Housing Market

wrxyboy · 10-27-2009, 4:02 PM

So i been in a real search for a home lately and it has really been depressing to see that i cant afford nothing more than a studio or small apartment which is priced ridiculous. I mean 180k for a studio and 275k for a 2 bedroom apartment

. Id like to think that i make decent money (80k a year) for a nice home but with all that has happened with the economy in the past years i cant get financed for anything decent. I will be a first time homeowner and alot of places ask for 10% to 20% down and i just dont have 40k to 80k saved. It is ridiculously hard to stay below 40% below debt to income ratio and that's including the mortgage. I keep reminding myself that is the price you pay to live in Hawaii. So im at a point where i can take over my parents mortgage and live there with them so they can retire and relax or wait out this slump and see if the banks can get a little more loose on lending. Are there programs or anything i should be looking at to get me into a home?

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vas25tl · 10-27-2009, 4:23 PM

FHA loans are 3.5% down....

wrxyboy · 10-27-2009, 4:56 PM

I tried for an FHA loan and they require 18k down and i miss the debt to income ratio by about 3%. This is for a single family home at a price range of 400k. I just dont wanna feel like i havent done everything i could. My only option is to do a 5/1 arm at %3.75 but i dont know much about arms and is it worth it.

thunder04 · 10-27-2009, 5:06 PM

I was always told that an ARM is good only if you plan on selling or if you can re-finance into a fixed rate mortgage before the interest rate starts going up.

However, I'm no expert by any means.

moeronn · 10-27-2009, 5:07 PM

I understand your pain and frustrations. (Un)Fortunately, the days of "free loans" and 100% financing are over, so you will need to save up some cash to put down and for closing costs. In the $400k range, that means saving at least $25k for FHA - plus you still need to have at least 2 months worth of savings. Not an easy thing to do, but it's pretty much the only way now unless your parents feel like gifting you some money.

Also, if you're 3% shy of the DTI ratio, then you also need to slice off some of your debt - which is a good thing anyway.

FWIW, I think this is a good time to get (back) in to the housing market. Actually, in the areas I'm looking, it's about 2 months late, but still good.

Don't get discouraged and don't squeeze yourself into a place you can barely afford, because if something happens (need repairs, etc) you're going to have a tough time. Find something you like that you can reasonably afford.

There is nothing wrong with starting in a condo/apartment. Yes, the HOA fees suck, but it's a start and it's yours.

wrxyboy · 10-27-2009, 5:33 PM

Quote:

Originally Posted by moeronn

I understand your pain and frustrations. (Un)Fortunately, the days of "free loans" and 100% financing are over, so you will need to save up some cash to put down and for closing costs. In the $400k range, that means saving at least $25k for FHA - plus you still need to have at least 2 months worth of savings. Not an easy thing to do, but it's pretty much the only way now unless your parents feel like gifting you some money.

Also, if you're 3% shy of the DTI ratio, then you also need to slice off some of your debt - which is a good thing anyway.

FWIW, I think this is a good time to get (back) in to the housing market. Actually, in the areas I'm looking, it's about 2 months late, but still good.

Don't get discouraged and don't squeeze yourself into a place you can barely afford, because if something happens (need repairs, etc) you're going to have a tough time. Find something you like that you can reasonably afford.

There is nothing wrong with starting in a condo/apartment. Yes, the HOA fees suck, but it's a start and it's yours.

The 3% debt to income ratio is that i have no debt. Just my reacquiring monthly charges that get paid off every month. I did a pre qual with no debt and still miss it. Its not that i dont want a condo/apartment its that i been renting one for past 3 years and i hate not having a garage or the feeling that i cant fix up or do things to the home cause it is not mines. Its just the housing market in Hawaii is ridiculous. I feel that i have a good start on savings but it is still not enough to get a single family home.

litesout · 10-27-2009, 5:33 PM

That ARM may look good now, but what about in 5 years when it adjusts and your payment goes sky high. I think the ARMs are, in large part, responsible for the state of the real estate market today. People were getting homes that there's no way they could afford. When their rates and payments adjusted, they couldn't afford it, and wound up in foreclosure. I would rather rent than have an ARM

litesout · 10-27-2009, 5:36 PM

Quote:

Originally Posted by wrxyboy

The 3% debt to income ratio is that i have no debt. Just my reacquiring monthly charges that get paid off every month. I did a pre qual with no debt and still miss it. Its not that i dont want a condo/apartment its that i been renting one for past 3 years and i hate not having a garage or the feeling that i cant fix up or do things to the home cause it is not mines. Its just the housing market in Hawaii is ridiculous. I feel that i have a good start on savings but it is still not enough to get a single family home.

