Greetings!
Why are mortgage rates so low? A 30 year fixed mortgage rate at 4.5% was unthinkable 10 years ago and even today seems too good to be true. Learn more about why they're so low and how you can take advantage of it. Contact us for more information and questions. |
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July 2010 Real Estate Update |
 Strong sales continued in Oahu's residential real estate market in June according to resale figures released by the Honolulu Board of REALTORS®.
During June, sales of 285 single-family homes and 396 condominiums were reported, increases of 8.4% and 38.0%, respectively, from June 2009. The median price paid for island properties in the June was $575,000 for single-family homes and $300,000 for condominiums, an increase of 0.9% for single-family homes and a decrease of 3.2% for condos, compared to the same month last year.
According to the Days on Market indicator, sales also closed faster in June with single-family homes listing for 32 days, down from 48 days, and condominiums down to 31 days from 47.
"The June statistics show that Honolulu's real estate market continues to recover," said Brian Benton, President of the Honolulu Board of REALTORS®. "Median prices for both single-family homes and condominiums are higher than this time last year, and pending sales for single-family homes are also up and should be reflected in the sales numbers over the next couple of months."
For market statistics and information click here.
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Why Are Mortgage Rates So Low?
|  30 year mortgage rates on average are at 4.56% as of yesterday which is as low as rates have been since a Freddie Mac survey in 1971. Why so low?
There are three primary reasons we are enjoying such low mortgage rates and it involves global investors and consumers:
- Several nations in Europe are experiencing debt problems and investors are flocking to safe-haven investments such as U.S. debt. Having more investors purchasing Treasury bonds puts downward pressure on the Treasury rate. This is one reason Treasury rates have declined significantly. The connection: 30-year mortgage rates trend in the same direction as 10-year Treasury bond rates.
- Consumer confidence low. There are renewed concerns over the health of the U.S. Economy. The national unemployment rate is still at 9.5% (14.6 million unemployed persons) and job growth has slowed compared with earlier this year.
- Mortgage applications have declined, which means that investors who want to purchase Agency bonds (mortgages) from Fannie and Freddie are competing for a limited supply. The reason for the decline in mortgage applications is a decrease in new home purchases. If you've taken a cut in pay or don't anticipate a raise in personal
income, then you're thinking twice about carrying a mortgage. Also, homeowners whose property values have declined are sometimes unable to refinance at these lower rates because the lender may require more equity in their homes.
How does this affect you? If you are in a fortunate position that you can purchase a home or are able to refinance, you might be borrowing at the lowest interest rate in 40 years. |
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Mortgage Credit Certificate
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Great news! The State
of Hawaii recently announced the release of an additional $12 million in MCC
funds for 2010!
Authorized by congress in 1984 and issued locally by the Hawaii
Housing Finance & Development
Corporation (HHFDC), the M.C.C. or
"Mortgage Credit Certificate" is a valuable tax credit that allows qualified
First-Time Homebuyers the opportunity to greatly reduce the amount of federal
taxes they pay, typically increasing annual tax returns and helping many
qualify for their mortgage loans.
According to the HHFDC's M.C.C. pamphlet,
"The
federal government allows each homeowner to claim an itemized federal income
tax deduction for the amount of interest paid each year on a mortgage
loan.
For a
homeowner with a MCC, this benefit is even better: 20% of your annual
mortgage-interest will be a direct federal tax credit, resulting in a
dollar-for-dollar reduction of your annual federal income tax liability. The remaining 80% of your annual mortgage
interest will continue to qualify as an itemized tax deduction.
The
amount of your credit depends on the amount of interest you pay on your
mortgage loan. However, the amount of
your mortgage credit cannot exceed the amount of your annual federal income tax
liability. Unused mortgage credit can be
carried forward three years to offset future income tax liability."
Here
are some quick highlights on who's eligible: -
First-Time Homebuyer's only (Cannot have owned any property
in the last 3 years)
- Primary Residences only
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Income restrictions and Purchase limits apply.
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Credit can only be applied for at time of mortgage
application
Lastly, each of Hawaii's counties has different income and
purchase limit restrictions. Here are
Oahu's limits for 2010:
MCC - 2010 Income & Purchase Limits
Honolulu Income Limits:
Families 2
or less: $95,160
Families 3 or more: $111,020
Honolulu Purchase Limit:
$770,631
For more details or more info on
how to apply call or email Jason Taira at anytime.
Jason Taira
Senior Loan
Officer
Honolulu
HomeLoans
745 Fort Street
Suite 1001
Honolulu, HI
96813
Mobile: (808) 294-5387 |
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Mufi to Raise Property Taxes |  Mayor Mufi Hannemann gave final approval to the
city's $1.8 billion operating budget that is balanced in part on a
property tax rate increase for landlords and others who own homes they
do not live in.
The "non-homeowner" tax class was among
the more contentious proposals in the budget. The rate for the new class
was set at $3.58 per $1,000 of property value, 16 cents higher than the
standard owner-occupant homeowner class rate.
Administration officials said the new class was
needed to help balance the budget and go after a category of property
owners -- speculators and investors -- many of whom do not live in
Hawaii.
Hannemann contends that because property values
across the state have decreased by 7.8 %, the average property
owner would see a lower tax bill regardless of which class they fall
into. "People need to focus on the tax bill, not the tax
rate," Hannemann said.
Three City Council members, Ikaika Anderson, Romy
Cachola and Ann Kobayashi, opposed the separate rate, arguing it could
unfairly hit some owners who have a second property they rent to family
members.
Others argued that in areas where property values
have not decreased, the higher rate would lead to higher tax bills that
simply would be passed on to renters who could least afford it. "We're asking non-owner occupants, i.e. renters, to
pick up a bigger burden of the decline in property values," said Lowell
Kalapa, executive director of the Tax Foundation of Hawaii, a nonprofit
policy analysis group.
The separate rate might be short-lived, as Council
members already have advanced a proposal to do away with the
distinction for the next budget cycle.*
For here for information on how to appeal your real property tax.
*From the Honolulu Star-Advertiser June 25th Article
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In this market there are many questions regarding changes in lending programs, tax incentives, and distressed properties. It's one thing to read about them in the news, but another to find out how these issues personally affect you. I'll be glad to have a complimentary consultation where we can discuss your current real estate needs.
As always, thank you for your support and graciously referring me to your friends and family.
Sincerely,
Brandon |
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Ideal location- minutes walk to Ala Moana Shopping Center, Waikiki beach, and a wide variety of restaurants and shops. Perfect vacation or investment unit. Spacious
lanai and open floor plan. Priced low to add your personal touch. |
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New Projects Update | |
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Pensacola Chelsea- This attractively designed 5-story offers 46 one-bedroom residences that range from 570 to 661 SF with generous lanais ranging from 187 to 400 SF. Every residence is enhanced by attractive finishes,
cabinets with Shaker detailing, spacious oversized lanais and private
covered parking. If you are interested, they currently are taking non binding reservations.
Kealakai at Kapolei- The Grand Opening was on June 13, 2010.
18 brand-new 2-story buildings will house 140 fee-simple town
homes. Choose from 1 to 3- bedroom floor plans in 3 stylish
designs with
up to 911 SF of living space. Each is generously equipped with a wide
range of amenities, including features like air-conditioning,
built-in kitchen
appliances, and cultured marble bathroom countertops.
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