Maui Real Estate Radio Show 1

Show 1: Mortgage vs. Rent

(Click the play button below.)

Transcription:

The following is a paid program and does not necessarily reflect the opinions of the staff or management of Visionary Related Entertainment.

CH: This is Clint Hansen with Maui Luxury Real Estate, The Hansen Ohana, with MauiRealEstate.net. You're joining us on ONE 1110AM, KAOI 98.7 FM, 96.7FM. Today we have special guest, Byron Yap, with American Savings Bank here to talk to us a little about new loan programs, the current interest rates, and how home ownership is something that's attainable for you. In addition to that, we'll be going over some upcoming events, some new featured listings, as well as the new statistic release that came earlier this month.

Starting with that, let's talk to Byron Yap a little bit about some of the loan programs that are now available for fist time home buyers. And, actually, you know I've bumped into a lot of people who've recently been purchasing, and I've had a couple of my listings purchased, as a result of the new county lottery release. Have you had much experience with that or any of your buyers?
BY: Yes, the county did a program where they were giving a grant away this year. And they have a lottery system. And the county started issuing the money at the beginning of this year and there's been quite a few successful stories with the county assisting first time buyers purchasing their homes for the first time. So, it's been a great program to see and I hope the county continues to advance it, grow it, bring more on, because that's what's needed in the County of Maui. 
CH: A lot of those funds come from some of the development donors. Right? I mean it's a general fund that they come into and when they created this program, it was to incentivize first time home buyers. Because that initial first three percent, one percent is a big hurdle to overcome with Maui's high real estate prices. So, it's good to see that a lot of long-time families and Maui residents are finally having the opportunity to own a slice of Maui - which is often, you know, outstretched, given the high property prices here in Maui. Of course, there's definitely been a few hurdles to overcome. Again, I haven't repped any particular buyers, but I've been on the seller's side, and it's a little new territory going through and working with the county and getting the release, but has there been any major hiccups that you've noticed? Just longer delays or just getting used to the new process?
BY: With the county program, it's a really good program because what we have found out is that it usually takes about a week to two weeks to issue the money for the purchase. So, though there hasn't been any major delays or nothing you'd expect from a county level grant kind of system. We're seeing it pretty successful and I think the biggest challenge is happening right now is for some of the grant peoples to find out, find property that is available for them within their price range. I think that's the biggest hurdle we're seeing now. 
CH: Yeah, in that beginner price range, that ranges anywhere from 550,000 - actually, all the way up to 750,000. It's a pretty tight market out there. There's actually not that much inventory at that price point. So, it can be a bit of a competition. And then when there's a new influx as a result, there tends to be more demand and then even less available inventory. So, it's getting a little bit of a feeding frenzy in that lower price point, but at the same time it's been a wonderful opportunity for people. That being said, there's also a pretty limited allotment. What was it - like 30 people or something like that? 
BY: I can't remember the exact number. But they had a total of about 45 days, I think, once they got accepted, to choose a property. And that's been the challenge - that finding property in that price range in that short amount of time.  
CH: And all those people at once, too.
BY: Yes.
CH: The other thing I was wondering and actually want to talk to you about, and I guess it really does depend on a bank-to-bank scenario. But, a lot of times, let's say you're getting gift money from family or something along those lines, they're often asking for that money to be seasoned. And I was wondering, when it comes to that initial grant from the county, have you had any of those issues, or how exactly does the bank recognize this incoming cash?
BY: Well, the grant is basically almost like a second mortgage. It stays with the property as long as they own it.  And it's only paid back if they refinance and take out cash when they sell the property. So, it's easily, for the first-time buyer, there is no seasoning requirements or anything like that. It comes directly from the county, and that's recorded on the title. So, anytime any kind of transaction happens, that grant could be potentially due and payable if they sell or cash out of the property for a refinance. 
CH: Beautiful. So, it's not a gift, because nothing given is earned. It's actually something that they actually put as a lein onto the property. That repayment process follows the property indefinitely and it's not like they can pull that out of the piggy bank when the value of the property increases. I like that. That's fantastic.

But, besides that, most people are not going to be able to qualify or get a grant. Do you have some other loan programs that you think are pertinent to first-time home buyers? Some low amount down, things of that nature?
BY: Well, American Savings Bank does offer the promo that we have been having for the last year. It's basically a promo for first-time buyers that allows us as a bank to give them credit if they open a checking account and they put the new mortgage on autopay. We do have a credit of half a point to first-time buyers. And for seasoned buyers who own property already, we do have a quarter point. So, we're trying to help assist first-time buyers and people that already own. So, it's kind of an array of things that we cover at our bank. 
CH: All right. So, continuing on from there, if anybody has the fortunate ability to put 20% down, the rates drop dramatically. Of course, that depends on the price range that you're going to be coming into. But, one of the reasons I strongly recommend Byron Yap is because he has some of the most competitive rates that I've seen around. Obviously, you should definitely talk to them in person, because it really depends on a whole variety of what your debt ratios are, what your current economic status is, how long you've had your job, you know, spousal support, things of that nature. So, you definitely want to talk to them directly. And this doesn't have to mean you're looking for a home today. It doesn't even mean tomorrow. It can actually be - you want to look for a home for next year and making a decision to buy a home isn't something that, "Oh, let's go start looking tomorrow." This is a process that takes years to unfold. So, make sure that when you go out, the very first thing that you should do is not just talk to an agent. You should actually be talking to a lender. Certainly, if you want recommendations, there's a whole variety of people that we can recommend. Byron Yap is definitely one of my favorites.