Okay, missed the fact that you're in Hawaii. I've heard its tough to get started there. Still doesn't change the fact that I'd stay away from that ARM. I can totally understand not wanting to rent anymore. I just bought a house about 6 months ago myself.

When you did your pre qualification, did you go to a bank, or have you tried a mortgage broker?

gr8ness97 · 10-27-2009, 5:37 PM

20% is the threshold for conventional financing in which you dont have to pay for Private Mortgage Insurance (PMI).

I dont know how things are in Hawaii, but in many coast US towns, condos are still losing value and people are having a rough time getting rid of them. Not somewhere I would recommend personally, but maybe someone else with a little more experience could chime in.

wrxyboy · 10-27-2009, 5:44 PM

Quote:

Originally Posted by litesout

Okay, missed the fact that you're in Hawaii. I've heard its tough to get started there. Still doesn't change the fact that I'd stay away from that ARM. I can totally understand not wanting to rent anymore. I just bought a house about 6 months ago myself.

When you did your pre qualification, did you go to a bank, or have you tried a mortgage broker?

It is really hard to get started in hawaii which is why most that live here end up take over there parents homes and renovating them to make them more up to date and bigger. I met with 3 mortgage brokers and 2 banks and all had similar results. 400k is on the low end for single family home too.

Quote:

Originally Posted by gr8ness97

20% is the threshold for conventional financing in which you dont have to pay for Private Mortgage Insurance (PMI).

I dont know how things are in Hawaii, but in many coast US towns, condos are still losing value and people are having a rough time getting rid of them. Not somewhere I would recommend personally, but maybe someone else with a little more experience could chime in.

Im not concerned about the PMI but 20% is just a bare minimum to even get the loan. Good thing about Hawaii is that the housing market never drops all that bad and has a good turnover with increased value on property and not so good on condos and apartments.

BubbaMarkTL · 10-29-2009, 4:14 PM

The housing market is a buyers paradise if you have a shit ton of cash to plunk down. for every other buyer (and ALL sellers) its the worst nightmare in the history of real estate right now.

Values are down and continue to fall

Loans are unobtainable even with good credit

Foreclosures are piling up, further driving prices down

Nothing is selling unless its being given away

The only way to actually sell for most people is to allow it to go to foreclosure and/or short sale as not many people have cash sitting around the THROW IN THE GARBAGE to make up the difference between what you owe and what you are selling it for

moeronn · 10-29-2009, 5:26 PM

^^ Every market is different.

In some areas of SoCal, when things are priced well (and I don't mean dirt cheap, but reasonable) they have been selling in days. We saw one property hit the market on a Friday. We saw it that evening. Waited until Monday to put in an offer and it was already under contract. Had similar things happen with other places.

Of course it really depends on what price range you are in, too. If you're in a "First-Time-Buyer" area, things are moving faster than in "move-up" neighborhoods.

wrxyboy · 10-30-2009, 1:17 PM

The market here is really tough. 400k for a home with about 1300 sq ft of living area and 2200 sq ft property. I even thought about just buying a home in Vegas for 120k just to have as tax write offs and a place to stay when i go there would something for now. i dont know my options are pretty limited right now.

**fsttyms1** · 10-30-2009, 1:33 PM

Quote:

Originally Posted by BubbaMarkTL

The housing market is a buyers paradise if you have a shit ton of cash to plunk down. for every other buyer (and ALL sellers) its the worst nightmare in the history of real estate right now.

Values are down and continue to fall

Loans are unobtainable even with good credit

Foreclosures are piling up, further driving prices down

Nothing is selling unless its being given away

The only way to actually sell for most people is to allow it to go to foreclosure and/or short sale as not many people have cash sitting around the THROW IN THE GARBAGE to make up the difference between what you owe and what you are selling it for

All depends on where you live. Around here its not bad at all. Values are nearing a normal level instead of the inflated value they were thats about the only thing down.

