Honolulu Hawaii Homes Real Estate

Is it Better To Buy While Interest Rates Are Low Or Wait For Prices To Drop?

Excellent question! Let’s call the psychic hot line. I wish I knew. I think the biggest factor is the interest rates. Our local economist uses 7-year rates to make his predictions. Here is the 10-year Treasury Note: http://www.forecasts.org/10yrT.htm 5-year: http://www.forecasts.org/5yrT.htm

IF (as in capitalized if) oil prices come down to a reasonable level, AND food prices stabilize, AND we don’t have any major economic catastrophes, AND depending on the price of rice in China, interest rates may stop rising, and possibly decrease. Every time oil prices jump, Mr. Bernanke at the Fed is under pressure to raise interest rates, because everyone has to spend money to pay for gas to get to work. Everyone is spending instead of saving. Banks have to pay more for deposits too. I think we are in an oil bubble now, but that’s a sticky topic (sorry).

My point it that a 1% increase in rates will affect your buying power by between 5 and 10%. So, that $400,000 condo at 6% now with 20% down (~ $2100 per month), now costs 10% more 6 months from now with an interest rate of 7% (~ $2300/month) . Find a mortgage calculator and check for yourself.

On the other hand, more bad news in the housing market will cause more inventory backlog and prices will have to decrease, since less of us will qualify to buy! It’s a big mess.

I always tell people the same thing when they ask me when they should buy: “When you can afford it.”

Yes, you can wait and the rates may increase or you can buy now and the price of the home could decrease. Will home prices drop by 10% or will the rate go up by 1%? Call your agent as soon as you know, because I don’t know. The interest rate is the big IF. Learn as much as you can about your local market. Talk to your friendly neighborhood Realtor. Get qualified by a loan officer. Be ready to move and when you feel comfortable, get your best deal.

Tags: interest rates, prices

Best And Worst Cities For High-Paying Jobs

Forbes.com recently did a story on the Best And Worst Cities For High-Paying Jobs .

Media coverage of America’s best jobs usually focuses on blue-collar sectors, like manufacturing, or elite ones, such as finance or technology. But if you’re seeking high-wage employment, your best bet lies in the massive “business and professional services” sector.

This unsung division of the economy is basically a mirror of any and all productive industry. It includes everything from human resources and administration to technical and scientific positions, as well as accounting, legal and architectural posts.

Overall there are roughly 17 million professional and business services jobs, 4 million more than manufacturing. This makes it twice as big as the finance sector and five times the size of the much-ballyhooed tech sector. While its average salary–roughly $55,000 a year–is somewhat lower than in those other elite sectors, its wages are still higher than those in all the other large sectors, like health. The sector’s $1 trillion in total pay per year accounts for nearly 20% of all wages paid in the nation; finance and tech together only account for $812 billion.

No. 10: Rochester, N.Y.
Known as a center for imaging due to the presence of major employers Xerox and Kodak, professional and business services jobs here have increased by nearly 5% in the last year. Also home to significant food, chemical and plastics production, the region has become a major health care and education center, with the University of Rochester leading the way as the region’s biggest employer.

No. 9: Peoria, Ill.
With a professional and business services sector that has grown 35% since 2008, the local economy is driven by agriculture and manufacturing. Peoria is home to construction giant Caterpillar, which employs roughly 18,000 people. With a solid high school attainment rate, there is a large population of educated, qualified individuals to fuel the workforce at a price point considerably lower than nearby Chicago’s–and that allows companies here to hire more workers.

No. 8: Chattanooga, Tenn.-Ga.
A once-shrinking city, Chattanooga has rebounded and is now actually growing despite the recession. It represents the economic potential of a new industrial zone in the South that could benefit from the expansion of foreign-based producers as they choose to build factories there. For example, Volkswagen is opening up a new production plant in the city. Insurance company Blue Cross Blue Shield also maintains a large office in Chattanooga.

No. 7: Wichita, Kan.
Though it is known as the “air capital of the world,” Wichita is home to a variety of companies. Aircraft manufacturers such as Boeing, Cessna, Bombardier Learjet and Raytheon all have major offices here. Agriculture stalwart Cargill has a sizable base in Wichita, and billionaire Charles Koch’s privately held conglomerate, Koch Industries, is headquartered here.