Beyond that, I was wondering about the next level of property ownership. I've had a couple of larger loans go through you and you've had great jumbo rates. Do you want to define a little bit what a jumbo rate is - in terms of the amount of money down? And some of the rates you've been seeing. Obviously, these are just scenarios and the rate itself depends on a number of factors.  
BY: Yes, American Savings Bank does offer a jumbo program. And a jumbo loan is basically anything that has a loan amount over 726,525. So, with that basically with the jumbo program, it's a bank-owned program that we keep the loan as American Savings Bank. We fund it. Different financing scenarios would be, depends on the ownership level of it. Some investor programs may require a 30% down, owner-occupant may require a 20% down. Jumbo rates right now, ballpark area is somewhere around 4% for a 30-year fixed mortgage. And, there again, it is dependent upon the property. 
CH: 4%? That's like almost free money. I'm always astonished how low our current rates are. I mean, we had a little spike recently, but it seems to be coming back down given our current economic concerns. How have you been hearing what the rates are going to be doing, because it's always a threat that it might be increasing. And we've seen it rise and fall. But, the recent drop - have you had it come in? Because I've noticed the jumbo rate, given that it's typically less risky, is lower than the first-time home buyer rate. More money down, less risk for the bank. And it's a risk-reward basis.
BY: So, at the beginning of the year, conforming rates, that's loan amount anything under 726,525 were running about 4.625% in that ballpark area. Since the feds announced that they probably would not be raising interest rates throughout the year of 2019, we saw those rates now come down to around the level of 4 and a quarter, 4 and an eighth percent. There again, it's dependent upon the buyer's profile, the credits, a number of things. But we've definitely seen the rates move downward. And they've stayed steady in that area, too.
CH: All right. So, one of the things - I wanted to kind of digress a little bit back to the fist-time home buyer or the more affordable economic purchases. And a couple of homes that I've been selling recently in the Maui, Lahaina, and Wailuku area, and, you know, tends to be a little more of the workforce community, even though I recently read it's one of the strongest locations in the nation for second homes. Unfortunately, that means more competition for our local buyers, but it does help the people who own there get top value for their home. I recently listed a number of properties in The Legends all around that $725,000 price point. And these are all just kind of estimated numbers here, so you definitely want to talk to a lender about the specifics. And just to follow up on that, I'm actually creating a video and by the time that this lands I'll be launching an informative video, more graphical and step-by-step process of these homes. And the difference between renting and owning. One of the things to note, of course, is when you're purchasing a property it's different than when you rent. Rent is something kind of just a loss. That money goes away. It's not a savings, it's not a write-off. Obviously, there's some additional expenses associated with ownership that goes beyond just rent. But, at the same time, a lot of people don't realize that, when that money's going out, you're paying down a mortgage. It's like saving for the future. And it's usually one of the best investments that any single person makes in their life. It's purchasing a home in Hawaii. And one of the best things about buying and owning in Hawaii is you're starting at the top of the heap. So, when it comes to later in life and you're looking to trade down, maybe purchase somewhere on the mainland, you're buying in a market that's much, much less competitive. Because we all know Maui No Kai Oi, it's the best place. There's its pluses and minuses to the cost of paradise. But that being said, it does set you up in the future to buy a home outright cash, by comparison. If, of course, you've owned the property for a number of years, build up the equity, a lot of factors come into play, of course, with the current values.  But that being said, let's say you're purchasing a property like my 72 Papahi. That one went pending, after about five days on the market, I got multiple offers. And I am allowed to say, and I have gotten written permission from the seller a full price back up offer. That one's actually due to close here on the 16th real soon. So, I'm excited about that. If somebody was to hypothetically put 3% down, which is much more probable purchase, it's about 21,750 - if it was that middle of the road 725,000 price range.  A payment, after fees and insurance, it's going to be about 3950. So, that's a larger amount, you know, close to $4,000. But, if you're going to be comparing that to renting, this same exact home, it's going to be about 3800. 72 Papahi is the most desirable floor plan in The Legends. I actually sold three in the last three months. I've been fortunate enough to pick up. It's been luck, I swear. And, that floor plan has the master downstairs and three additional bedrooms upstairs. It is 1900 square feet - the largest floor plan that they have in The Legends. And for rentability, Pali Kai Realty quoted me at about $3800 a month. So, that's only a disparity, not including taxes and maintenance, of about $150 more. And that's for a relatively low, you know, $22,000 down.  Both 72 Papahi and my new listing at 44 Makahehi - that property - both 72 and 44, have solar - photovoltaic and monier tile roof. Photovoltaic being the best part, because your monthly fees, electricity, is outrageous here in Hawaii. Again, that cost of paradise. They're shipping the fuel out, and that's going to really cut back on your monthly bills. And if, just from a rental perspective, if you're going to be renting a home with photovoltaic, Pali Kai Realty said that it would be $4100 a month in rent. Now, if you compare that even with that 3% down, you come out way ahead. I mean, you're saving almost $150 a month. And that's not continue the savings associated with paying very little on electricity. Now, if you're fortunate enough and have the very rare opportunity to be able to put $145,000 down on that $725,000, or 20%, the payment reduces greatly. It's just under $3000 a month. Again, all of these factors you should be talking to, you know, Byron Yap, about what kind of rates he can get you and what your monthly. It changes all the time. These are ballpark figures. But that is almost an $1100 a month savings. Now, one of the things I wanted to talk about was an amortization table. Now, Byron, that's one of those things you actually can talk about, right? You actually have to forward them information, and actually break down the table, right?
BY: Yes.	
CH: So, there are a number - and when I pop my video out there, I'll be including links. But, typically, as a beginner, and doing a 3% down, the majority of your payment is going to be going towards interest. Now, there's going to be a small - like a quarter - of the portion that's going to be going towards the principle or the loan itself. So, if it's a 30-year loan, that means it's paid off over 30 years, and almost half the money that's going out is paying on the interest and the other half is going to be paying off that amount. Now, somebody might get a little upset and say, "Hey, man, I'm paying all that interest? That's a fool's game. Well, you're throwing that money away, anyway, in rent. So, it makes a lot more sense to purchase. But, and while you should most definitely talk to your tax accountant, in most situations interest is something that you can write off. So, the principle payment is going down, the interest lowers your envelope, you know, your personal liability. So, you're having that great opportunity to purchase or have a good write off. Now, the amortization table, to get back to that, shifts over time. So, every single payment - it's like three to five dollars, approximately, more goes towards that principle. So, every single month goes by, that amount that goes toward principle grows by five dollars and then it shrinks from the interest. And that interest gets less and less. Until about 17 or so years later, it really depends on how much money you're going to put down, of course, you're actually having more go towards paying off the loan than you are towards that interest. Of course, if you have the opportunity to put more money down, like 20%, it totally changes those statistics. When you see that video, it was all based off of the 3% down, given that most home buyers are looking to put less - not more. For 20%, that 145,000 brings you to that lower payment and it puts you way ahead. If you go and watch that video, I also talk about some of the lower price property. I sold a 209 Alake to someone and, actually, they, I believe you were the buyers' side on that, weren't you?
