Years after the last housing boom, Hawaiians are still paying too much for rent. However, things are starting to change and the slowed real estate market is encouraging landlords to decrease their rents. Indeed, for the first time in more than a decade, property managers and landlords are looking for new ways to fill vacancies which could mean anything from free parking to lower rents for tenants.
Even urban properties throughout Hawaii are seeing lower rents encouraging suburban and rural renters to make the move to the city; a move they couldn’t afford in the past. Without question, we’re seeing more of a renters market throughout Hawaii and this is giving more power to the tenants. They’re in a position to ask for lower rents or property improvements for the first time in a very long time.
Landlords have been suffering from very long waits to fill vacancies which is why many are lowering rents by as much as $100 or more in order to fill the vacancy or to encourage current tenants to stay. Whereas many renters in the past expected to pay as much as $1,025 for a studio, many one-bedroom apartments are available for as low as $800 in some places.
Indeed, many renters are looking for lower monthly payments so they can start saving for a mortgage or other big purchase. And landlord urgency to fill apartments is only helping renters secure better deals. Many stories are floating around about people who are looking to move in a month or two only to have property managers request that they move in sooner.
There are so many rental properties available right now that it’s hard to imagine anybody not finding a place that suits their budget. Yet Hawaii’s rental market is much stronger than those on the Mainland. Some properties that have fallen victim to the housing collapse remain empty for months at a time. Landlords are resorting to gimmicks and other offers to attract renters. You can expect anything from slashed rental rates to free gift cards and even major renovations.
Unfortunately, this renters market is ameliorated by the economic situation faced by many potential renters. They are often facing difficult times as employment figures continue to drop and companies cut salaries and hours. As such, lower housing costs aren’t making a major difference in their economic picture. In fact, much of the reason for increased vacancies is the fact that many renters cannot afford to go it alone anymore. This means renters are downsizing or doubling up to share the cost of living and as a result there is an increase in the number of vacancies.
At the moment, experts are predicting further decline in rental prices throughout the United States. High unemployment and little hope for economic recovery suggest that rents will stagnate well into 2010 and further drops have not been ruled out. The average asking price for apartment rentals fell 12 per cent in 2009 while the asking rent for homes dropped 4.7 per cent and townhouses fell about 2.7 per cent.
Still, let’s keep these rental prices in perspective. Despite lowering costs, Hawaii is still one of the most expensive states in which to rent and we’re in desperate need of affordable housing. The average rent in Hawaii was actually the highest in the country and more than half of renters spend more than 30 per cent of their income on housing. Surprisingly, more than 40 per cent of Hawaiian residents are renters and as such they are welcoming the news of lower rents.
Declining rents are a definite boon for renters and low-income families. Some renters even have the opportunity to negotiate cheaper rents which has been unheard of in the last couple of years. And more importantly, landlords are willing to drop their rents. Unfortunately, many o f these negotiations are the result of less income for the renters – lost jobs, cut wages, or fewer hours have made economic responsibilities harder to meet and the only option for many is to cut living costs.
For the first time, Hawaii tenants are in a highly favorable bargaining position. New appliances, upgrades, carpeting, and other renovations are a few of the perks to this troublesome housing market. Landlords don’t want to lose tenants so are willing to make some compromises that they might not have been willing to make in the previous housing market.
But these lower rents don’t equate to more affordable housing. Policy makers and local councils need to be aware of the lack of affordable housing for low- and middle-income families and these drops in rent are not being seen by people in these income groups. So although rental prices are dropping, this is not affecting the neediest people in Hawaii and the government still needs to work toward providing affordable options.
Photo Credit: jessicafm
Posted in Hawaii Real Estate, Hawaii Tourism | 3 Comments »
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As chosen by Conde Nast Traveler, Maui was named the Best Island in the World for the 12th straight year and the 15th time overall. Indeed, not only was Maui chosen as the best island but also the Top Travel Destination by voters at Conde Nast Travel. Obviously Maui offers a wealth of natural beauty including stunning beaches with pristine waters, volcanic peaks reaching to clear blue skies, and deeply cut valleys that caress windswept shorelines. These diverse landscapes in combination with the dynamic Maui communities which feature award winning restaurants, first-rate shopping, luxury accommodations, and world-class golf resorts surely constitute the main factors in selecting Maui as the world’s best island.
From an economic perspective, such recognition is certainly a boost for Maui residents. With the real estate market facing difficult times and jobs numbers in disarray, the award not only acknowledges the outstanding efforts of Maui’s visitor industry to offer nothing but the best to island guests but should also serve as an economic motivator to help preserve and sustain the island’s tourism sector. Of course, Maui is generally considered the perennial favorite for this award but winning for the 12th consecutive year was not considered a given. The Pacific Ocean is home to most of the world’s most naturally spectacular islands and competition for the World’s Best Island was considerable.
