Sunday, November 26, 2006

Rental market cooling on O'ahu

The same day the Advertiser reports on the shifting housing market, it reports that the average rise in rental rates this year is the smallest in six years:
Average asking rent for available housing, including single-family houses, townhouses and apartments, is up 2 percent to $1,661 from $1,628 last year, according to the report by local market researcher Ricky Cassiday.

For renters, it's a big improvement over the previous four years, when average asking rents jumped 10 percent to 18 percent per year.
I wouldn't call it a renter's market just yet, but our rent didn't increase at all when we resigned in August. Right now we're paying $1750/month for a 3 bedroom condo that would be $500k in today's market. We're sitting tight and investing the difference between our rent and our potential mortgage payment (15 year $400k mortgage at 5.75% is $3300/month). Once prices hit 2002 levels, we'll be back in the market!

Incentives increase as market slows in Hawaii

The Advertiser reports that builders are offering incentives to buyers now that the market is shifting:

To be sure, many new home projects are not luring buyers with freebies, but to see incentives emerging at a few projects underscores the shift under way in the local real estate market that in the last few years had developers turning away buyers.

The number of new-home sales this year is still up because of several high-rise condominiums that are nearing completion.

But weaker demand is evident in O'ahu's resale market, where sales of previously owned homes fell 17 percent in the first 10 months of the year compared with the same period last year.
We're going to start seeing a lot more incentives as the market continues to slow. Probably not any trips to Hawaii, though!