JY: Yes.
CH: Yes, so of course we can't get into their personal details, so we're going to come up with some fictitious numbers here. But, one of the big pluses, with 209 Alake is that lower price envelope means that you have to come up with less money. Now, $18,000 or $19,000 at 3% gives you a much lower payment. You know, you're going to be coming in at about 2540 per month and, if you were going to be putting 20% down, or 123,000, that brings you to 3357.  So, yeah, definitely watch that video. I'm still making some edits. But it will be ready in time. So, stay tuned, and log into mauirealestateradio.com on our web site is of course mauirealestate.net. You can get to it through there. Most people love our web site, because they get to go see the web cam, Charlie Young beach, the waves crashing. You know, if they're missing home, or just want to check out the weather. A lot of people enjoy MauiRealEstate.net's web cam. I've been getting a lot of people calling me, though, or shooting emails, "Your web cam's broken. Something's wrong!" You know we had a big south swell come recently and the beaches are a lot washed away. This is Charlie Young. There's still a good amount of sand left but bear in mind the beach is growing back. It's coming. It's still a month or two away from being back - maybe even three. But, do bear in mind that that beach will be back and it's not that something's wrong with the camera. It coincided with an upgrade, too. So, we had a web cam down, we had a big south swell, put the web cam back up, totally different picture. There's also statistics that are on that web page. Actually, one of the things I wanted to roll into is the recent release of the 2019 statistics and there's some definitely big changes in there, but I wanted to try to put it into perspective a little bit. Those recent 2019 statistics included the continued drop in inventory and the increases in the median prices. Prices for median homes increased almost 10% last year to $751,000. There was a dramatic drop though, in the number of sales. Total sales volume was a 23% drop in that total number of closed sales year-to-date for 2019. Which begs the question if we have reached the top of the market in terms of home prices. A lot of people have been concerned that prices are going down. I actually find that almost to be a positive. As a homeowner, I find it as a negative. But it hurts to see people priced out of the market. And when there's an opportunity for cheaper prices, I get excited. But, in this case, I'm not all that excited, because we have now - even though we have just past the median housing cost of 2008, what the indicators are for prices in the future is a little bit different. And I definitely want to take this opportunity to talk about Paul Brubaker. He is a true economist. I do have my B.S. in business management, taken some very preliminary 101 economics classes. So, you want to talk to a professional. I don't have the securities license or anything like that. But, on April 16th for $20, they have tickets to Paul Brubaker. He is there to learn about the fluctuations in the market and the interest rates and how they impact it. Discover if there's a recession just around the corner and learn what factors impact our local and national markets. So, you want to discover the opportunities and challenges the market may present in the future.  Get there at 9:30am even though it starts at 10. I would recommend getting a ticket in advance for that very small $20. I'll be there, so you can bump into me, say hi, shake my hand. But that being said, my assumption, my guess - again, I'm not an economist - is that the laws of supply and demand are typically what dictate pricing and supplies have dropped to their lowest in over a decade. The health of the market is typically measured in terms of either a neutral market, a buyer's market, or a seller's market. A neutral market is usually about six months of inventory. And if we're below six months of inventory available to the market then it is a seller's market. And it's a buyer's market if anything above that neutral six month. The intensity of which depends on how far that swing goes. Just to let you know, you determine by how much inventory there is by magically pretending that nothing else is going to come onto the market, there's a lot of outside factors there, and how many homes are selling per month. And then if nothing new was to come onto the market, how much time would it take for all the current availability to evaporate. We're doing this one for homes. So, to give you some perspective, the height of the inventory available was in December of 2009. It climbed, of course, from 2006 to some mild recession levels. We went from about six months or just below six months. By the time 2008 rolled around, we were close to eight months. And then, in 2009, right at 2008, that steady incline of everybody panicking in the market with the subprime crisis, we hit almost 18 months of inventory, with the median price per home that was at a very low 519,000. It was a pretty dramatic drop. That wasn't the bottom of the market, though. Prices continued to drop to 429, 000 in May of 2012. Now, this is not an economic downturn. That was a full-blown crisis. We don't really seem to have any economic indicators of a crisis coming. Unemployment is very low, and Hawaii is actually some of the lowest in the nation. But, getting back to that 429,000 in May of 2012, that was the bottom of the price. Inventory dropped. We actually went from the 18 months down to 10 months. So, that was good. That means we had less inventory, the market's getting a little bit healthier, supplies were decreasing, we're getting to a more neutral market. Prices started to rise from that date, due to their current high at the aforementioned 751,000. And the current inventory as of the recording of this was at an all-time low of 5 and a half months. We haven't seen that in over a decade. So, it is now most definitely below that six-month point. We are in a seller's market. Now, seller's market is a heck of a lot more competition than that lower price point. Properties that are under a million, in fact, under a million and a half, there seems to be a little bit more of a glut of properties in that one and a half to three-million-dollar price point. Now, that five and a half months is nearly a 10% difference from year-to-date. Condos are even more active, inventory as low as 4.3 months given the current absorption rates. The current median condo prices are at 525,000, which is actually an increase of 8.3% year-to-date. The average days on market had a slight increase to 156 days but that's a far cry from my own personal average. I was actually able to put that on Na Hoku at 212 Molehulehu home into escrow in about two weeks' time and that aforementioned Legends property at 72 Papahi, I did that in like four to six days after negotiations, we put that into escrow. The other Legends that I have done, 44 Molehulehu, it took us 8 days. But that's because we actually purposely kept it off the market. We wanted to make sure that everybody took a look at it. I produced all sorts of media and information. I'm sure lots of you were inundated with it. Online, you saw the videos I produced and that's one of the things I like to do to keep the people informed about the properties that we have available.

