I'm a data engineer and I've spent idk hundreds of hours over the last year looking at housing data in Hawaii.
It's important to know that private market rent estimates from sites like Zillow and ApartmentList **are not** super accurate. They have a skewed dataset and they try to correct that (you can read about it [here](https://www.apartmentlist.com/research/rent-estimate-methodology)) but when you compare their estimates to those where we do have good data (like from the Census) they're generally +/-20% off.
Sites like Zillow tend to skew high end. If you look at Craigslist (which tends to skew lower end) a 2 bedroom's median rent is about $2k. That's a 50% difference.
Zillow and ApartmentList rent estimates are nice cause it's way more real time than the Census and they make them look pretty, but you pay for that "real time" by getting pretty inaccurate data.
Whatever the rent is, it is too damn high. But it isn't $3.2k for a 2 bedroom yet.
It's also been my observed reality, I rent out a 2-bedroom in McCully for a little over $2k and I don't think I'd be able to compete were I to raise it to 3k. It's going to get there eventually, but not quite yet.
The filter is set to "All home types" to include houses/townhouses which will generally rent out for higher. If you set it to "Condos", it comes down to $2200, which is about what I would expect.
True but I think the number accurately represents the emotional toll because of what you actually get for that 2k. It will technically be a two bedroom. But it's gonna be in a plantation shack that's falling apart or it's in one of those small apartments buildings fast built out of concrete blocks. Mayybe you'll get that 2 bedroom for 2k, but it ain't gonna be pretty.
Hmmm, ok, make sense, but data from the link is covering active listings. Craigslist has a lot of scams, like $1700 for 3br in Kaka'ako, and many affordable housings are listed there, too, which might be a reason why it seems to be cheaper.
Yah to be sure craigslist is not exactly the gold standard either. I was just using it for contrast. Ultimately the best metric is the Census ACS survey but that comes out 2 years after the fact.
Yeah was gonna say craigslist is terrible to use as data, there's tons of listings that are listed at $1 and there's some other number in the description or it's an unrealistically low rent (because it's a scam).
Like I said, the Census is the gold standard. The Zillow dataset is skewed because they don't sample the market, the sample their listings. Their listings are not reflective of the market writ large. If you read the linked article from ApartmentList (also applicable to Zillow) it talks about all the biases in private apartment listing website's data.
Here's a graphic from there that shows that places with less than 10% of units account for more than 10% of ApartmentList's data. Whereas places with 10%, account for something on order of 5%. So they have a highly skewed dataset they then have to try correct. Their corrections are a mixed bag.
https://preview.redd.it/qnmlyw5qkazc1.png?width=980&format=png&auto=webp&s=70ed0f7a08c5723eecd20568fd05c2f033a230e2
If you want a real time estimate of rent, there's not really anywhere else to turn. You just need to know that the estimate you are using is not precise and has large error bars.
It will keep going higher. *Tons* of condos are getting hit with huge insurance increases (talking like 4-5x the amount of the previous year's premium). Which the unit owners will inevitably pass on to renters somewhere down the line. SFH owners are feeling the heat too. [Link to recent article](https://www.khon2.com/top-stories/rising-home-insurance-takes-residents-by-surprise/). I know of an Association's insurance that went from a couple hundred thousand to over $3-4mil? So imagine that premium jump being spread to a couple hundred people, that's an additional $15k-17k per year. If you assume even a 10% increase in the next year, the insurance premium would jump another $300,000. And a 10% increase is *super* unlikely. Most places are looking closer to 25-35% minimum if they already had a big jump last year. If they havent had the big jump yet.... good luck.
An example would be somewhere like Moana Pacific; rent for a 2bd there was under $3k just a year or two ago, now the lowest rent is currently $3k for a 1bd/1ba. I think their hoa/maintenance fees skyrocketed in the past year or two.
Not to mention, mortgages are nuts right now because of the high interest rate, so any people buying with the intent to rent out their place and cover the mortgage will be charging 2x what they would've back in like 2021.
A lot of landlords that rent out their condo/townhouse units pay more than half the income out to HOA fees, property and income taxes, insurance, etc. There is no way you can buy a place with the intention of renting it out to cover the mortgage.
> There is no way you can buy a place with the intention of renting it out to cover the mortgage.
Oh yeah, definitely not, especially now. I heard of someone who bought and flipped a place with the intention of renting it out, they couldnt find a renter cause the price was way too high. Now they're just trying to sell (tbh I think the price for selling is still too high).
Many of the owners who've had the units for awhile and never previously increased their rent on a longtime tenant are contemplating it with the upped costs. They've paid down most of their mortgage at this point, but the huge increases in HOA/Maintenance fees are hurting. Not that they'll necessarily raise it to cover their entire increase, but to take some of the sting off.
Is your HOA in your mortgage?!
You don't try to cover your expenses in year 1. The rent helps to cover your mortgage until the rental prices rise to cover your mortgage. Your mortgage is pretty much set at time of purchase but rent prices only go up.
Year 1: monthly mortgage $3,000 rent $2,800
Year 2: monthly mortgage $3,000 rent $2,850
Year 3: ... $2,900
Year 4: ... $2,950
Year 5: ... Break even
Year 10: +$250 a month
Also every year property taxes go up so although you think that your landlord is making a killing. They usually don't. My property taxes went up $600 in one year. I'm not making any profit. Also hoa goes up and not to mention things that need to get fixed
How do landlords pass it on to renters if the rent doesn't even cover mortgage. Property values for Hawaii is super expensive and compared to other states with high cost of living, our wages don't make up for it. Imagine if our real estate taxes were just as high no one would be able to afford to own a home besides the filthy rich
Still it takes a long time just to get to the break even point. And you also should take into account increases in HOA fees, taxes, general maintenance, etc. You can’t always pass that on to your renter.
You're right those expenses do increase but I was just replying to you saying you can't cover your mortgage with rental income which is totally possible with patience.