BubbaMarkTL · 10-30-2009, 3:32 PM

the other problem is that the currently unstable real estate market is being artificially inflated by this 8,000 dollar tax credit. once that is over with, who do you think takes the hit for that 8,000 dollars that is now unavailable to the few buyers who exist??? Ill give you a hint, it rhymes with "yeller"

Yes, there is another real estate devaluation hiding just under the surface once this 8,000 dollar tax credit expires....and buyers know they already have the upper hand and THEY certainly arent going to be willing to eat that 8,000 bucks, they will just knock it off of their offers.

wrxyboy · 10-30-2009, 3:51 PM

but you dont get the $8,000 as part of your closing cost or for the part of the sell. It comes in a form as a tax credit or deductible. So i am not to concerned about it cause it is not a up front thing. They extended $8,000 tax credit to spring of 2010 but dropped it to $6500.

surfer rick · 10-30-2009, 4:41 PM

Despite the real estate slump the housing market in our town is still ridiculous. I definitely wouldn't go condo because there certainly seems to be a glut of available units which will drive down pricing to some extent in the future. Look at Kakaako, 909 Kapiolani isn't even half full and Moana Vista may not even be completed. My intern lives in Keola Lai on south street and even though it's a brand new building maintenance fees on a 2 bedroom are $700/month

Imagine what that's going to cost you 10 or 20 years down the line. I definitely love having a home but if you want to live close to town you're going to pay a premium that comes with not being stuck in 2 hour traffic to Ewa Beach.

Did you try HawaiiUSA FCU? They have decent rates. I'm just glad I got my jumbo loan at the end of 2007 or I would have had to put 30% down now that the banks have tightened up their lending standards.

wrxyboy · 10-30-2009, 4:55 PM

i have not tried HawaiiUSA FCU yet due to the fact i tried with BOH and Hawaii State FCU and had the same result. I prefer not to live in town and i been looking in central and leeward areas even Ewa which i dont wont. But it has been real hard to get a home with prices and interest rates as low as they are.

surfer rick · 10-30-2009, 5:08 PM

Yeah mine was through BOH, they had 20% down, 6% fixed 30 years on my loan which was comparable with other banks including ASB. FHB was not that good although my corporate account is with them. How about Mililani? Too far? Windward side rains too much for me.

Don't do an ARM, some peeps I know got jacked after 5 years when the rate adjusted to 10%

wrxyboy · 10-30-2009, 5:19 PM

I like Mililani but prices there are way out of my income range at this moment with the way the banks are lending. Its not that i cant afford to live in Mililani but banks just wont lend based on my debt to income ratio. I lived in Kaneohe for a year and i hated all the rain as well.

surfer rick · 10-30-2009, 6:08 PM

Yea I agree with you there. I give you mad props for trying to secure at home. When I was 27 I was renting an apartment for $700 a month because that's all I could afford as a resident.

wrxyboy · 10-30-2009, 6:45 PM

thank you. Im just fortunate to have found a career that i am happy with right out of high school. Granted your schooling can get you a higher pay. In worst case scenario ill just take over my parents mansion and make there mortgage payments.

5o9 · 11-02-2009, 4:25 PM

Here is the old school:
House price 3x gross annual income.
25% downpayment.
1 year total living expense reserve in liquid assets.
No problems

10-27-2009, 4:23 PM	#2
vas25tl Err? 1996 Acura TL My Garage Trader Rating: (0) Join Date: Nov 2003 Location: Milwaukee Posts: 3,214	FHA loans are 3.5% down.... __________________ 245,XXX and counting

10-27-2009, 4:56 PM	#3
wrxyboy 1st TL-S on air in Trader Rating: (2) Join Date: Dec 2005 Location: Aiea Hawaii Age: 27 Posts: 1,101	I tried for an FHA loan and they require 18k down and i miss the debt to income ratio by about 3%. This is for a single family home at a price range of 400k. I just dont wanna feel like i havent done everything i could. My only option is to do a 5/1 arm at %3.75 but i dont know much about arms and is it worth it. __________________ Four Doors for More Whores

10-27-2009, 5:06 PM	#4
thunder04 2004 Acura TSX My Garage Trader Rating: (0) Join Date: Jul 2007 Location: Tracy, CA Age: 23 Posts: 1,623	I was always told that an ARM is good only if you plan on selling or if you can re-finance into a fixed rate mortgage before the interest rate starts going up. However, I'm no expert by any means. __________________ '04 TSX AT /w Navi, mostly stock. (Now part of the 100k+ miles club!) Need webspace? Ask me!

10-27-2009, 5:07 PM	#5
moeronn is learning to moonwalk i 2004 Acura TL Trader Rating: (0) Join Date: Feb 2004 Location: SoCal Posts: 14,729	I understand your pain and frustrations. (Un)Fortunately, the days of "free loans" and 100% financing are over, so you will need to save up some cash to put down and for closing costs. In the $400k range, that means saving at least $25k for FHA - plus you still need to have at least 2 months worth of savings. Not an easy thing to do, but it's pretty much the only way now unless your parents feel like gifting you some money. Also, if you're 3% shy of the DTI ratio, then you also need to slice off some of your debt - which is a good thing anyway. FWIW, I think this is a good time to get (back) in to the housing market. Actually, in the areas I'm looking, it's about 2 months late, but still good. Don't get discouraged and don't squeeze yourself into a place you can barely afford, because if something happens (need repairs, etc) you're going to have a tough time. Find something you like that you can reasonably afford. There is nothing wrong with starting in a condo/apartment. Yes, the HOA fees suck, but it's a start and it's yours. Last edited by moeronn; 10-27-2009 at 5:11 PM.