So, anyway, I also wanted to talk a little bit about some of the benefits of the real estate community and what we do to help foster a community. Because, real estate is not just about the dirt under our feet. It's the lives we live. RAM has, on May 11, 2019 at the War Memorial Soccer Field, is doing the Presidential RAM Community Foundation Charity Walk. Now, that's a fund raiser to help support young youths going to school. The charity walk actually was founded in 1974 and expanded statewide. And they have since its inception have more than 32 million dollars raised for local charities. This particular is going to be going towards school, the Presidential Fund. So, that is, if you are a student, coming into graduating from high school. I know a lot of you guys just finished prom, you've gotten your applications out to college, you're freaking out on how you're going to be able to pay for it. RAM is definitely one of those opportunities that you should be applying for scholarships. And the Presidential Scholarship Fund is fed primarily by agents. There are a lot of different agents out there and you should definitely pick and choose your agents on how they benefit the community. Donate to this fund through a variety of means. Some people even dedicate a portion of their funds of every single transaction to the community.

Us, ourselves, we run our annual charity drive, the toy drive. That'll actually be again this year. We'd love to have you come down. Early December, we'll be sending out our invites. You can find out about it on our web site, subscribe to our blog. That benefits Friends of the Children's Justice Center, which benefits abused and neglected kids of Maui. It's a wonderful program. There are a bunch of unfortunate stories and while we here in Hawaii are blessed with very low unemployment rates and low crime, there's definitely situations where people fall through the cracks. And Friends of the Children's Justice Center gets them when they're young. Prevents them from going down a path from which there's no return. So, please, if you're going to be donating, Friends of the Children's Justice Center is one of our favorites. A lot of the time, even the police themselves - the first person they call is not dispatch, it's Friends of the Children's Justice Center, because they can't release kids that are abused in neglected situations to grandma, grandpa, or auntie, unless they have food. Unless they have a backpack with additional clothes, books, a bed with sheets. So, they're able to stop by. No red tape. It doesn't take months to go through a process. These kids are in a heartfelt bad, abuse situation. They can - or an unfortunate spousal situation where they need to be separated from a home temporarily. There could be nowhere to go. But, fortunately, Friends of the Children's Justice Center are there to provide those essential things. And it's not just those bare essentials that they give. There's much more programs that help foster and grow. And that toy drive. I think last year, $20,000 that we were able to put together. And literally an entire van full of about two dozen trash bags, filled with Christmas gifts so that all these children come in and have a Christmas. You know, it's really heartfelt to see one of these children come in and they're there and go, "I got a dolly!" For me, our kids are very blessed and a dolly they're very grateful for, but for some of these kids that's the only toy they get. And there's also, you know, one of the children came forward and said, "Oh, my gosh! I got to see my brother! I got to see my brother." They were so excited. She hadn't seen her brother in months.  So, they provide these activities for kids. Education and a safe environment. I love them and that's who we put all of our efforts into every year.