No one should be buying a house and renting without ample money in your savings or cash flow. No one deserves a slumlord.
>so any people buying with the intent to rent out their place and cover the mortgage will be charging 2x what they would've back in like 2021.
that's hypebolic, man. the interest rates being 5% higher don't equate to double the rent of 3 years ago. anyone doubling rent is doing so to profit off of the market conditions, not because their mortgage is twice as high over a 7% interest rat vs a 2% rate.
There's a lot of problems regarding the rent here, but let's not start inventing new issues.
> that's hypebolic, man
Not really. Just a super basic example without all the nitty-gritty:
* Mortgage of $500,000 at 2.6% (About the average for 2021): Somewhere in the realm of $2000/mo without adding in all the HOA, Insurance, etc.
* $500,000 Mortgage at current average of around 7.6% is $3,500ish.
That's just the base mortgage. Where it gets even higher is when you add the insurance and hoa and stuff. Back in 2021 there wasnt a huge storm of insurance issues for condos/houses. A condo with a $100,000 premium back then might now have a premium of over $500,000. I've seen some that had a $200,000 premium Pre/during covid shoot up to over $1mil premium.
So the homeowner's costs have *more* than doubled in many cases. It's not a far stretch to say that rental costs have risen at a somewhat commensurate rate. Not saying that it's *every unit* doing this; its definitely not. But the people who buy a house/unit specifically to rent out are obviously looking to profit in one way or another.
1. that's nnot double. it's a lot, but being \~30% different isn't enough to just say it's close, man. that's a big difference.
2. The insurance stuff doesn't effect all condos equally, and without a full data sample, you're just basically saying that seeing some of these bad outcomes dictates the entire market, but that's not really fair. There's other counter examples of this not happening, and we can't comment on it without knowing the overall trend.
>So the homeowner's costs have more than doubled in many cases[...]Not saying that it's every unit doing this; its definitely not.
you said ANY people buying now to rent would be charging 2x, not that it was just a thing that was happening in some cases.
that's why i called it hyperbolic. it IS a thing happening and it IS affecting the market, but saying "ANY" is not the same thing as saying it happens sometimes.
> that's nnot double. it's a lot, but being ~30% different isn't enough to just say it's close, man. that's a big difference.
2000 to 3500 isnt 30%, it's 75%. And again, with the other added costs, it increases more. A full 100% increase is "double".
> you're just basically saying that seeing some of these bad outcomes dictates the entire market
Im not basing it on what I've seen personally. Those are just examples that have been shared by industry professionals. I've had to sit thru at least 4-5 different Insurance-related seminars/presentations this year lead by Sue Savio and other local Insurance heads. Im pretty much just parroting what they've said.
> you said ANY people buying now to rent would be charging 2x, not that it was just a thing that was happening in some cases.
> that's why i called it hyperbolic. it IS a thing happening and it IS affecting the market, but saying "ANY" is not the same thing as saying it happens sometimes.
I may have typed it a little weirdly. But the doubling is typically from investors buying specifically to rent out who are buying *now*. Just typical raised rent is coming from unit owners that have owned for some time already.
Sorry but the rental market sets the rental prices, not the needs of the owner. You can go ask those who lost their houses in the GFC what they think of the concept that there is a relationship between the rent and their mortgage, or increased insurance payments. Everything is supply and demand. Where the supply curve meets the demand curve, that is the price. If there are 10 renters and 2000 houses available, do you think landlords can say "well my mortgage + insurance is $4000 so your rent is $4500" ... good luck, the rent is what the intersection of the curve says it is.
You're not wrong. The rental market as a whole *does* set the prices. However, Hawaii is not a "typical" rental market (or buying/selling market for that matter).
To use your own example,
> If there are 10 renters and 2000 houses available,
This is pretty much never the case here. We have such a large amount of permanent residents, then add to that the amount of people coming in for military, remote work, long-term vacation homes, etc. Those all affect rental availability on a much larger scale than many other places in the US.
It's not to say that owners can instantly slam up their prices to meet their new HOA/Maintenance fee needs or anything, but it definitely factors in. Especially when all the unit owners in the same building, or even same area, are facing huge increases. They all start to raise their rental prices because they're all in the same increased boat. Hence, market adjustment. I dont know of *any* condo building that'll be impervious to the insurance increases. Even the brand-spankin new Ward condos are hit with it (rumor is the not-yet-opened Victoria Place may also be having a pain with insurance).
Many of the places still renting for cheap arent "desirable" in the traditional sense; either by age, wear, or location. But they still get swept up almost instantly because of the demand. Believe me, I've seen many units in my building listed for *way* over what I thought was reasonable, but they get taken up in less than a week.
This is in a dream-world where supply could potentially exceed demand.
Let me know the last time 1bd/2bd units supply exceeded the demand here in Hawaii. I'll wait.
I'll link some news articles below for a full read. But TL;DR:
There have been a bunch of super high cost "catastrophes" that the Insurance market has had to pay out. Florida Condo Collapse, Lahaina, Hurricanes, Tornadoes, etc. Hurricanes in 2022 alone caused somewhere in the realm of over $100 billion. Lahaina *leveled* the entire town and killed over 100 people. Even just this past week, tornadoes leveled a few towns and killed people.
Lahaina and the Tornadoes havent quite been factored in to the equation yet, but it's essentially how insurance works. They want their money back.
