Aloha, folks. I just read last week in this article that our beautiful state of Hawaii has the 3rd lowest home ownership rate in the entire nation. A just 57.7%, we are only ahead of California and New York. With a median single family home price of $517,600 (according to their stats at the time, but let’s go with it) at the top of the list, it’s no surprise that home ownership in the Aloha State is so low. After all, most folks aren’t sitting on half a million bucks cash to buy a home.
But what about the low mortgage rates? Shouldn’t that increase buying ability? After all, we’re still around 4%. Everyone last year who said it would never get that low again? Sorry – they’re still hovering around the bottom of the deep end. Unfortunately, for Hawaii’s most famous persona (that would be the President, although you’d be forgiven for guessing Shane Victorino), a year of stimulus programs have failed to fuel the other side of the equation when it comes to affordability: jobs and income. After all, if a mortgage is low but you still can’t qualify, then it doesn’t really matter how low a rate you can get.
At the other end of the list, West Virginia tops the nation with a 73.4% ownership ratio. I’m sure the median price of $94,500 has a lot to do with it. And while it is an absolutely beautiful state (I used to snowboard Snowshoe, hike Dolly Sods, raft the Upper Gauley and climb Seneca Rocks on weekends when I lived in DC), it’s not quite the tourist destination of Hawaii. Not too many trips to West Virginia are being given out on Wheel of Fortune (yes, it’s still on).
So what has to give for Hawaii howe ownership to increase? Either lower prices or greater income/purchasing power, if you want to get really general about it. I don’t see the former happening. The only way prices would come down significantly enough to make a dent, as I see it, is if the banks release their shadow inventory at a faster rate than they are now, and it doesn’t appear like that’s going to happen. So by default that has us looking at increasing jobs and income and there might actually be some hope there. Comparatively, Hawaii’s unemployment rate is low. Might we see an uptick in purchasing power as we roll into 2012? Maybe, although you don’t have to look too hard to find a bevy of negative economic forecasts for the coming year. Hey, they could be right, too
Is there another way to get your foot in the door? You might try talking to a local real estate investor or wholesaler who specializes in lease options or other kinds of rent-to-own purchases. For some people, it’s a fantastic way to start on the path to ownership if they can’t qualify for a traditional mortgage but might be able to do so in the near future. Something to consider.
Anyway, I just found that top ten list interesting and wanted to throw it out there for people to chew on. I just wrote this post to brainstorm some ideas. I’m really curious as to what others feel about the current state of home ownership in Hawaii. Maybe my thoughts are completely off base and you have a much better read on things – if so, share it here!