No. 6: Bethesda-Frederick-Rockville, Md.
This region’s professional and business services sector has grown nearly 22% since 2007. Bethesda is home to defense behemoth Lockheed Martin as well as Catalyst Health, a major health care provider. (The National Institutes of Health headquarters are also in Bethesda.) The local economy of this Washington, D.C., suburb is diverse, with no single dominant industry. Because of its proximity to the nation’s capital, it also benefits directly from the rapid expansion of federal government under Barack Obama.

No. 5: Virginia Beach-Norfolk-Newport News, Va.-N.C.
The economic makeup of the Virginia Beach-Norfolk-Newport News region is diverse, but with four military bases in the region, the U.S. Army and Navy wield a lot of influence. Major firms based in the area include online discount retailer Dollar Tree and transportation company Norfolk Southern. This combination of private- and public-sector employment drives growth–and jobs–in the business services sector.

No. 4: Houston-Sugar Land-Baytown, Texas
Professional and business services make up the largest component of Houston’s economy, making up roughly 15% of its jobs. The economy here remains heavily energy-driven, with jobs to be found at the myriad energy companies operating in the area. Some major energy companies that call Houston home are ConocoPhillips, Noble Energy and National Oilwell Varco.

No. 3: Austin-Round Rock, Texas
The local economy is governed by technology. Major industries include wireless technologies, semiconductors and software; Dell calls Austin its home. The number of major corporations in this region provides many job opportunities in the professional and business services sector.

No. 2: Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.
Jobs in professional and business services make up 23% of this region’s economy. The local and federal governments, including the White House and Pentagon, create the need for high-end employment, including but not limited to legal and accounting positions. As federal power expands, so do opportunities for well-paying jobs in the area.

No. 1: Northern Virginia, Va.
This part of Northern Virginia is a commuting suburb–and the middle-class hub–of Washington, D.C. The educated workforce here is in close proximity to one employer that is still hiring: the federal government. This in turn has created a whole set of opportunities for “beltway bandits,” who serve the government as consultants, lobbyists and engineering specialists. As a result, professional and business services positions here make up a larger percentage of the local economy than any other in the country–providing a 27.2% share of the region’s jobs.

In Depth: Best Cities For High-Paying Jobs

In Depth: Worst Cities For High-Paying Jobs

Related Stories from Forbes.com

• Best U.S. Cities To Earn A Living
• The World’s Best-Paid Cities
• Europe’s Best Paid Cities
• Where Americans Earn The Most
• America’s Best And Worst Cities For New Jobs

Related Honolulu Hawaii Stories from Forbes.com

• Honolulu HI on Best Places For Business And Careers (2009)
• Why The ‘Livable Cities’ Rankings Are Wrong
• America’s Changing Landscape
• America’s Cleanest Commutes

Tags: Honolulu, Honolulu Economy, jobs

Hawaii Investments – How and Why to Buy Condos, Homes and Commercial Investments

Hawaii follows an 8 to 10 year cycle of plateaus, dips and rises in value. Home prices doubled (5MB PDF) from 2003 to 2006. On Maui they nearly tripled. Another interesting item is that recessions have been occurring approximately every 11 years, 1980, 1991 and 2002. After each recession home prices climbed for 6-8 years then leveled off or dipped. Prices peaked in 1983, 1991 and early 2006. As of the fall of 2009, median prices are aout 20% below their peak, and approaching 2005 prices. Now is the time to make a Hawaii real estate investment for numerous reasons, not the least of which is interest rates have bottomed out.

HEC’s (Hawaii Economic Council’s)  survey also shows that 44 percent of company job groups will not see an increase in their pay for 2009.

Visitor industry recovery will be slow, held back by cautious consumers in the US and Japan. The hotel occupancy rate will average an abysmal 66.1% this year and will remain below 70% until the end of 2011. Job losses will end by early 2010, but the average job count in 2010 will still be eight-tenths of a percent lower than this year. The unemployment rate stabilized over the summer in the 7.0-7.4% range, but we expect a further rise to an average rate of 8.1% in 2010.

Combine all of this with a massive decrease in State spending, a$2 billion budget shortfall and union and school layoffs, and you have a “Buyer’s Market.” Hawaii’s unemployment is the highest that it has been in 30 years. The Department of Business, Economic Development & Tourism economic indicators shows a decline in general excise tax payments of over 30%! Existing home sales volume is down over 15% from last year. Maui, Kauai and Hawaii are seeing similar or worse numbers.