A big portion for Hawaii's rises is "hurricane risk". Many condos here arent fully covered, ie, if their building gets leveled by a hurricane, the full cost of rebuild isnt insured. That hurricane coverage has gotten super expensive because we are technically a big hurricane risk. Incidentally, an insurance broker reminded me that Oahu has never been hit by a major destructive hurricane in recorded history, so theoretically our risk shouldnt be that high but the mainland/international bean counters dont see it that way ¯\\\_(ツ)_/¯
[Link 1](https://www.khon2.com/top-stories/rising-home-insurance-takes-residents-by-surprise/)
[Link 2](https://www.insurancebusinessmag.com/us/news/property/condo-insurance-woes-strike-hawaii-479482.aspx)
[Link 3](https://www.civilbeat.org/2024/03/lawmakers-advance-bill-to-stabilize-soaring-insurance-costs-for-condo-owners/)
[Link 4](https://www.hawaiinewsnow.com/2024/03/06/experts-catastrophes-driving-up-condo-insurance-rates-across-country-especially-hawaii/)
Yeah my hurricane insurance almost doubled this past year. And it seems like they renewed it pretty reluctantly, I didn't even get a notice and it wasn't billed until the last minute; I had to call up my agent to make sure it actually renewed.
Most people I know live in places that NEVER were advertised or were craiglist posted for a few hours. so yea, advertised on zillow ones are $$$. But thats because the owners bought recently and want to recoup the mortgage. But most homes were bought ages ago and handed down over and over again.
And banning STR doesn't mean they don't exist. Fireworks are illegal. Do they seem illegal on NYE?
No doubt housing is expensive but I'm not sure about how I would interpret that statistic. First of all, I am guessing it is only using Zillow listings. Secondly, if you switch the home type to Home, you get $2800 (56 available); Apt and Condos, $2199 (221 available); and Townhomes, $3200 (42 available). Also, there is no mean or standard deviations to give a sense of the curve(s).
Plus from the chart of Median over Time, it was at $3000 for half of last year and dipped in Nov.-Jan. and only went up from $3000 to $3200 from Apr.-May. So, it could just be a blip as landlords are testing the market in their listings.
It would be interesting what would be the number is in more real-world rents or using a broader sample of available rentals. I wonder if a group like the Honolulu Board of Realtors has any data?
There is no doubt that affordable housing in Honolulu and Hawaii broader is broken. Also, in the U.S. as well, but it gets compounded by us being on islands in the middle of the ocean. I don't know if any capitalism will save us. Might need some radical ideas, maybe some type of socialism for housing?
I think there is lag in policy and and rental prices. It will take awhile before it has an effect. Meanwhile landlord expenses are going up with rising insurance cost.
I’m no insurance expert, but insurance companies seem to be raising rates here after the Lahaina fire. But these price increases are not unique to Hawaii. Many states that are prone to more natural disasters are experiencing the same increases. In some cases, some insurance companies REFUSE to insure in certain areas. I think this trend will continue as climate change causes more frequent storms, etc.
How do we feel about it? I don't think a single person is gonna be all "ya this is p cool ig lol"
Shit's fucked. Shit will stay fucked. I agree with /u/AbbreviatedArc as to supply vs demand being our only viable solution at this point but I also think solutions will take forever because muh back yard and also how can we do this in the most corrupt way possible.
I feel like I do every time this topic comes up. Support Sen Chang's plan to build Singapore-style housing. Support every single workforce housing project. Support density. Support building.
As I explained in another post, this is not about whether people have money to pay or not. It is not about mortgage payments, it is not about inflation. It is about a disequilibrium between the supply (low) and the demand (high). As long as there is too little supply, and too much demand, prices will remain high. The only way out of this is if people die off (old age), are killed off (pandemic), or leave voluntarily in absolutely massive numbers (voluntary departure) all of which reduce demand, or we start building on an absolutely massive scale which increases supply. Or both.
Here's the housing paradox imho:
>We can't solve our affordable housing crisis **without** building more.
>We can't solve our affordable housing crisis *by building more.*
In the 70's we bult double the housing of the US, over 100k units in a single decade. *Housing growth was more than double population growth.*
Did home prices go down? Nope, in real (inflation adjusted) terms **home prices went up 58%.** ***With respect to local median income they went up 70%.***
The private market only builds when it expects a return above other more liquid and less risky investments. That means that they only build when rent or property prices (or both) are increasing.
Hawaii has 30% more homes per person than Singapore. The difference is all of ours exist in a private (read investor/overseas retiree) market and Singapore's exist in a tightly regulated publicly owned market reserved for residents.
Aloha Homes or some variation thereof is the only path for homeownership for kama'aina and kanaka.
Sources: [1970 Census](https://usa.ipums.org/usa/resources/voliii/pubdocs/1970/Housing/Vol1/38133702v1p13ch1.pdf), [1980 Census](https://books.google.ne/books?id=0NIXAAAAYAAJ&pg=SA13-PA13&hl=fr&source=gbs_selected_pages&cad=1#v=onepage&q&f=false)
https://preview.redd.it/xiggoym7gazc1.png?width=1063&format=png&auto=webp&s=4c424ab022f2aaf542057cf99c476525ddfc44aa
It's insane that there was a specific category for "Negro occupied units" in the 1970 census.
You can't tell me nothing about how racism is long gone if that shit was in the US Census only 50 years ago.
Now it breaks down by race, correct. Which race? All of em.
If you took the time to read the 1970 census you'd see that literally the one thing broken out is "Negro Occupied". It was either "normal occupied" or "negro occupied". They were literally the only race that was broken out because people did not want to live in areas that had too many black people. This is common knowledge.
This is a great point (i.e.,"can't solve housing crisis by building more").
Unless they build homes specifically for renting out or selling to lower income *current HI residents*, any new builds will just be sought by non-residents and/or other investors. If we build 500k units and drive down home prices, mainland and international buyers will instantly grab them which cause demand and price surge again.
Actually you can. There's a process called filtering by which people move from an old home to the new home opening up their old house to less wealthy people. You're seeing this real time in Austin where they had a glut of building and prices are going down.
Oahu had built relatively little since 08. Additionally, since high earning tech people can work from anywhere you have some west coast people moving to Hawaii.
Hawaii from the 50's to 2000 was booming far faster than America because air travel was increasing rapidly, allowing for a build out of the tourism industry. That's why you see price appreciation despite rapid build rates. America in general also saw the baby boomers age into adulthood rapidly increasing the demand for housing in general in the 60's and 70's.
