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Old 21 July 2016, 09:53 PM   #1
Gaijin
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Real estate market in the USA.

Real estate market in the US. Any thoughts?


I'm thinking of buying a place in Kona on the big island in Hawaii. A place to retire to in say 5 years. I'd rent it out until that time.

My question is "Am I gonna be that guy?" The one that buys at the peak of a real estate bubble? Are we even in a bubble ?


I'd really appreciate your thoughts. Those of you that know way more about this than me. That opens it up to everyone on the forum.
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Old 21 July 2016, 10:22 PM   #2
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There will never be a peak in Hawaii unless Asia has a economic collapse
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Old 21 July 2016, 10:32 PM   #3
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Play it long. If you buy RE worried about a 5 year window then don't. Hawaii is and always has been a solid market, unlikely to see any real downturn other than occasional dip, and when that occurs it's just that, a dip. I'd buy.
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Old 21 July 2016, 10:41 PM   #4
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I can't speak to the US market specifically, but here in Toronto and Vancouver we have seen remarkable price increases over the past 10 years.

One things for sure, everything that goes up comes back down, so I wouldn't be surprised to see a correction some time in the future. However, with low interest rates worldwide, people turn to other asset classes for investing, so that correction may not be as severe as we think ...

i would say that if you are buying for retirement and your time horizon is many many years, it's a good idea. If your time horizon is shorter, I think there will be some bumps along the road.

Personally I tend not to factor in real estate to my retirement plans. I view it more as a lifestyle choice.
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Old 21 July 2016, 10:51 PM   #5
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Hawaii RE is always strong.
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Old 21 July 2016, 10:56 PM   #6
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Can't speak of Hawaiian property, but my wife and I just bought our "forever" home and sold our starter home. We both got and paid a high $ per square foot. Probably a bubble and won't get the same return we got on our first home purchased four years ago, but it was an opportunity in a neighborhood that has very low turnover and we couldn't pass it up. Paid over asking with a quick closing
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Old 21 July 2016, 10:58 PM   #7
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I can't speak to the US market specifically, but here in Toronto and Vancouver we have seen remarkable price increases over the past 10 years.

One things for sure, everything that goes up comes back down, so I wouldn't be surprised to see a correction some time in the future. However, with low interest rates worldwide, people turn to other asset classes for investing, so that correction may not be as severe as we think ...
I am not from Canada but I read an article stating that many Chinese billionaires are buying property in Vancouver for their children abroad and as investments. This represents a big uptick in the market. The market correction will likely be small.

For US RE Hawaii is always solid for rentals and would be a great retirement destination. I would say Miami beach as well if you can get house with a dock.
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Old 21 July 2016, 11:06 PM   #8
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I am a builder. I build new homes and remodel existing ones. Around me guys are sticking homes on any vacant lot and selling them fast. I have two lots I hope to get and I will put a house on each one and sell them. The market is just starting heat up. If you don't get in now you might have to ride the up hill trend for a year until it settles or declines before you buy.

Since you are talking Hawaii what happens in the rest of the country doesn't matter. I find Hawaii and some of the more wealthier areas operate outside of traditional real estate forecasts. They will always be pricey. I would defer to a good local agent and start studying the pricing trends.
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Old 21 July 2016, 11:13 PM   #9
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Real estate market in the US. Any thoughts?


I'm thinking of buying a place in Kona on the big island in Hawaii. A place to retire to in say 5 years. I'd rent it out until that time.

My question is "Am I gonna be that guy?" The one that buys at the peak of a real estate bubble? Are we even in a bubble ?


I'd really appreciate your thoughts. Those of you that know way more about this than me. That opens it up to everyone on the forum.
in short, no.

http://www.hicentral.com/oahu-historical-data.php
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Old 21 July 2016, 11:16 PM   #10
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My gut instinct for a safe investment in hawaii is

- condo rather than house
- small sized unit (<900 SF)
- walking distance to water
- preferably a water view
- accessible to restaurants, super markets and other amenities
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Old 21 July 2016, 11:18 PM   #11
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The area between Alii Dr and 11 seem very strong.

But I wouldn't like to actually live there. As a tourist myself, I was annoyed by all the other tourists.
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Old 21 July 2016, 11:21 PM   #12
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If you don't find a place right away, my friend, Robin Masters, has a guest house you can use.
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Old 21 July 2016, 11:26 PM   #13
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Of course Oahu is very strong. So is Maui.

Not sure about the growth on Big Island.
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Old 22 July 2016, 12:01 AM   #14
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The old saying applies here, Location, Location, Location. Some areas around me are still somewhat low, but others are booming. Atlanta and Charlotte have really bounced back strong. Smaller towns and cities, not so much. If the plan is to retire there, I wouldn't really worry about it. Just do your homework on property taxes, etc.

Also, if you buy something near the area that hosts the Ironman World Championships, I'll rent your place for those two weeks in 2017. I received an email securing my spot, so I'm all in!!!
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Old 22 July 2016, 12:15 AM   #15
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This may sound daft but what is insurance like living on an active volcano in the middle of the ocean?
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Old 22 July 2016, 12:23 AM   #16
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If you don't find a place right away, my friend, Robin Masters, has a guest house you can use.
No sir, was taken over last week by three men and a baby.
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Old 22 July 2016, 01:08 AM   #17
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My gut instinct for a safe investment in hawaii is

- condo rather than house
- small sized unit (<900 SF)
- walking distance to water
- preferably a water view
- accessible to restaurants, super markets and other amenities
This is exactly what I am looking at! 2 BR 2 bath condo walking distance to beach 5 minutes to shopping/restaurants, downtown Kona, ocean view from lanai.

