David E. Buck and Dianne Willoughby discuss the real estate market update for October on Oahu.
Single Family Home Stats
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
Condo Stats
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.
An Example of what Bill 7 Can Mean for a 5,000 Square Foot Property
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.
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
Indoor/Outdoor Living Area
This home feature's Ossipoff's signature indoor/outdoor living with walls that open up for natural ventilation.
White Washed Wooden Walls
It also featured the white washed wood that was seen in a lot of mid century Ossipoff homes of the era.
Here are some of the features and incentives provided by Bill 7
The building is not required to provide parking spaces according to a mandated ratio. This allows the developer to determine the optimum number of parking spaces that will yield the most apartments, given the demand in the market for parking stalls. Buildings near transit stations may offer fewer parking spaces than buildings without easy access to mass transit.
Building permit review will be expedited. The intent is to approve permit applications within 90 days through “check-the-box” permitting rather than discretionary permitting.
Fire safety is integrated into each building using cost saving strategies. Fire sprinklers can use domestic water lines as designed by a licensed mechanical engineer rather than dedicated fire sprinkler lines. Buildings that have fewer than 36 units can have one 45” staircase or two 36” staircases. Elevators are not required.
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
The "Old" Captain America presenting some great properties on Oahu
Untouched: Vacant Land on the North Shore
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.
1945: Palolo Home
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.
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.
1967: Punchbowl 2 Bed Condo
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).
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.
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.
1974: Beachside Kailua Home
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.
1979: Waikiki Sunset Condo
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.
1988: Diamond Head Home
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.
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
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.
Happy Halloween
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
Oahu Single Family Home 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.
Oahu Condo Stats
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
Harcourts Auctions Statistics
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
Local Single Family Home Stats
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.
Local Condo Stats
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!
Summary
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.
My wife and I are travelers and water people. For most of our 47 years together we lived on sailboats on the sea. In our 20’s, we bought a 30 foot sloop in San Francisco although we did not even know how to sail! We taught ourselves celestial navigation (decades before GPS) and everything else needed to become seafarers on the great Pacific.
Living on a shoestring, we voyaged to The Sea of Cortez (Mexico) for several years and became hooked on the cruising lifestyle.
The Southern Cross in New Zealand
After returning to the US, we taught ourselves the real estate business; scrimped and saved for 12 years before buying a 1961 teak Angelman Sea Witch ketch named Southern Cross (Hoku-ke’a in Hawaiian). She needed extensive refitting and we finally sailed for the South Pacific in 1995, again cruising on a shoe string.
Hale O Lono Harbor on Molokai
We lived with islanders all over the Pacific and have hanai family from Polynesia to New Zealand. When it came time to give up the strenuous ordeal of crossing oceans, we sold Southern Cross and moved to Molokai in Hawaii.
Lorraine's Mahimahi caught of Molokai
This gorgeous island, (“The Friendly Isle”) is rural, with a small population, no traffic or stop lights, almost no crime or violence, great fishing, and a perfect climate. Living on land after all those years was a huge change, yet Molokai worked out well for us. It has for many retirees, although we never were ones to “retire.”
Growing our own vegetables
After growing nothing but barnacles in our lives, we planted a large veggie garden and dozens of trees and now eat only (GMO – Grow My Own) from of our garden every day, and sell our overage to vendors at the local Saturday market. Lorraine learned to paddle and steer a va’a (traditional canoe), joined a local club, and paddled in the State Championships.
Lorraine steering a canoe at States
The call of the sea is too strong -- time for us to travel again, this time to the Atlantic. We’re just waiting for the right person to come along and buy our beautiful home and we’ll be on our way.
Our home at 205 Aahi Place (MLS # 201914727)
Thank you and aloha to the nice people on Molokai. Robby and Lorraine Coleman
Today we celebrate Admissions Day in Hawaii as the 50th State in the Union. As we embark on 60 years of statehood, I though it would be fun to reflect back on some of the homes and architecture built in 1959.
Hawaii State Capitol Building
Most of the construction taking place back then could be found in Honolulu, Pearl City and the Windward side (Kailua-Kaneohe). Some of the architecture featured Mid Century Modern homes, while others were still building "plantation style" homes, some still single wall construction. Here's some examples of homes currently on the market:
Oahu Homes Built in 1959
Waimalu home in Pearl City (MLS # 201904429) priced at $625,000
Momilani Home in Pearl City (MLS # 201907321) priced at $665,000
Halekauwila home in Kaneohe (MLS # 201919620) priced at $739,000
Lower Waialae Nui Ridge home near Diamond Head (MLS # 201829952) priced at $799,000
Remodeled Halekauwila home (MLS # 201919170) priced at $865,000
Remodeled home in Pearl City (MLS # 201922722) priced at $887,000
Keolu Hills home in Kailua (MLS # 201918484) asking $918,000
Another Momilani home in Pearl City (MLS # 201921292) asking $925,000
Another home in Waialae Nui Ridge (MLS # 201918705) asking $1,049,000
Hauula home near the ocean (MLS # 201922648) asking $1.1 million
Mokuleia home on the North Shore (MLS # 201921418) priced at $1,329,000
Mid Century Modern Lanikai home (MLS # 201905392) priced at $1,695,000
Kahala home (MLS # 201823962) priced at $1,850,000
Lanikai Mid Century gem on the ocean (MLS # 201910281) priced at $5,395,000
60 Years of Timelessness and Change
Scrolling through these listings built in 1959, you'll see some that are in somewhat original condition to others that have undergone full blown remodels over the years or within the last few years. It's almost like a microcosm of Oahu. There are some things and areas that haven't changed much and others that have changed significantly. Although 1959 was well before my time, it definitely appeared to be a golden age here... If you're looking for a home with a vintage or newer style, feel free to give me a call. Mahalo and enjoy the rest of Admissions Day!
Leslie Goldman stopped by our Harcourts office to share her experience in working with David Buck over the past 18 years and here is what she had to say:
She said David is the most patient Realtor. She gets very overwhelmed with paperwork and David sits down and patiently explains everything to her. He makes her feel safe in what she is buying because if something is not good or not a good deal, he is not going to let her buy it. However, if something is really nice and she loves it, he will sit there and brainstorm with her to see if it's the right place for her. She highly recommended him as a Realtor.