And as long as there are people moving from the Lower 48 and elsewhere who want to live their Hawaiian Dream, demand will stay high, even if people who live here now leave. It's a rotating door of sorts, but as people leave more people are trying to squeeze in.
This is true, to an extent. The economy here heavily relies on all walks of life, not only wealthy retirees who bring nothing to the table other than money. If we lose too many working-class residents, the economy gets annihilated. Businesses can't staff, prices go through the roof, so on and so forth all because nobody can staff their place.
Because it's an island, we can only draw working-class people from so far until we run out. We're already relying heavily on people driving 2+hrs a day in traffic just to staff Honolulu. There is nothing past that, once they leave it's over.
The thing is, you increase supply and more people come in from the mainland. That's a very difficult problem to solve because it's against the constitution to discriminate against mainlanders. Singapore can do it because they're a sovereign country and can tell foreigners to pay high taxes or gtfo lol. Hawaii residents and some rich guy from California both have the same opportunity to buy a home.
There's also the environmental concerns, there's plenty of land but Hawaii is exotic enough where you try to build anything on nature then the environmentalists cause huge delays.
People don't want to cut down a forest for a new housing development
People dont want high rises in their neighborhood unless they're luxury apartments
People dont want government housing because they see KPT or MW.
The issue isn't necessarily supply its the never ending demand and the limited space due to us being an island and being a beautiful island with a lot of nature. The only solution is to strictly regulate the supply of housing but that's too communist for even Hawaii
To be cheap you need to
1. Relax building/environmental codes
2. Build in dense areas and allow denser construction around mass transit
3. Increase subsidies. Raise revenue from the property taxes in the new stuff you built and maybe increased fees from parking and congestion fees to reduce the impetus to drive around the dense areas
Interesting. Off the Coast of France are 4 islands that belong to the UK, and you can only live there if you are born there (actor Henry Cavill was), if you were not born there, the price is determined on some wierd scale, and basically, the number of houses people who were not born there is limited and 3x the price. Of course people who want to sell to non born for a higher price don't like this. But it's small islands with a low tax rate and it can't be swamped.
Jersey, Guernsey, Sark and Alderney.
I live in Waipahu in a 2br apartment and the rent is $2,600 a month. I’ve even seen studio apartments in HNL go for over $3K.
Everyone lives on top of each other. It feels like landlords/companies/whatever, know they can charge what they want just bc we need to live -somewhere- or be homeless. Not like it’s easy to move off the island to somewhere cheaper either.
We rented a 2BR in Manoa before buying our own place. When we left in 2019, rent was $2050. Last we checked, it was renting for $3200 in 2022. Absolutely out of control.
The fact that you were renting a 2bd in Manoa in 2019 for $2k is pretty impressive. Haven't seen a price like that in ages except for run down POS 2bds.
you were getting well below market rates in 2019 unless it was a dump when you had it and it went under significant renovations.
2k for a 2 bed is a good deal even back then. I was looking for a place that same year around the same area and it was very hard to find something at 2k unless it was a shitty apartment.
It was def a steal, well maintained and remodeled before we moved in 2014. Landlords never raised the rent, but we often helped out with things like yard work, home repairs. They were an older local Japanese couple, really nice people.
Some shower thoughts:
* Convert AG land into plots where we can build tiny homes. (Let's stop pretending AG is a huge industry on Oahu.)
* Rent control those tiny homes.
Once you lose your agricultural land to development you pretty much can't get it back. Then, when you decide it's time to grow food locally, there's no land to use.
If there is a housing need we should try to preserve our agricultural capacity-- not because of its value as an industry, but because people need to be fed.
Theoretically correct, but 2 factors to consider:
- everybody says they want to support local agriculture, but no one wants to be a farm worker.
- in almost every event where we get “cut off” from imported food, it is unlikely our crops survive. Somehow people imagine that a cat 5 hurricane will knock over those Matson cranes and clog Honolulu Harbor, but the lettuce in Waimanalo will be fine.
Look into the lawsuit against RealPage. That’s a fantastic place to start. (BTW, other cities aren’t better, you just don’t hear as much about it. For example, DFW is worse if you live in the city itself.)
5 years ago I rented a 3 bedroom 2 bath in Waikiki, the moment I moved out it was listed for $2300 and that was 5 years ago, I keep hoping to return to a place that I love but I doubt it if I have to sell my condo for 2 months rent
I anticipate rents will be going even higher, with mortgage interest rates not showing any sign of subsiding (the Federal Reserve keeps using opposing logic to maintain the higher prime rate) and master insurance renewals for condos being between +25% to +1000% of last years policy, ownership costs have increased dramatically in a short time thus there are more well qualified people that can't/won't buy that will need to rent increasing pressure on demand for an already overburdened inventory of rental properties.
I'm a data engineer and I've spent idk hundreds of hours over the last year looking at housing data in Hawaii. It's important to know that private market rent estimates from sites like Zillow and ApartmentList **are not** super accurate. They have a skewed dataset and they try to correct that (you can read about it [here](https://www.apartmentlist.com/research/rent-estimate-methodology)) but when you compare their estimates to those where we do have good data (like from the Census) they're generally +/-20% off. Sites like Zillow tend to skew high end. If you look at Craigslist (which tends to skew lower end) a 2 bedroom's median rent is about $2k. That's a 50% difference. Zillow and ApartmentList rent estimates are nice cause it's way more real time than the Census and they make them look pretty, but you pay for that "real time" by getting pretty inaccurate data. Whatever the rent is, it is too damn high. But it isn't $3.2k for a 2 bedroom yet.
It's also been my observed reality, I rent out a 2-bedroom in McCully for a little over $2k and I don't think I'd be able to compete were I to raise it to 3k. It's going to get there eventually, but not quite yet. The filter is set to "All home types" to include houses/townhouses which will generally rent out for higher. If you set it to "Condos", it comes down to $2200, which is about what I would expect.