That being said, I wanted to go back a little bit towards Byron Yap and some of the pluses of working with American Savings Bank. They are a local bank. They have how many locations on the island right now?
BY: Statewide, we have 49 branches. So, we have loan officers throughout the Hawaiian Islands. We only provide financing in Hawaii itself.  And, I can't remember the exact count of loan officers. I think Maui we have four or five loan officers dedicated to the whole island. We finance anything from condo hotels, single family homes, multi-family homes, and in a separate department do commercial financing, too. I wanted to go back. We talked about financing and one of the things I really like about our bank is, a lot of people nowadays they don't understand the importance of credit. So many times, the hardest thing I see when I talk to people is ten years they didn't focus on their credit. And that's probably one of the bigger things that holds back people from purchasing properties - is the credit.  I didn't know it until I got into the financing industry, credit is almost like your birthdate and social security number. It goes with you forever. I wish it would be a little more important to some of the younger kids and some of the adults that they teach their children - and anyone - that, "Hey, keep your credit good." Because the most disappointing thing is telling someone, "Hey, your credit is an issue." But, on the positive, we do give, you know, "Hey, here's some recommendations. There are credit companies that do help the younger people, or even the older people, to fix their credit. Because that is probably one of the biggest driving forces that holds back a purchaser besides employment, of course. But the credit thing is the biggest obstacle. 
CH: And there's a whole number of factors that can affect that. It might not even be your fault. A lot of people are in divorce situations and they don't realize some debt that was lingering after that whole resolution that is still sticking around. Years later will go apply and their credit is still hurting. There's definitely processes to mend it. But, it's important to talk to somebody like Byron, so you can discover what these things are, so there's unforeseen roadblocks. You might find that rare property that's your dream home and you can't get to it because of one of these unforeseen liens or unpaid debts that might even have already been paid. So, they will help you by holding your hand through the process to make sure that happens. And there's definitely a few war stories out there of things that come out of nowhere. 
BY: And the flip side is also - you have people who say, "I pay everything cash." So, the flip side is you've got to have credit. If you don't have credit, you can't function in the financing society. So, recommend with the people you know. Whether it's with a lender - any lender - or with someone. Do a financial checkup on your credit. You can plan forward. It's not the end of the world if your credit is damaged or has a hiccup in it. I've seen many customers come back a year later, two years later, and say "I've fixed my credit." And the best part about it, you know, being in my industry is seeing them. I think the stories I have is seeing them come back and then being able to buy something. And then saying, "This is my home now."
CH: And it is a process that ... you don't just go out and buy a home. It's something you work towards.
BY: Yes, and it's not the end of the world if you - even with bankruptcy, it's not the end of the world. You know, some people think if I file bankruptcy it's the end of the world to buy something. It's not. It just may take a few more years to be able to do something. But I think the key thing is people try to be blind to their credit. Meaning that they don't really want to know what's there. So, how can you gauge your future or how can you do something in the future if you don't really know what's there? So, I always advise people at least come in, sit down, let's look at it, let's figure it out. And we'll give you a kind of a roadmap. We can't guarantee it's going to work out. But there's a lot of professionals that can help you. But we can kind of say, "Hey, here's what you might need to do." And from there, they can seek out professional help and other agencies to help them fix their credit or build their credit. 
CH: Yep, and it's just a process. And the very first step is to talk to a local lender. So, please definitely go to mauirealestateradio.com and look at some of our associated links. You'll find Byron Yap's contact there. You'll also see that video that we talked about earlier and I also would love for you guys to give some suggestions about radio topics. I'm a little bit new to this whole process and more of a people person, not a microphone person. And I would love to have some questions posted from you the people, so we can help you purchase a property or talk about upcoming issues of infrastructure or maybe concerns about the expansion of Maui. A lot of people don't realize that Maui's population is actually dropping. And that's because of the high cost of living out here. It's the second year in a row. When these prices go up, it's becoming less affordable. That being said, there are new developments. We are at a pretty significant shortfall of inventory. I believe that Paul Brubaker was saying we have about approximately 15,000 homes that need to be built to meet current demands. I mean we only have a population of about 120,000 people. Of course, there's a lot of part-time people on top of that. But, 15,000 seems like a massive amount of inventory. But if you think about our over-inflated price, that makes sense. That being said, we can't even take pace with the current demand. We need to build about a thousand homes a year just to meet current level, to keep us flat. Stagnant. And we're only able to build about 400. Costs of building are going up and that's one of the reasons people are actually loving to talk. To get really good values with a developer, the margins are so razor thin, like the Highlands in Kehalani and Wailuku is about 675,000.  Kahoma Village in Lahaina is 625,000.  Honua Kai final phase is, that's of course more for second homes, that's going to be more in that 1.9 million. But, that's actually one of the things that Byron does a lot of - is some of the newer developer ones. Do you want to talk about some of the places you find yourself sitting and when you'll be there?
BY: Yeah, the new developments that are out there now in Kihei and Kamalani. Kamalani is up there. I'm not sure if they've released their next phases yet. Or the next parts of it. That's the largest one, I think, going on up in Kihei right now. And you have in Wailuku area you have Kamani and that's town development and there's another one coming up, another development that's coming up. But there is somewhat of a shortage or the speed coming out to be able to develop. I think what's missing right now is the lower end of the spectrum. Like, right now, the only real affordable one that I'm aware of is Waiale which they just did their taking of the names and they're going to do a lottery system I believe coming up. It's kind of tough right now as far as the timeline to put the thousand homes out there. 