10-27-2009, 5:33 PM	#7
litesout Registered User 2008 Acura TSX Trader Rating: (0) Join Date: May 2008 Location: Orlando, FL Age: 31 Posts: 939	That ARM may look good now, but what about in 5 years when it adjusts and your payment goes sky high. I think the ARMs are, in large part, responsible for the state of the real estate market today. People were getting homes that there's no way they could afford. When their rates and payments adjusted, they couldn't afford it, and wound up in foreclosure. I would rather rent than have an ARM __________________ 08 CGP 5AT TSX Switchblade key mod 8th Gen Accord cargo net Tint 35% front, 20% back (Florida legal) And if you understand all that, you spend too much time here.

10-27-2009, 5:37 PM	#9
gr8ness97 @ the beach... Trader Rating: (1) Join Date: Jun 2004 Location: Sodaville (Pensacola) Age: 24 Posts: 1,648	20% is the threshold for conventional financing in which you dont have to pay for Private Mortgage Insurance (PMI). I dont know how things are in Hawaii, but in many coast US towns, condos are still losing value and people are having a rough time getting rid of them. Not somewhere I would recommend personally, but maybe someone else with a little more experience could chime in. __________________ 04 Honda S2000 //89 Plymouth Voyager Turbo 07 Acura TL Type-S 6MT w/ AEM v1 intake, XLR8 Quad Tip Resonated Exhaust, A-spec Kit, Progress RSB, ATLP J-pipe and Test pipe

10-29-2009, 4:14 PM	#11
BubbaMarkTL Registered User Trader Rating: (0) Join Date: Sep 2007 Age: 30 Posts: 359	The housing market is a buyers paradise if you have a shit ton of cash to plunk down. for every other buyer (and ALL sellers) its the worst nightmare in the history of real estate right now. Values are down and continue to fall Loans are unobtainable even with good credit Foreclosures are piling up, further driving prices down Nothing is selling unless its being given away The only way to actually sell for most people is to allow it to go to foreclosure and/or short sale as not many people have cash sitting around the THROW IN THE GARBAGE to make up the difference between what you owe and what you are selling it for

10-29-2009, 5:26 PM	#12
moeronn is learning to moonwalk i 2004 Acura TL Trader Rating: (0) Join Date: Feb 2004 Location: SoCal Posts: 14,729	^^ Every market is different. In some areas of SoCal, when things are priced well (and I don't mean dirt cheap, but reasonable) they have been selling in days. We saw one property hit the market on a Friday. We saw it that evening. Waited until Monday to put in an offer and it was already under contract. Had similar things happen with other places. Of course it really depends on what price range you are in, too. If you're in a "First-Time-Buyer" area, things are moving faster than in "move-up" neighborhoods.

10-30-2009, 1:17 PM	#13
wrxyboy 1st TL-S on air in Trader Rating: (2) Join Date: Dec 2005 Location: Aiea Hawaii Age: 27 Posts: 1,101	The market here is really tough. 400k for a home with about 1300 sq ft of living area and 2200 sq ft property. I even thought about just buying a home in Vegas for 120k just to have as tax write offs and a place to stay when i go there would something for now. i dont know my options are pretty limited right now. __________________ Four Doors for More Whores

10-30-2009, 3:32 PM	#15
BubbaMarkTL Registered User Trader Rating: (0) Join Date: Sep 2007 Age: 30 Posts: 359	the other problem is that the currently unstable real estate market is being artificially inflated by this 8,000 dollar tax credit. once that is over with, who do you think takes the hit for that 8,000 dollars that is now unavailable to the few buyers who exist??? Ill give you a hint, it rhymes with "yeller" Yes, there is another real estate devaluation hiding just under the surface once this 8,000 dollar tax credit expires....and buyers know they already have the upper hand and THEY certainly arent going to be willing to eat that 8,000 bucks, they will just knock it off of their offers.