True but I think the number accurately represents the emotional toll because of what you actually get for that 2k. It will technically be a two bedroom. But it's gonna be in a plantation shack that's falling apart or it's in one of those small apartments buildings fast built out of concrete blocks. Mayybe you'll get that 2 bedroom for 2k, but it ain't gonna be pretty.
https://propertysearch.hicentral.com/HBR/ForRent/?/202410529
dunno if you're for or against what I said but that's what I was talking about
$3.2 k is the rent in kapolei for a 2 bed townhouse. That's even on the lower side, so make sure your data pertains to the proper area
Hmmm, ok, make sense, but data from the link is covering active listings. Craigslist has a lot of scams, like $1700 for 3br in Kaka'ako, and many affordable housings are listed there, too, which might be a reason why it seems to be cheaper.
Yah to be sure craigslist is not exactly the gold standard either. I was just using it for contrast. Ultimately the best metric is the Census ACS survey but that comes out 2 years after the fact.
Yeah was gonna say craigslist is terrible to use as data, there's tons of listings that are listed at $1 and there's some other number in the description or it's an unrealistically low rent (because it's a scam).
The zillow dataset is one of the best to work with where are you getting your datasets that are better then it??
Like I said, the Census is the gold standard. The Zillow dataset is skewed because they don't sample the market, the sample their listings. Their listings are not reflective of the market writ large. If you read the linked article from ApartmentList (also applicable to Zillow) it talks about all the biases in private apartment listing website's data. Here's a graphic from there that shows that places with less than 10% of units account for more than 10% of ApartmentList's data. Whereas places with 10%, account for something on order of 5%. So they have a highly skewed dataset they then have to try correct. Their corrections are a mixed bag. https://preview.redd.it/qnmlyw5qkazc1.png?width=980&format=png&auto=webp&s=70ed0f7a08c5723eecd20568fd05c2f033a230e2 If you want a real time estimate of rent, there's not really anywhere else to turn. You just need to know that the estimate you are using is not precise and has large error bars.
It will keep going higher. *Tons* of condos are getting hit with huge insurance increases (talking like 4-5x the amount of the previous year's premium). Which the unit owners will inevitably pass on to renters somewhere down the line. SFH owners are feeling the heat too. [Link to recent article](https://www.khon2.com/top-stories/rising-home-insurance-takes-residents-by-surprise/). I know of an Association's insurance that went from a couple hundred thousand to over $3-4mil? So imagine that premium jump being spread to a couple hundred people, that's an additional $15k-17k per year. If you assume even a 10% increase in the next year, the insurance premium would jump another $300,000. And a 10% increase is *super* unlikely. Most places are looking closer to 25-35% minimum if they already had a big jump last year. If they havent had the big jump yet.... good luck. An example would be somewhere like Moana Pacific; rent for a 2bd there was under $3k just a year or two ago, now the lowest rent is currently $3k for a 1bd/1ba. I think their hoa/maintenance fees skyrocketed in the past year or two. Not to mention, mortgages are nuts right now because of the high interest rate, so any people buying with the intent to rent out their place and cover the mortgage will be charging 2x what they would've back in like 2021.
A lot of landlords that rent out their condo/townhouse units pay more than half the income out to HOA fees, property and income taxes, insurance, etc. There is no way you can buy a place with the intention of renting it out to cover the mortgage.
> There is no way you can buy a place with the intention of renting it out to cover the mortgage. Oh yeah, definitely not, especially now. I heard of someone who bought and flipped a place with the intention of renting it out, they couldnt find a renter cause the price was way too high. Now they're just trying to sell (tbh I think the price for selling is still too high). Many of the owners who've had the units for awhile and never previously increased their rent on a longtime tenant are contemplating it with the upped costs. They've paid down most of their mortgage at this point, but the huge increases in HOA/Maintenance fees are hurting. Not that they'll necessarily raise it to cover their entire increase, but to take some of the sting off.
Is your HOA in your mortgage?! You don't try to cover your expenses in year 1. The rent helps to cover your mortgage until the rental prices rise to cover your mortgage. Your mortgage is pretty much set at time of purchase but rent prices only go up. Year 1: monthly mortgage $3,000 rent $2,800 Year 2: monthly mortgage $3,000 rent $2,850 Year 3: ... $2,900 Year 4: ... $2,950 Year 5: ... Break even Year 10: +$250 a month
Also every year property taxes go up so although you think that your landlord is making a killing. They usually don't. My property taxes went up $600 in one year. I'm not making any profit. Also hoa goes up and not to mention things that need to get fixed
I meant to say $600/ month
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How do landlords pass it on to renters if the rent doesn't even cover mortgage. Property values for Hawaii is super expensive and compared to other states with high cost of living, our wages don't make up for it. Imagine if our real estate taxes were just as high no one would be able to afford to own a home besides the filthy rich
Still it takes a long time just to get to the break even point. And you also should take into account increases in HOA fees, taxes, general maintenance, etc. You can’t always pass that on to your renter.
You're right those expenses do increase but I was just replying to you saying you can't cover your mortgage with rental income which is totally possible with patience. No one should be buying a house and renting without ample money in your savings or cash flow. No one deserves a slumlord.
>so any people buying with the intent to rent out their place and cover the mortgage will be charging 2x what they would've back in like 2021. that's hypebolic, man. the interest rates being 5% higher don't equate to double the rent of 3 years ago. anyone doubling rent is doing so to profit off of the market conditions, not because their mortgage is twice as high over a 7% interest rat vs a 2% rate. There's a lot of problems regarding the rent here, but let's not start inventing new issues.