CH: For Kamani, I've actually helped a few people buy there. And we actually have a process that will help people "Buy through me, move for free" and we'll help you get into your home and provide movers with that whole process. I've had many friends and clients that have gone and purchased out there. And, in fact, when demand was at its highest, I camped out there and helped them. I mean it was, it's really kind of fun. Because you got to know everybody who was moving into the neighborhood. And there were buyers who were out there as well. And it was a fun scene. They actually played some movies. Now, they're not allowing that anymore. It's kind of a bit of a circus when you drive by every day. But that being said, you can go and put your name on a list and, you know, first come first served. So, you definitely want to call me. Don't just show up there, because they won't - it's good to have specific representation. The Hansen Ohana has been on the island for over 20 years. I've had my license for 17 years. I've been one of the top 100 agents in the last 3 years. In fact, my dad has been the top 100 agent almost every single year that they've been measuring and the number one agent on our island for the last 4 years. My dad has had his license for 36 years, my mom has had her license for over 40. So, if you want a plethora of experience, I definitely recommend you talking with us because we have lots of tools. I mean, buying a home isn't just about finding that perfect place, which we can help you with. It's about the process of coming over here. Knowing the right person to talk to about making some upgraded appliances or where to find good contractors who's not going to gouge you on painting your house prices. And given there is such a lack of new inventory, at times people are looking for a home that's a remodel situation so they can put their sweat equity in and walk away with a good value if it comes to that re-sale amount. I just want to talk a little bit about the listing side of things. One of the things we do that's unique and one of the reasons we're one of the top agents in Hawaii, and Bob's been number one - even though we work as a team - Bob's been number one more times than anybody else since they've been recording. We do have a standard process of listing properties, but we do have a coming soon video, because it's about priming your audience. We have mauirealestate.net and we did just create mauirealestateradio.com that feeds into it and to a specific blog page that we have been talking about previously. But, that "coming soon" video with the 50,000 unique visitors that come to our web site every month. It is a huge powerhouse. There are more people on that than just about any other one. Even some of the bigger ones. Trulia. It doesn't matter. We're still on Trulia, we're still on Zillow. But, we're kind of like the Facebook of real estate. Most people are using us when they're searching for their property. The good thing about that is we don't require people to log in or anything along those lines. But they're still dropping their ISP code and we're cataloging what they're looking at and things of that nature. And that allows us to know, un-intrusively, direct market to them with these videos. So, they see it. If they're really interested, we can laser target those potential buyers. We're not going to be looking for listings, like some of the other firms, where we cold call you. I'm surprised that that's still a thing. You know, there's a lot more tech as opposed to simply picking up the phone and annoying somebody. These days I'm surprised that it's still a process. But, when we list it, we're always using a professional photographer. It's important that your property looks its best. We have an entire barn full of staging equipment. So, if you have a property and need a little help preparing it, that 72 Papahi took me almost two weeks to prepare. I cleared out an entire garage full of furnishings. Put in art, silk flowers, and that property popped. They were, "Oh, my gosh. Do we have to sell? It looks so beautiful!" But, yes, they did. So, we got an acceptable offer for them and it really comes down to first making the property look presentable. Hiring a professional photographer. And I have a number of professional photographers that I like that layer photos. You know, the human eye sees it so much different. And I'm blown away by some of the agents out there that use their cell phone and bleached white outside shots that you only see the inside. What he does is he layers three high, medium, and low light ranges, and layers the outside so it's even with the inside. And it's more like how the natural eye perceives things. So, we see those shots, the property really pops. But, well beyond just standard photographs, we actually utilize a Matterport camera. Our office is one of the very few people and one of the first to own a Matterport camera. A Matterport actually uses a light emitting radar, a lidar, to measure every inch of the house as it scans around. It's usually about 150 scans to do an entire home, but it literally creates a virtual model of the home that you can look. And one of the things I've actually helped people out by giving them the OBJ file and they can give it to an architect, they can drop it into their  CAD program, their computer aided design, and it gives them a short cut in producing additions to the home if, for some reason, they don't have those plans on hand. But, it's really fun and it really helps people understand the property. And it's something that's pretty rare. We own it and we think it's necessary. I thought it would just help when listing presentations, but the funny thing is it's really reduced the amount of re-visits to the property. Over and over, so many times, I have somebody that wants on the property four, five, and six times. And it's disturbing the people who are trying to move out throughout the process. So, having that is an immeasurably valuable tool. Of course, it's very important for condos as well, because a lot of time you can't get into a place. So, we also place it on the Maui Board of Realtors. We have custom brochures to accent the property's qualities, obtain title searches, because you never know. There might be some hidden rules on a property, or some unforeseen finish permits. We go and place it on realtor caravan because oftentimes it's other agents and we foster positive relationships with the other real estate agents that are on our island.  And when appropriate, you know, sometimes it's not possible or just not a good opportunity, we host after sunset caravans and get the additional brokers who are too busy earlier in the day to do that general open caravan. And we target them, we give them phone calls. We're like, "Hey, we know you sell a lot in this area. Please come in. This is a great opportunity." So, we host those and have refreshments for all of it. We're known for some of the best spreads, so people like to come to ours. Mimosas, mimosas, mimosas. Now, email alerts get sent out the all the realtors when we have those professional videos that we like to make. We email notifications to our 13, 000 client base. Now, the 13,000 seems like a ridiculous number. But it typically boils down to anywhere from 50 to 100 people that that gets marketed to. Of course, there's a lot more people that we don't have their email addresses that are using our web site and that applies in the millions, but typically, we're tracking about 100,000 at any given time. Email notifications get sent to top realtors. Specifically, depending on the location of the property, we place information and we specialize in internet marketing which is why our web site is number one. There is ... information on web sites besides ours, though, like the aforementioned Trulias and Zillows, and we really know how to work on their analytics so that your property appears as number one. Most people don't get it. They just copy over pictures that they've taken. But, there's a lot of little things you can do to give yourself unique placement. 90% of the people find the property online, so make sure that you have the best placement if you're going to be listing your home.