10-30-2009, 3:51 PM	#16
wrxyboy 1st TL-S on air in Trader Rating: (2) Join Date: Dec 2005 Location: Aiea Hawaii Age: 27 Posts: 1,101	but you dont get the $8,000 as part of your closing cost or for the part of the sell. It comes in a form as a tax credit or deductible. So i am not to concerned about it cause it is not a up front thing. They extended $8,000 tax credit to spring of 2010 but dropped it to $6500. __________________ Four Doors for More Whores

10-30-2009, 4:41 PM	#17
surfer rick Kaskade is spinning Trader Rating: (0) Join Date: Jan 2006 Location: Somewhere in the Pacific Posts: 2,275	Despite the real estate slump the housing market in our town is still ridiculous. I definitely wouldn't go condo because there certainly seems to be a glut of available units which will drive down pricing to some extent in the future. Look at Kakaako, 909 Kapiolani isn't even half full and Moana Vista may not even be completed. My intern lives in Keola Lai on south street and even though it's a brand new building maintenance fees on a 2 bedroom are $700/month Imagine what that's going to cost you 10 or 20 years down the line. I definitely love having a home but if you want to live close to town you're going to pay a premium that comes with not being stuck in 2 hour traffic to Ewa Beach. Did you try HawaiiUSA FCU? They have decent rates. I'm just glad I got my jumbo loan at the end of 2007 or I would have had to put 30% down now that the banks have tightened up their lending standards. __________________ 2007 Carrera S /Meteor Grey /19" Classic Wheels /Adaptive Sports Seats/ Aluminum Door Finishers and Rear Cnt Cnsl/ Stainless Steel Exhaust Pipes/ Bose 2003 Honda Element Ex

10-30-2009, 4:55 PM	#18
wrxyboy 1st TL-S on air in Trader Rating: (2) Join Date: Dec 2005 Location: Aiea Hawaii Age: 27 Posts: 1,101	i have not tried HawaiiUSA FCU yet due to the fact i tried with BOH and Hawaii State FCU and had the same result. I prefer not to live in town and i been looking in central and leeward areas even Ewa which i dont wont. But it has been real hard to get a home with prices and interest rates as low as they are. __________________ Four Doors for More Whores

10-30-2009, 5:08 PM	#19
surfer rick Kaskade is spinning Trader Rating: (0) Join Date: Jan 2006 Location: Somewhere in the Pacific Posts: 2,275	Yeah mine was through BOH, they had 20% down, 6% fixed 30 years on my loan which was comparable with other banks including ASB. FHB was not that good although my corporate account is with them. How about Mililani? Too far? Windward side rains too much for me. Don't do an ARM, some peeps I know got jacked after 5 years when the rate adjusted to 10% __________________ 2007 Carrera S /Meteor Grey /19" Classic Wheels /Adaptive Sports Seats/ Aluminum Door Finishers and Rear Cnt Cnsl/ Stainless Steel Exhaust Pipes/ Bose 2003 Honda Element Ex

10-30-2009, 5:19 PM	#20
wrxyboy 1st TL-S on air in Trader Rating: (2) Join Date: Dec 2005 Location: Aiea Hawaii Age: 27 Posts: 1,101	I like Mililani but prices there are way out of my income range at this moment with the way the banks are lending. Its not that i cant afford to live in Mililani but banks just wont lend based on my debt to income ratio. I lived in Kaneohe for a year and i hated all the rain as well. __________________ Four Doors for More Whores

10-30-2009, 6:08 PM	#21
surfer rick Kaskade is spinning Trader Rating: (0) Join Date: Jan 2006 Location: Somewhere in the Pacific Posts: 2,275	Yea I agree with you there. I give you mad props for trying to secure at home. When I was 27 I was renting an apartment for $700 a month because that's all I could afford as a resident. __________________ 2007 Carrera S /Meteor Grey /19" Classic Wheels /Adaptive Sports Seats/ Aluminum Door Finishers and Rear Cnt Cnsl/ Stainless Steel Exhaust Pipes/ Bose 2003 Honda Element Ex

10-30-2009, 6:45 PM	#22
wrxyboy 1st TL-S on air in Trader Rating: (2) Join Date: Dec 2005 Location: Aiea Hawaii Age: 27 Posts: 1,101	thank you. Im just fortunate to have found a career that i am happy with right out of high school. Granted your schooling can get you a higher pay. In worst case scenario ill just take over my parents mansion and make there mortgage payments. __________________ Four Doors for More Whores

11-02-2009, 4:25 PM	#23
5o9 '05 TSX 6MT Trader Rating: (0) Join Date: Mar 2006 Posts: 497	Here is the old school: House price 3x gross annual income. 25% downpayment. 1 year total living expense reserve in liquid assets. No problems __________________ '05 TSX 6MT