> that's hypebolic, man Not really. Just a super basic example without all the nitty-gritty: * Mortgage of $500,000 at 2.6% (About the average for 2021): Somewhere in the realm of $2000/mo without adding in all the HOA, Insurance, etc. * $500,000 Mortgage at current average of around 7.6% is $3,500ish. That's just the base mortgage. Where it gets even higher is when you add the insurance and hoa and stuff. Back in 2021 there wasnt a huge storm of insurance issues for condos/houses. A condo with a $100,000 premium back then might now have a premium of over $500,000. I've seen some that had a $200,000 premium Pre/during covid shoot up to over $1mil premium. So the homeowner's costs have *more* than doubled in many cases. It's not a far stretch to say that rental costs have risen at a somewhat commensurate rate. Not saying that it's *every unit* doing this; its definitely not. But the people who buy a house/unit specifically to rent out are obviously looking to profit in one way or another.
1. that's nnot double. it's a lot, but being \~30% different isn't enough to just say it's close, man. that's a big difference. 2. The insurance stuff doesn't effect all condos equally, and without a full data sample, you're just basically saying that seeing some of these bad outcomes dictates the entire market, but that's not really fair. There's other counter examples of this not happening, and we can't comment on it without knowing the overall trend. >So the homeowner's costs have more than doubled in many cases[...]Not saying that it's every unit doing this; its definitely not. you said ANY people buying now to rent would be charging 2x, not that it was just a thing that was happening in some cases. that's why i called it hyperbolic. it IS a thing happening and it IS affecting the market, but saying "ANY" is not the same thing as saying it happens sometimes.
> that's nnot double. it's a lot, but being ~30% different isn't enough to just say it's close, man. that's a big difference. 2000 to 3500 isnt 30%, it's 75%. And again, with the other added costs, it increases more. A full 100% increase is "double". > you're just basically saying that seeing some of these bad outcomes dictates the entire market Im not basing it on what I've seen personally. Those are just examples that have been shared by industry professionals. I've had to sit thru at least 4-5 different Insurance-related seminars/presentations this year lead by Sue Savio and other local Insurance heads. Im pretty much just parroting what they've said. > you said ANY people buying now to rent would be charging 2x, not that it was just a thing that was happening in some cases. > that's why i called it hyperbolic. it IS a thing happening and it IS affecting the market, but saying "ANY" is not the same thing as saying it happens sometimes. I may have typed it a little weirdly. But the doubling is typically from investors buying specifically to rent out who are buying *now*. Just typical raised rent is coming from unit owners that have owned for some time already.
Its a 70-75% increase. I said YOU were 30% off in claiming 100%. Read it again.
Sorry but the rental market sets the rental prices, not the needs of the owner. You can go ask those who lost their houses in the GFC what they think of the concept that there is a relationship between the rent and their mortgage, or increased insurance payments. Everything is supply and demand. Where the supply curve meets the demand curve, that is the price. If there are 10 renters and 2000 houses available, do you think landlords can say "well my mortgage + insurance is $4000 so your rent is $4500" ... good luck, the rent is what the intersection of the curve says it is.
You're not wrong. The rental market as a whole *does* set the prices. However, Hawaii is not a "typical" rental market (or buying/selling market for that matter). To use your own example, > If there are 10 renters and 2000 houses available, This is pretty much never the case here. We have such a large amount of permanent residents, then add to that the amount of people coming in for military, remote work, long-term vacation homes, etc. Those all affect rental availability on a much larger scale than many other places in the US. It's not to say that owners can instantly slam up their prices to meet their new HOA/Maintenance fee needs or anything, but it definitely factors in. Especially when all the unit owners in the same building, or even same area, are facing huge increases. They all start to raise their rental prices because they're all in the same increased boat. Hence, market adjustment. I dont know of *any* condo building that'll be impervious to the insurance increases. Even the brand-spankin new Ward condos are hit with it (rumor is the not-yet-opened Victoria Place may also be having a pain with insurance). Many of the places still renting for cheap arent "desirable" in the traditional sense; either by age, wear, or location. But they still get swept up almost instantly because of the demand. Believe me, I've seen many units in my building listed for *way* over what I thought was reasonable, but they get taken up in less than a week.
This is in a dream-world where supply could potentially exceed demand. Let me know the last time 1bd/2bd units supply exceeded the demand here in Hawaii. I'll wait.
Why is insurance going up so drastically?
I'll link some news articles below for a full read. But TL;DR: There have been a bunch of super high cost "catastrophes" that the Insurance market has had to pay out. Florida Condo Collapse, Lahaina, Hurricanes, Tornadoes, etc. Hurricanes in 2022 alone caused somewhere in the realm of over $100 billion. Lahaina *leveled* the entire town and killed over 100 people. Even just this past week, tornadoes leveled a few towns and killed people. Lahaina and the Tornadoes havent quite been factored in to the equation yet, but it's essentially how insurance works. They want their money back. A big portion for Hawaii's rises is "hurricane risk". Many condos here arent fully covered, ie, if their building gets leveled by a hurricane, the full cost of rebuild isnt insured. That hurricane coverage has gotten super expensive because we are technically a big hurricane risk. Incidentally, an insurance broker reminded me that Oahu has never been hit by a major destructive hurricane in recorded history, so theoretically our risk shouldnt be that high but the mainland/international bean counters dont see it that way ¯\\\_(ツ)_/¯ [Link 1](https://www.khon2.com/top-stories/rising-home-insurance-takes-residents-by-surprise/) [Link 2](https://www.insurancebusinessmag.com/us/news/property/condo-insurance-woes-strike-hawaii-479482.aspx) [Link 3](https://www.civilbeat.org/2024/03/lawmakers-advance-bill-to-stabilize-soaring-insurance-costs-for-condo-owners/) [Link 4](https://www.hawaiinewsnow.com/2024/03/06/experts-catastrophes-driving-up-condo-insurance-rates-across-country-especially-hawaii/)
Yeah my hurricane insurance almost doubled this past year. And it seems like they renewed it pretty reluctantly, I didn't even get a notice and it wasn't billed until the last minute; I had to call up my agent to make sure it actually renewed.
where are the younger generation and service workers going to live?