Similarly, for the first time, several Maui resorts held the top positions in the “Top Hawaii Resorts” category. In fact, four of the top five Hawaii resorts; the Four Seasons Resort Maui at Wailea (ranked 1st), the Four Seasons at Lana’i, the Lodge at Koele (ranked 3rd), Hotel Hana-Maui and Honua Spa (ranked 4th), and the Four Seasons at Lana’I, the Manele Bay (ranked 5th); were all located in the Maui region.
These awards position Maui as the premier world island destination. Not only is Maui the top island choice among the Pacific Islands but also stands head and shoulders above similar travel spots around the world.
Photo Credit: Chris Taleye
Posted in Hawaii Tourism, Maui Real Estate | 1 Comment »
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- Oct
- 16
Kihei Real Estate
Although historically known for its dry, hot days, Kihei is a Maui community located southwest of Haleakala on the coast. The traditional Hawaiian name for the region highlights its more barren aspects but despite dusty days and less than 13 inches of annual rainfall, Kihei has much more to offer than one might expect. In the early 20th century, a small settlement of around 350 came to Kihei in order to establish a sugar plantation, an effort met with little success. No paved roads and little economic potential meant that Kihei remained relatively uninhabited until the 1960s when plumbing finally reached the community. Before then there were a few beach plots but generally speaking Kihei property was cheap and few ventured to the area. With water came developers and the chance to attract the tourist dollar. During the 1970s the development plan in Kihei was muddled at best and condominium units sprang up along with shopping centers and strip malls.
Despite the lack of planning, these shopping locations were the first draw to modern tourists. The opportunity to purchase inexpensive goods and find cheap accommodation brought the first flood of tourism to the community. At the moment, Kihei maintains its 70s appeal and with a collection of condos, rentals, timeshares, and small hotels, the community has become a thriving beach town. Still, aside from tourism, the region represents a great place to live. Because of the tourism draw, Kihei has developed an infrastructure that supports a diverse community. In addition, as the town is surrounded by beaches it is the ideal location for individuals looking for vacation or retirement homes. Shops, restaurants, schools, and other facilities make this a small but flourishing ocean-side community.
Indeed, the beaches are the central draw for tourists and residents alike. Several beaches stretch out from either side of the town and because of the quaintness of Kihei you’ll find that the beaches are much more sparsely populated than other Maui beaches. Take the Kalama Beach Park as an example of the natural beauty of Kihei. Well-maintained lawns shaded by palm trees and 36 acres of oceanfront land make Kalama Beach Park the community’s focal point. Musical festivals, craft fairs, and family events are regularly held in the park. As you can see, Kihei is a tight-knit community that is ideal for anybody who loves the ocean.
Real estate development in the region is also starting to boom. As a community with a bit to offer any appetite it’s no wonder home buyers and real estate investors alike are turning their attention to Kihei. Nature lovers are drawn to the beautiful parks, beaches, wildlife conservations, and premium diving opportunities. Shoppers will love the strip malls and shopping centers. Boating aficionados will enjoy fishing expeditions, snorkelling trips, and whale watching excursions. Indeed, anybody who loves sport and the outdoors will be happy to learn that Kihei offers world class golf, surf, fishing, and wildlife sightings. All together the activities, sunshine, and amenities in Kihei make it a great place to call home. Plus, as Kihei is still a relatively isolated community, home buyers will find some of the best deals in Maui.
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With the economic troubles that have plagued the nation lately, people are being more frugal and spending less. This means that many families and individuals are cutting back on luxuries and extras such as vacations. For a tourism hub like Hawaii, that’s definitely not good news. While economists have previously predicted a downturn for Hawaii’s visitor industry, the University of Hawaii Economic Research Organization now estimates that it will take a number of years before visitor numbers return to their past high levels.
This forecast has resulted from a combination of a loss of interisland cruise ships as well as significantly reduced consumer spending across the country. While the impact of this downturn is expected to result in only a modest decline of total jobs on Oahu, areas such as Maui County which are more dependent on the tourism industry will likely experience a greater negative effect. For instance, economists are expecting a 6 per cent decrease in jobs in the service and lodging industries in both Maui County and Kauai County. The Maui construction industry is also expected to be one of the most negatively affected sectors. Overall, Maui County is expected to experience total job losses of 4.4 per cent.
Of course, there are other factors which could influence the above economical predictions. Most notably, the impact that the swine flu will have on Hawaii’s tourism industry remains uncertain. Past experience with the SARS virus has shown that an epidemic in Asia can have a significant effect on Hawaii. However, economists say that it is still too early to determine exactly what impact the swine flu will have on Hawaiian tourism and economics.
Despite all of the bad news, however, there is still reason for hope. Certain sectors of the Hawaiian economy, such as health care and social assistance, are still expanding. Also, while it’s believed that visitor numbers will take several years to fully recover, the downturn is expected to stabilize before the end of the year. This means that it may not be too long before we start to see the situation beginning to move back in the right direction.
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