Hawaii Investor's Strategy Pays Off

In a recent letter published by the Honolulu Star-Bulletin, a California-based investor outlines the factors he considered in purchasing an Oahu home in 2000 that has since appreciated by approximately 120 percent.  Shortly thereafter, he used the same strategy in buying a Big Island home that has increased by 60 percent:

Spike in Hawaii housing prices was predictable, will continue

I bought my home in Kailua in 2000, anticipating that this was going to happen. It took four trips to find something reasonable.

Three major factors are all coming together at the same time here in Hawaii. First, interest rates dropped from 8.5 percent to a record low of 5 percent, and people ultimately buy on monthly payments, not on price. Two, the baby boomers are using this as an opportunity to get out of the rat race in mainland cites, either by refinancing or selling their homes that they live in. Three, the economy in Hawaii has corrected, and then some.

All three of these impending and foreseeable circumstances led me to fly to Hawaii four times from 1998 to 2000, to purchase a home on Oahu, and on the Big Island as my future retirement home. This is just the beginning. There are 75 million baby boomers ready to retire, and looking to leave places like Los Angeles and other cities that have demographic problems with infrastructure, housing costs, traffic, etc.

I love Hawaii and everything about it. The challenges are there, to be sure. We just have to remember who we are and help each other whenever possible.

The Legislature also has to perform and think "outside the box," and that is a really tough thing to do. I give them a lot of credit for their efforts so far! Aloha.

Gary Castner
Los Angeles

8:15:45 PM