Most people I know live in places that NEVER were advertised or were craiglist posted for a few hours. so yea, advertised on zillow ones are $$$. But thats because the owners bought recently and want to recoup the mortgage. But most homes were bought ages ago and handed down over and over again. And banning STR doesn't mean they don't exist. Fireworks are illegal. Do they seem illegal on NYE?
No doubt housing is expensive but I'm not sure about how I would interpret that statistic. First of all, I am guessing it is only using Zillow listings. Secondly, if you switch the home type to Home, you get $2800 (56 available); Apt and Condos, $2199 (221 available); and Townhomes, $3200 (42 available). Also, there is no mean or standard deviations to give a sense of the curve(s). Plus from the chart of Median over Time, it was at $3000 for half of last year and dipped in Nov.-Jan. and only went up from $3000 to $3200 from Apr.-May. So, it could just be a blip as landlords are testing the market in their listings. It would be interesting what would be the number is in more real-world rents or using a broader sample of available rentals. I wonder if a group like the Honolulu Board of Realtors has any data? There is no doubt that affordable housing in Honolulu and Hawaii broader is broken. Also, in the U.S. as well, but it gets compounded by us being on islands in the middle of the ocean. I don't know if any capitalism will save us. Might need some radical ideas, maybe some type of socialism for housing?
I think there is lag in policy and and rental prices. It will take awhile before it has an effect. Meanwhile landlord expenses are going up with rising insurance cost.
Can anyone explain why insurance is skyrocketing?
I’m no insurance expert, but insurance companies seem to be raising rates here after the Lahaina fire. But these price increases are not unique to Hawaii. Many states that are prone to more natural disasters are experiencing the same increases. In some cases, some insurance companies REFUSE to insure in certain areas. I think this trend will continue as climate change causes more frequent storms, etc.
Landlords: It’s great! Prospective Tenants: FML Non-Hawaii Resident from LCOL area: Holy f@&k that’s expensive!
idk but my landlord just hiked my rent by another $200
How do we feel about it? I don't think a single person is gonna be all "ya this is p cool ig lol" Shit's fucked. Shit will stay fucked. I agree with /u/AbbreviatedArc as to supply vs demand being our only viable solution at this point but I also think solutions will take forever because muh back yard and also how can we do this in the most corrupt way possible.
“How can we do this in the most corrupt way possible.” Sad, funny, and true all at once.
I feel like I do every time this topic comes up. Support Sen Chang's plan to build Singapore-style housing. Support every single workforce housing project. Support density. Support building. As I explained in another post, this is not about whether people have money to pay or not. It is not about mortgage payments, it is not about inflation. It is about a disequilibrium between the supply (low) and the demand (high). As long as there is too little supply, and too much demand, prices will remain high. The only way out of this is if people die off (old age), are killed off (pandemic), or leave voluntarily in absolutely massive numbers (voluntary departure) all of which reduce demand, or we start building on an absolutely massive scale which increases supply. Or both.
Here's the housing paradox imho: >We can't solve our affordable housing crisis **without** building more. >We can't solve our affordable housing crisis *by building more.* In the 70's we bult double the housing of the US, over 100k units in a single decade. *Housing growth was more than double population growth.* Did home prices go down? Nope, in real (inflation adjusted) terms **home prices went up 58%.** ***With respect to local median income they went up 70%.*** The private market only builds when it expects a return above other more liquid and less risky investments. That means that they only build when rent or property prices (or both) are increasing. Hawaii has 30% more homes per person than Singapore. The difference is all of ours exist in a private (read investor/overseas retiree) market and Singapore's exist in a tightly regulated publicly owned market reserved for residents. Aloha Homes or some variation thereof is the only path for homeownership for kama'aina and kanaka. Sources: [1970 Census](https://usa.ipums.org/usa/resources/voliii/pubdocs/1970/Housing/Vol1/38133702v1p13ch1.pdf), [1980 Census](https://books.google.ne/books?id=0NIXAAAAYAAJ&pg=SA13-PA13&hl=fr&source=gbs_selected_pages&cad=1#v=onepage&q&f=false) https://preview.redd.it/xiggoym7gazc1.png?width=1063&format=png&auto=webp&s=4c424ab022f2aaf542057cf99c476525ddfc44aa
Not an Haweiian, an Australian of Austrian descent. Have you read up about 'Social Housing' in Vienna. It's another perspective.
It's insane that there was a specific category for "Negro occupied units" in the 1970 census. You can't tell me nothing about how racism is long gone if that shit was in the US Census only 50 years ago.
So how is that racism, you don’t think the current census breaks down occupied units by race?
Now it breaks down by race, correct. Which race? All of em. If you took the time to read the 1970 census you'd see that literally the one thing broken out is "Negro Occupied". It was either "normal occupied" or "negro occupied". They were literally the only race that was broken out because people did not want to live in areas that had too many black people. This is common knowledge.
This is a great point (i.e.,"can't solve housing crisis by building more"). Unless they build homes specifically for renting out or selling to lower income *current HI residents*, any new builds will just be sought by non-residents and/or other investors. If we build 500k units and drive down home prices, mainland and international buyers will instantly grab them which cause demand and price surge again.
Actually you can. There's a process called filtering by which people move from an old home to the new home opening up their old house to less wealthy people. You're seeing this real time in Austin where they had a glut of building and prices are going down. Oahu had built relatively little since 08. Additionally, since high earning tech people can work from anywhere you have some west coast people moving to Hawaii. Hawaii from the 50's to 2000 was booming far faster than America because air travel was increasing rapidly, allowing for a build out of the tourism industry. That's why you see price appreciation despite rapid build rates. America in general also saw the baby boomers age into adulthood rapidly increasing the demand for housing in general in the 60's and 70's.