Of course, we do social media. We do very laser and targeted approaches to this, so it's important that you're not saturating or upsetting people in their case feed that they just don't want there. Obtain feedback from every showing, because that's important. We had a property that was just a gorgeous little beach house-looking place a couple of blocks from the ocean and it was a robin's egg blue. I thought it was adorable, but we weren't getting showings. It just wasn't happening. We took it off the market, painted it, and sold it as soon as it got back on. It only took us about a week and a half, and we got an accepted offer. And that was just that I'm calling agents, "Why aren't you showing it?" "Ah, they didn't want to see it because of the blue color."  Well, we're not going to hurt your feelings. We know you're all grown up and we're going to give you that honest feedback. We also have a lot of print media, you know. A lot of people say print is dead and it's not. We're actually on the front two pages and the back two pages of Homes and Land. We have been doing so good selling our properties. We produced a little video a little while ago. I've been getting rid of all my inventory left and right. We're dropping the back two pages of Homes and Land I believe because we can't fill it up. So, I keep those back two pages, so if we can get a few more listings, that'll be greatly appreciated. So, please visit us at mauirealestateradio.com or mauirealestate.net. We also place ads in the local newspaper where appropriate or on the Friday biweekly special. Talk about regular open houses that we do, if that's something you're interested in. And we email you those constant updates about the market. We're very accountable to the marketing we do. And you can click on the links, see the information that we're producing.