“Between 2017 and 2020, the median home price will be over a million (dollars), said Carl Bonham, UHERO executive director. “When we get to the peak of the next housing cycle, home prices will have doubled again,” as they did from 1998 to 2006 according to a Star Bulletin report. This is often said about an investment in Hawaii homes, they double in cycles.

Due to an anticipated rise in mortgage rates and additional factors, the affordability index will likely be at 50 percent or below by 2017 or 2018, “so the most affordable time (to buy a single-family home) is probably this year and next year,” Bonham said. The last time the index exceeded 100 percent was in 2001.

So, when you’re ready to take a serious look at hawaii investments, properties such as commercial real estate, homes and condos should be at the top of your list. Send me an email at frank@hawaiihome.biz

Tags: hawaii investment, hawaii properties, hawaii property

Hawaii Budget Shortfall Forecast to Increase Next Year

How low can you go?

• At least 48 states have addressed or still face shortfalls in their budgets for fiscal year 2010 totaling $168 billion or 24 percent of state budgets.
• An unusual number of these states are still struggling to balance their 2010 budgets two months after the start of the fiscal year. Three states — Arizona, Michigan, and Pennsylvania — have not yet adopted budgets for 2010. In addition, new shortfalls have opened up in at least 15 of the states that have adopted budgets — California, Colorado, Georgia, Hawaii, Kansas, Kentucky, Maryland, New Mexico, New York, Rhode Island, Utah, Vermont, Virginia, Washington, and Wyoming — plus the District of Columbia . These additional gaps — some of which have already been addressed— totaled $28 billion.
• Source: Center on Budget and Policy Priorities

The real news is that if, as is widely expected, the economy does not begin to significantly recover until the some time in calendar year 2010 and unemployment remains high through 2010, state shortfalls are likely to be even larger in fiscal year 2011 (which begins in July 2010 in most states).

To make matters worse, the Hawaii State Government is trying to pass along tax increases, in the form of higher transient accommodation taxes, among other things.

Among other increases, legislators approved three additional income tax brackets on top of the current nine, taking the top income tax rate from 8.25 percent to a whopping 11 percent. Hawaii now has the highest state income tax rate in the country and more tax brackets than any other state.

Another tax increase targets the state’s most important, and already struggling, industry: tourism. With hotel occupancy at a record low, the legislature raised the “transient accommodations” tax on hotel rooms from 7.25 to 9.25 percent—a 28 percent increase.

Expenditure cuts and tax increases are problematic policies during an economic downturn because they reduce overall demand and can make the downturn deeper. So, Hawaii is closing schools, which in turn will raise less intelligent children, who will some day run the State legislatures and probably raise taxes even higher.

Tags: Honolulu Economy, taxes

Hong Kong Business Association of Hawaii (HKBAH)

Contact Devin Ehrig at 1 (818) 437-5074 or via email: info@hkbah.com

Join us for our Business After Hours Membership Mixer Event.

THURSDAY, JUNE 4, 2009 – 6:00PM – 8:00PM

P.F. CHANG’S – CHINA BISTRO (WAIKIKI)
Royal Hawaiian Shopping Center
2201 Kalakaua Avenue, Building A, Suite 116
(4-Hour Free Parking with Validation in the Center)

This is a great way to:
Connect with your fellow members, meet new friends and new business contacts.
Build your business network and discover what other business has to offer. Promote and showcase your business, products or services in an informal atmosphere. (Tables are limited, first come first served. RSVP is NOT required)
Find out more about the HKBAH activities and up-coming events and the Hong Kong TDC trade shows and exhibitions 2009. Help to build the HKBAH network by bringing a potential new member, if he/she joins, your event admission is FREE.
Have FUN!
Event Highlights:
No Host Cocktail, Choice of Soft Drink, Iced Tea or Coffee
Pupu:
Crispy Green Beans
Lettuce Wraps
Crab Wonton
Calamari
Live Music
Entertainment by Local
Artist
Door Prizes
THURSDAY, JUNE 4, 2009
6:00PM – 8:00PM
P.F. CHANG’S
CHINA BISTRO
(WAIKIKI)
Royal Hawaiian Shopping Center
2201 Kalakaua Avenue,
Building A, Suite 116
(4-Hour Free Parking with Validation
in the Center)
Member / Guest
Admission: $20
MasterCard
Pay at Door Visa
RSVP

For more information, contact Devin Ehrig at 1 (818) 437-5074 or via email: info@hkbah.com

Tags: Hong Kong Business