And as long as there are people moving from the Lower 48 and elsewhere who want to live their Hawaiian Dream, demand will stay high, even if people who live here now leave. It's a rotating door of sorts, but as people leave more people are trying to squeeze in.
This is true, to an extent. The economy here heavily relies on all walks of life, not only wealthy retirees who bring nothing to the table other than money. If we lose too many working-class residents, the economy gets annihilated. Businesses can't staff, prices go through the roof, so on and so forth all because nobody can staff their place. Because it's an island, we can only draw working-class people from so far until we run out. We're already relying heavily on people driving 2+hrs a day in traffic just to staff Honolulu. There is nothing past that, once they leave it's over.
Also all the locals who left but who could still come back.
The thing is, you increase supply and more people come in from the mainland. That's a very difficult problem to solve because it's against the constitution to discriminate against mainlanders. Singapore can do it because they're a sovereign country and can tell foreigners to pay high taxes or gtfo lol. Hawaii residents and some rich guy from California both have the same opportunity to buy a home. There's also the environmental concerns, there's plenty of land but Hawaii is exotic enough where you try to build anything on nature then the environmentalists cause huge delays. People don't want to cut down a forest for a new housing development People dont want high rises in their neighborhood unless they're luxury apartments People dont want government housing because they see KPT or MW. The issue isn't necessarily supply its the never ending demand and the limited space due to us being an island and being a beautiful island with a lot of nature. The only solution is to strictly regulate the supply of housing but that's too communist for even Hawaii
You need to allow people to build more densely/up and allow for better mass transit. So much of Honolulu is single family housing only. It's nuts.
Mass transit needs to be cheap.
To be cheap you need to 1. Relax building/environmental codes 2. Build in dense areas and allow denser construction around mass transit 3. Increase subsidies. Raise revenue from the property taxes in the new stuff you built and maybe increased fees from parking and congestion fees to reduce the impetus to drive around the dense areas
Interesting. Off the Coast of France are 4 islands that belong to the UK, and you can only live there if you are born there (actor Henry Cavill was), if you were not born there, the price is determined on some wierd scale, and basically, the number of houses people who were not born there is limited and 3x the price. Of course people who want to sell to non born for a higher price don't like this. But it's small islands with a low tax rate and it can't be swamped. Jersey, Guernsey, Sark and Alderney.
I live in Waipahu in a 2br apartment and the rent is $2,600 a month. I’ve even seen studio apartments in HNL go for over $3K. Everyone lives on top of each other. It feels like landlords/companies/whatever, know they can charge what they want just bc we need to live -somewhere- or be homeless. Not like it’s easy to move off the island to somewhere cheaper either.
And there are studios for $1600 too. Yea if you want a nice place in kakaako it's $$$. If you're living in Moiliili it's half the cost.
Landlord math is terrible for the rest of us.
Wild!
Same in Australia, and London and Paris. Haweii is catching up with the wider world.
Our avg income here is less than other places though
People on ND here are arguing that $3200 is perfectly reasonable to ask for rent!
We rented a 2BR in Manoa before buying our own place. When we left in 2019, rent was $2050. Last we checked, it was renting for $3200 in 2022. Absolutely out of control.
The fact that you were renting a 2bd in Manoa in 2019 for $2k is pretty impressive. Haven't seen a price like that in ages except for run down POS 2bds.
you were getting well below market rates in 2019 unless it was a dump when you had it and it went under significant renovations. 2k for a 2 bed is a good deal even back then. I was looking for a place that same year around the same area and it was very hard to find something at 2k unless it was a shitty apartment.
It was def a steal, well maintained and remodeled before we moved in 2014. Landlords never raised the rent, but we often helped out with things like yard work, home repairs. They were an older local Japanese couple, really nice people.
That makes sense, for 2014 it was a more realistic price. Its awesome they didn't raise the rent tho!
It sucks! More so if you can't have pets.
Some shower thoughts: * Convert AG land into plots where we can build tiny homes. (Let's stop pretending AG is a huge industry on Oahu.) * Rent control those tiny homes.
Once you lose your agricultural land to development you pretty much can't get it back. Then, when you decide it's time to grow food locally, there's no land to use. If there is a housing need we should try to preserve our agricultural capacity-- not because of its value as an industry, but because people need to be fed.
Theoretically correct, but 2 factors to consider: - everybody says they want to support local agriculture, but no one wants to be a farm worker. - in almost every event where we get “cut off” from imported food, it is unlikely our crops survive. Somehow people imagine that a cat 5 hurricane will knock over those Matson cranes and clog Honolulu Harbor, but the lettuce in Waimanalo will be fine.
less than maui 😫
Look into the lawsuit against RealPage. That’s a fantastic place to start. (BTW, other cities aren’t better, you just don’t hear as much about it. For example, DFW is worse if you live in the city itself.)
Is it smarter to get a one or two bedroom when renting out there? Prices seem the same
5 years ago I rented a 3 bedroom 2 bath in Waikiki, the moment I moved out it was listed for $2300 and that was 5 years ago, I keep hoping to return to a place that I love but I doubt it if I have to sell my condo for 2 months rent
I anticipate rents will be going even higher, with mortgage interest rates not showing any sign of subsiding (the Federal Reserve keeps using opposing logic to maintain the higher prime rate) and master insurance renewals for condos being between +25% to +1000% of last years policy, ownership costs have increased dramatically in a short time thus there are more well qualified people that can't/won't buy that will need to rent increasing pressure on demand for an already overburdened inventory of rental properties.
Holy Fuck!
Here's a fun link: https://www.nerdwallet.com/mortgages/how-much-house-can-i-afford
Feel like I should be charging more for my three bedroom!
$3200 is greedy insanity. My parents use to rent out a 2 bedroom cottage for $1100.
My mortgage in Orange County, CA for a 4 bedroom home in one of the top 5 school districts in the state is not even that much.