We like to utilize licensed professional drone operators to do aerial tours. You know what? Believe it or not, I am actually an FAA-certified licensed drone operator. That's one of the places I actually know Byron from. I initially met him through real estate and the loan process, but we actually became good friends through our mutual appreciation of drones.  I started Maui FPV drone racing to sort of gather all of the community members .... Drones and I was talking to Byron about it and he was all, "Oh, yeah, I love drones and I've got my FPV set up." Now, over time, I've kind of converted more to the photography-based drone like the Mavics that are much more easy for a layman to fly. We have those, some incredible people, some wonderful pilots, some of the world's best, like Ethan Galmack, and Mutli-copter Maui Dino, he is fantastic. So, if you want to go to our Facebook page, Maui FPV Drone Racing, if you're interested, or just want to stop by one of our meet and greets that we do weekly to bi-weekly, we'd love to have you come down if that's a hobby that you want to get into or if your kids are interested in. Or just to entertain yourself for the afternoon. We have a blast while we're down there. Byron, you want to talk about that for a little bit? Some of the things that are very interesting about flying in Maui Lani.  You need to have a commercial license in order to be a realtor that flies a drone, even though there's lots that don't. But you want to talk a little bit about the hobby?
BY: Yeah, you know on the hobby side, there's active probably 20, 30 people on Maui. Ethan Gomack who's graduating from high school this year. He was one of the youngest and I think he's gone to many regional and U.S. championships or events he was in. For a little community, we're doing great.  With all the other islands in Hawaii, it's kind of a beautiful thing. We had our state championships. We held the first state championships I can't remember if it was three or four years ago on Maui. The first one in the state to get people qualified for a so-called world championship. So, it's been good, you know. A lot of amateurs, a lot of people enjoying the hobby, and there's an engineering side to it. You know, it's the future.
CH: Yeah, you know we've seen a lot of the members have been dedicating their time towards the tech programs and their efforts towards the public school system. And really teach people the proper etiquette associated with flying, you know, not just buzzing people's houses, but finding that open park space that's out of air control. Making sure that you stay below the proper altitudes. You know the difference between what I do commercial photography and videography and what the hobbyists are allowed to do is totally different. So, it's important that you educate yourself before you show up.
BY: Exactly. Advocacy for the safety and the privacy for the people. As we enter this technology area, some people do get offended and we try to tell what it is and what it isn't. The typical thing has been spying. And most people are not doing that.
CH: A lot of concerns over that.
BY: Yeah, and now I think the cell phone provides more spying ...
CH: Isn't that true?
BY: ...than the drones. So, it just a small thing, not a large thing, that's fun to do in your time off and introduce more people to it. We've seen a lot of young people. I think one of the exciting things we did, it was a year ago or two years ago we helped with the college engineering program for free on a sub basis to help a teacher teach a drone class.  So, that was one of the nice things that we got to do. 
CH: All right. And, I do find that going back to the cell phone interesting, because I could go to any beach, anywhere, and pop out my cell phone. Make a slow panning video, while I'm standing ten feet away from somebody and they're in the shot. And I coast over the beach and people were in their bikinis and whatever, and as soon as you pop out the drone, people get a little flustered. It's becoming a bit more common. It's not as much of an issue for people, but we always bear that in mind. Most people don't realize that the drone in front of us, spying is next to impossible. I mean, it would be a lot easier to use our phone as opposed to a drone that is flying at 40 miles an hour, at an altitude of 50 to 150 feet. It gets next to impossible to see any detail or spying or anything like that. Nonetheless, we are very conscience of concerns for people. You know, when I fly, I'm talking to my neighbors about, "Hey, you know, I'm going to have my drone out. Where is it OK for me to fly?" And they're aware and I try to make sure people understand that when I'm filming their home there are certain things that are appropriate and certain times that it is not. Regardless, I wanted to talk about war stories. I want to end it on a note that people find a bit more interesting - and just kind of educate you at the same time. Tell me again, if you go to mauirealestate.com some of the things that you want to hear about, things you want to learn of, and if war stories is something that interests you. One of the things that has happened to me, actually a couple of times, is that throughout the loan process, they're purchasing a property and we're going to do their inspection, they're ... out money to do that. They're taking the time, they're doing the loan application, and they neglect to tell their real estate agent, or they neglect to tell their loan officer, "I'm going to buy a new car. I'm going to buy new furnishings." And then they go and do a re-check on their furnishings, or on their credit and, bam, they can't qualify anymore. Because a lot of these margins are razor thin. Or, it changes their rate. Have you had a few of those happen before?
BY: Oh, yes. We have it all the time and we notify people. I think that's why it's important in the beginning to - I always preach this and I believe it is to get together with a - if you're going to buy in Hawaii - support the local economies, support the local realtors, support the local bank. The banks are the ones that are employing the local residents and they know better than, say, the big mainland bank. And a lot of times, the big mainland bank may have a somewhat better rate but come to the end, you may have that issue. We see it all the time where they don't understand the Hawaii market. And then halfway through they say they can't do it because that building is considered a condotel. Or it's considered something else. 
CH: Maui Banyan is a perfect example of that. I was talking and I've sold quite a number of units in there, because they're lock offs and incredible income earners. Unfortunately, there's not a lot of two-bedrooms in there for sale right now. But ASB is one of the only banks that can loan in there because, while it does have a condotel situation where there's a greeting desk, it has this very rare situation where there's just a couple of units in there that are time-share. It's not something where there's a lot of the units. It's like a dozen or maybe less than a dozen. And when people are looking on their title searches or on their loan application, they can get shut down in the last week or so. I had somebody that were adamant, they were a partner in a bank. They were like, "I can get a really good rate." And I'm like, "OK. Let me talk to the loan officer and make sure they talk to the underwriter." I composed an email, had multiple phone conversations, like, "Are you aware that this is a condotel? Are you aware that there's a few units that are time-share in there?" And she said, "Yes, I'm very aware." "OK make sure you talk to your underwriter." She said she did, but lo and behold, a week later, bam, we couldn't get the loan. Fortunately, Byron stepped in and he was able to get that loan hammered out in a very short amount of time. We did have to extend the escrow, but he was lightning fast to react because he's done quite a few in there. 
BY: So, I think that's part of the problem, too, and you have a lot of homes have additions put on that maybe weren't run through the county. You know an extra room in an enclosing of a garage. And that's what, whether it's our bank or any bank, going to a local bank will help you get the best program available. 
CH: And I think that leads me into again, what kind of topics do you want to see? Building permits is a big one. They actually recently passed a new law here in Hawaii that allows for additional dwellings on residential lots that are over 7500 square feet. That actually helped me sell my 1051 Kihei Road property, because it was on a quarter of an acre. So, somebody can have not just a main home in Ohana, they could have a main home on Ohana and another Ohana. So, that's really going to help people convert these homes that were not conformed to a property that was not conformed where you actually can use those incomes to qualify for a better loan. And have a mortgage that's not so overbearing. It's great to have those renters in place to help bear the burden of that monthly cost of the mortgage payment. I'm Clint Hansen with Maui Luxury Real Estate. But, again, come to our web site mauirealestate.net for a lot of information, statistics, blogs, and our web cam. And one of the best, easiest to use search features that we do not require you to log in. We do have those features where you can create a login, you can have a favorites page, and track it. We don't bug you there, we don't take that email address. You have to specifically email us a request for additional information if you want to open a regular contact. We're not going to be pestering you like a lot of other web sites can have a tendency to do. And, again, we don't do those cold calls. So, please, also, if you want to follow the blog and go and see that video about the benefits associated with purchasing a property or renting, go to mauirealestateradio.com, that's mauirealestateradio.com. And thank you for tuning in today. I really appreciate your time. Byron, thank you for coming in and helping me with this.
BY: Thank you very much. 
CH: This is Clint Hansen, again, with mauirealestate.net, the Hansen Ohana and Maui Luxury Real Estate. You're tuning in to KAOI 1110AM, 98.7FM, and 96.7FM. Aloha and have a wonderful day.

List of Shows to Date:

Show 1: Mortgage vs. Rent
Show 2: Buying on Maui. Deciding where to purchase.
Show 3: Leasehold, affordable ownership and Na Hale O Maui
Show 4: Inspections with Beau Petrone
Show 5: 1031 Exchange
Show 6: Hospital
Show 7: Insurance with State Farm agent Kit Okazaki
Show 8: Understanding the escrow process with Pam Teal of Fidelity National Title
Show 9: Everything you need to know about solar on Maui as of 06/17/2019
Show 10: The Hansen's a family tradition in Real Estate
Show 11: Paul Brewbaker discussion on Maui
Show 12: Keli with Creative Financial
Show 13: Pets and Pests
Show 14: Clint Hansen with Kim Komando
Show 15: Clint Hansen with Bob Hansen and Donna Hansen
Youtube Interviews