikiki and the ocean in the background.
Makaha Valley Towers 1 Bed Condo (MLS # 202004164)
In the same year of 1970, Chin Ho developed Makaha Valley Towers and this is a beautiful unit that was remodeled in 2016 and is available for $220,000.
Kailua Home (MLS #201927474)
Also in the 1970's, this looks like the year the Harcourts Broker may have been born. This is a beautiful home built in 1974 and completely remodeled in 2012 and is listed for $3,300,000.
Waikiki Sunset Condo (MLS # 201921379)
The Waikiki Sunset is a great building right down the road from the Harcourts office on Kapahulu. This is a 2 bed, 1 bath for $440,000 Leasehold.
Diamond Head Home (MLS # 201925976)
In 1988, this beauty was built 31 years ago. It was remodeled in 2008 with a high end kitchen and on the slopes of Diamond Head currently priced at $5,380,000.
Kaneohe Home (MLS # 201927477)
In 1992, I'm not sure if you remember that year, however it was a fun year! We've got a 3 bed, 2.5 bath home with gorgeous views of Kaneohe Bay. This one is listed for $1,450,000
Symphony Penthouse (MLS # 201911230)
Last, but not least we have the newest of all the inventory I've been scouting out. This is a relatively new building built in 2016 at the Symphony and this is where we're doing our Harcourts Auctions with a starting bid price of $1,200,000.
To learn more about all these cool properties, give "The Cap" a call :) Aloha!
What size properties qualify for Bill 7 redevelopment?
Lots with area up to 20,000 square feet qualify for Bill 7. The minimum front yard must be 10 feet, or the minimum required by the underlying zoning, whichever is less. The minimum side and rear yards must be 5 feet, or whatever is required by the underlying zoning, whichever is less. For development purposes, lots between 5,000 and 20,000 square feet are the most desirable.
What is the maximum building “footprint” allowed by Bill 7?
Bill 7 allows a building to cover up to 80% of the land. This compares with a 40% to 60% footprint allowed in Apartment zoning.
What is the maximum building height?
Bill 7 allows buildings up to 60 feet high.
What is the allowable density?
The Floor Area Ratio (FAR) allowed under Bill 7 is 4.0. This means that the building can be four times the size of the land. Under Apartment zoning, without Bill 7, the FAR ranges between 0.9 and 2.8. Bill 7 allows a larger building to be built on qualifying parcels of land.
How many apartments can I build on my property?
The maximum number of units is determined by dividing the Allowable Floor Area by 800. Under this formula a 5,000 square foot parcel would have Allowable Floor Area of 20,000 square feet. Divide 20,000 by 800 and the maximum number of units allowed on a 5,000 square foot property is 25.
On a 10,000 square foot property, 50 apartments would be possible. A 15,000 square foot property would support up to 75 apartments and about 100 apartments could be built on a 20,000 square foot property.
What type and size of apartments can be built?
Everything from studios to four bedroom apartments can be built under Bill 7. Apartment sizes allowed by Bill 7 are generous. Studios can be up to 500 square feet; One bedroom apartments with one bath can be up to 650 square feet; Two bedroom apartments with one bath can be up to 800 square feet; Two bedroom apartments with two baths can be up to 1,000 square feet; Three bedrooms with a bath and a half can be up to 1,100 square feet; Four bedrooms with two baths can be up to 1,300 square feet. The intent of Bill 7 is to encourage development of livable rental housing that is attractive to a range of families.
What is the maximum rent allowed for Bill 7 apartments?
Rents are based on federal guidelines from Housing and Urban Development (HUD) that measure the Annual Median Income (AMI) in cities across the United States. For Honolulu, the 2019 AMI rents are $2,260 for studios; $2,411 for one bedrooms; $2,848 for two bedrooms; $3,243 for a three bedroom and $3,646 for four bedrooms.
David and Dianne share the September Oahu and Harcourts Auctions Stats
The median sales price for a single family home on Oahu was $777,000, which was a 4% drop from the previous year of $812,500. It's taking homes 29 days to sell, which is 70% increase over September, 2019.
On the condo front, we hit a median sales price of $445,000. That was a 4% increase over the previous year of $425,000. Condos are also taking longer to sell with 27 days on market vs. only 20 days last year. Overall, it's becoming a little more of a Buyer's Market.
September Market Snapshot
We had $42 million in escrow at the end of 2 auctions in September. One property had 5 bidders. We also had a new listing with a start to bid price of $4.9 million in San Juan Capistrano.
Local Neighborhood Update by David & Dianne
The largest increase in the number of sales took place in the Ewa Plain with a 51% jump. What's been happening is people have been priced out of metro/east Oahu and finding better bargains out west. We followed a similar trend where the largest increase in price was in the Makaha-Nanakuli neighborhood. There was saw a jump from $448,000 to $550,000. Buyers are finding a greater value out west and can still enter the market for several hundred thousand dollars less than the median sales price on the island.
The largest increase in the number closed transactions was Downtown-Nuuanu. There was a 72% increase in the number of sales there since last year. In terms of median sales price, 7 neighborhoods experienced a decrease, 10 neighborhoods experienced an increase and 3 of our neighborhoods the prices were relatively flat. It's a stable market which may be slightly softening when compared to the market we've been experiencing the last few years. In terms of median sales price, the largest increase was in our own neighborhood of Kapahulu-Diamond Head. Our median price was up by 145% from $450,000 to $1,100,000!
Mahalo for listening and reading. Just so you know, this is an overall broad view of Oahu. Every neighborhood is different, so if you'd like to know a little more about your specific neighborhood, feel free to contact us directly at 808-777-4880.