I love the wealth of knowledge we have here on TRF. Such a diverse group. I am carefully reading every response and am grateful.
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Old 22 July 2016, 01:09 AM   #18
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If you don't find a place right away, my friend, Robin Masters, has a guest house you can use.
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Old 22 July 2016, 01:11 AM   #19
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The old saying applies here, Location, Location, Location. Some areas around me are still somewhat low, but others are booming. Atlanta and Charlotte have really bounced back strong. Smaller towns and cities, not so much. If the plan is to retire there, I wouldn't really worry about it. Just do your homework on property taxes, etc.

Also, if you buy something near the area that hosts the Ironman World Championships, I'll rent your place for those two weeks in 2017. I received an email securing my spot, so I'm all in!!!
I won't be living there in 2017 but when i do you are welcome to the extra bedroom.
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Old 22 July 2016, 02:01 AM   #20
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I won't be living there in 2017 but when i do you are welcome to the extra bedroom.
I am having my stuff shipped over Gajin... Tired of living in Jockes extra room
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Old 22 July 2016, 02:02 AM   #21
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I am having my stuff shipped over Gajin... Tired of living in Jockes extra room
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Old 22 July 2016, 02:19 AM   #22
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Big price gains here in the Bay Area. Wife and I bought our current home in March 2012 and seeing about a 60-70% increase from that time. If it's not a bubble, I don't know what is!

In terms of buying for an investment, the better the location, the lower the probability for depreciation, generally speaking.


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Old 22 July 2016, 04:47 AM   #23
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This may sound daft but what is insurance like living on an active volcano in the middle of the ocean?
I can't imagine it's cheap!
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Old 22 July 2016, 05:59 AM   #24
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I have been closely following the Maui market for the last 6-7 years with the idea to buy a future retirement home as well. Units that were listed at $400k - $675k in our target developments are now (as of last month) between $750k and $1.3m.

Yhe previous posters are correct. Chinese are parking their cash in real estate in Hawaii as well as Vancouver and driving the peice up to unsustainable levels. Wait till the next asian mark t crash. Thats what I am doing.

Also, make sure your condo has a fee simple title instead of a land lease. And check into rental restrictions. Some developments have tight controls on short term rentals.

Have fun.
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Old 22 July 2016, 07:28 AM   #25
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Every market is different, ive been selling real estate in the Los Angeles area for many years.

Contact a professional in Kona and figure out what that market is doing.
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Old 22 July 2016, 07:58 AM   #26
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Every market is different, ive been selling real estate in the Los Angeles area for many years. .
It is different

Here in the Valley most homes where bought by Canadians

Now with their good Dollar rate . . . most are selling !

And anyway if you contact a Realtor - what I always hear is :

Buy now prices are increasing

There's not much on the market

The Canadians are arriving - we'll they where arriving

The only lesson I learned in life is - never rush - that only costs money !

Or it has to be a really unbelievable deal but than there's always 'the catch' . . . or at least 9 times out of 10
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Old 22 July 2016, 08:12 AM   #27
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Big price gains here in the Bay Area. Wife and I bought our current home in March 2012 and seeing about a 60-70% increase from that time. If it's not a bubble, I don't know what is!

In terms of buying for an investment, the better the location, the lower the probability for depreciation, generally speaking.


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Now I not the most clever guy but . . .

So this means that in a few years the price of your house is doubled in value

What is really nice !

Now lets assume you sell it - and that will leave you with a really nice profit

But all prices have skyrocketed

So unless you have a few more properties . . . . you actually made no profit unless you go living is a less expensive / cheaper / smaller house or move to another area

That's what happened in Ireland years ago

All home owners became millionaires . . . but no one can buy a house at the current market value so . . . the paper millionaires

http://news.bbc.co.uk/2/hi/uk_news/n...nd/6357637.stm

The only option that rests is increase the years - again - for the mortgage - from 30 to 50 or 60 - and than the home will be paid off in the third generation !

Meaning that buying today . . . . the ownership will be for you grandkids !
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Old 22 July 2016, 08:46 AM   #28
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Originally Posted by sea-dweller View Post
Big price gains here in the Bay Area. Wife and I bought our current home in March 2012 and seeing about a 60-70% increase from that time. If it's not a bubble, I don't know what is!

In terms of buying for an investment, the better the location, the lower the probability for depreciation, generally speaking.


Sent from my iPhone using Tapatalk
Same here got my place in 2012 and value went up 70 percent so I sold the place and looking to rent in the east bay for a year. As for Gajin Hawaii property values and rents are steady strong
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Old 22 July 2016, 02:39 PM   #29
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You're correct, my house has almost doubled in value, if I sell it and take the gains. The situation is that I have to stay in this area, so cannot sell it!



Quote:
Originally Posted by Kingair View Post
Now I not the most clever guy but . . .

So this means that in a few years the price of your house is doubled in value

What is really nice !

Now lets assume you sell it - and that will leave you with a really nice profit

But all prices have skyrocketed

So unless you have a few more properties . . . . you actually made no profit unless you go living is a less expensive / cheaper / smaller house or move to another area

That's what happened in Ireland years ago

All home owners became millionaires . . . but no one can buy a house at the current market value so . . . the paper millionaires

http://news.bbc.co.uk/2/hi/uk_news/n...nd/6357637.stm

The only option that rests is increase the years - again - for the mortgage - from 30 to 50 or 60 - and than the home will be paid off in the third generation !

Meaning that buying today . . . . the ownership will be for you grandkids !
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Old 22 July 2016, 02:40 PM   #30
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Happy for you that you took the gains!

We don't want to rent, so cannot move unless we go out of the area.


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Same here got my place in 2012 and value went up 70 percent so I sold the place and looking to rent in the east bay for a year. As for Gajin Hawaii property values and rents are steady strong
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