Movin' on up to bigger, better home

 

Part 1 of 2 series

 

HONOLULU ADVERTISER August 21, 2005

BY LISA SCONTRAS

Custom Publishing Group

 

In the past five years, property values have gone up an average of 88 percent on Oahu. In 12 neighborhoods, appreciation was more than 100 percent and all that equity has been turned into increased buying power for many move-up buyers. Armed with an average $265,000 accumulated equity in a typical single-family home (see chart below), homeowners are taking advantage of prime market conditions to shop for and buy a bigger, better or newer home.

 

The move-up buyer makes up approximately 30 to 40 percent of the real estate business, according to Mike DeMello, real estate agent at Prudential Location. He cites the most common reasons for moving up as being an increase in family size or wanting to be closer to town.

 

“Some want to move locations to get into a better school district or they recently switched jobs so their commute is different,” says DeMello. “And then there are others who can afford a little more now with their increased equity, and that’s the primary motivation.”

 

While the reasons may vary, tapping into equity has opened the doors for many homeowners and made for some of the greatest success stories of the recent boom in property prices. And often, using equity combined with low interest rates makes it possible to substantially upgrade with little or no increase to monthly payments.

 

The key, according to DeMello, is to be realistic.

 

“What I’ll do with my clients is evaluate their current situation and give them a realistic price range — based on obtaining a 30-year fixed loan — and then take them out to show them what they can afford. It’s educational. If they like the end result, we can get started. If not, they can stay where they are. It’s that easy.”

 

	Oahu Single Family Median Price and Appreciation - 2000 to 2005
	from MLS Resale Data YTD thru July
		2000		2005		2000-2005
Order	Region	Sales	Mdn Price	Sales	Mdn Price	Appreciation
11	North Shore-Waialua	88	$259,000	116	$650,000	151%
15	Makakilo	53	$213,000	78	$499,500	135%
14	Ewa-Kapolei	152	$200,500	429	$460,000	129%
1	West Honolulu	93	$237,500	128	$539,000	127%
13	Leeward Coast	86	$139,500	205	$310,000	122%
16	Central Oahu	266	$234,000	431	$515,000	120%
9	Kailua	217	$390,000	210	$799,500	105%
10	Kaneohe	130	$320,000	178	$650,000	103%
12	Wahiawa	31	$196,000	62	$395,000	102%
6	Diamond Head-Kahala	105	$670,000	134	$1,350,000	101%
5	Kaimuki	68	$367,500	139	$700,000	90%
17	Pearl City-Aiea	132	$282,500	154	$535,000	89%
4	Manoa	46	$471,870	63	$865,000	83%
2	Nuuanu-Punchbowl	48	$375,000	71	$685,000	83%
8	Hawaii Kai	163	$455,000	184	$789,500	74%
3	Makiki	12	$542,500	29	$875,000	61%
7	East Honolulu	54	$594,000	79	$860,000	45%
	Oahu	1,774	$300,000	2,719	$565,000	88%

 

Starting with the median sales prices in 2000, this chart illustrates the average single-family home’s increase in value in the past five years by neighborhood.

 

 

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