Excerpt from Honolulu Star Bulletin newspaper
Deployed troops get jump on Hawaii housing market
Service members are getting a jump-start in the Hawaii housing market by buying while deployed
Shelley Patrick, a 33-year-old staff sergeant with the 3BCT/25th infantry division, is deployed to Iraq. But that isn't stopping her from hunting for Hawaii real estate.
Patrick, who will be home from deployment in about a month, began looking at Hawaii real estate listings online as a way to pass the time in Iraq. She began looking in earnest when friends referred her to a Hawaii-based Realtor.
"Up until now I have lived in (government) housing, which is OK, but I think for the money I am losing to stay there, sometimes in old, drabby housing... I could be paying on something I own," Patrick said via e-mail from Iraq. Although Patrick could have waited until her return to look for housing in Hawaii, she's hoping to get a jump-start on the 4,000 or so deployed Hawaii soldiers who will be returning home by October. While many will choose to rent or live in government quarters, an increasing number are electing to get into Hawaii's home market from afar.
More generous base allowances, higher loan caps and continued low interest rates have armed military buyers with more buying power than they've had in the past two decades.
The wars in Iraq and Afghanistan have created more interest in veterans' benefits and have made more of Hawaii's active-duty military eligible to buy into the market, said Ivonne Perez, a loan guarantee officer for the Loan Guarantee Division for the Department of Veteran Affairs, which serves clients in the Hawaii and the Pacific.
"We have more activity because of the war," Perez said. "The number of soldiers has heightened and there is more activity." In addition, since 2005 Hawaii's military has had access to higher maximum VA loan amounts, she said. The maximum loan amount rose from $240,000 to $539,475 in 2005 and increased to $625,500 in 2006, she said.
"That put us in the game," she said, adding that the number of VA loans in the Pacific virtually doubled from 2005 to 2006, when 758 VA loans closed. This year, based on activity to date, Perez is expecting the number of loans that her office handles to reach 1,000, she said.
"The increase in military basic housing allowances also has made it possible for even the military's entry-level enlisted, who would typically get in the neighborhood of $1,698 a month in housing allowance, to qualify for a mortgage to purchase starter homes and condos, especially in the Leeward and Central Oahu areas".
"The increase in loan caps also has made it possible for senior officers, who would typically net about $3,000 a month in housing allowances, to buy into more expensive markets in East and Windward Oahu".
Hawaii's overall housing market has softened in terms of sales, but among some military buyers there's a sense of urgency to get into the market before home prices and interest rates rise.
There's a growing recognition among some military members like Brett Salter, a U.S. Coast Guard second class gunner's mate stationed at Sand Island, and his wife Jackie Merino, that it just makes more sense to use their housing allowances to buy property on Oahu rather than use it to pay rent.
"I really hadn't looked into buying a house, but after my neighbors bought their house, I realized that I could buy a house for about the same as it would cost to rent," said Salter, who just used a VA loan to close on a two-bedroom, 1 1/2- bath property in Ewa.
Raj and Mona Butani chose Barnes to sell their Harbor Court condominium after Raj returned home to Hawaii from a yearlong deployment in Iraq and separated from the U.S. Army. Barnes' prior military service enhanced the couple's comfort level, Raj Butani said.
"In our case, our buyer was a former military couple, we are a former military couple and our REALTOR® was former military," Butani said. "Having military experience in common does provide people with some level of comfort, but it's not absolute. We know non-military agents that cater to military families because there is a constant pool of buyers and sellers because there are always people moving on and off the island."
Military moves and deployments aside, the desire to get settled after dealing with so much displacement from the war-driven deployments of the past several years also has fueled the military home-buying market in Hawaii.
For Jacob Laughlin, a staff sergeant stationed in Iraq and his wife Stephanie, who had been living in California with family during her husband's absence, getting set up with a home in Hawaii prior to his return from deployment was due more to the desire to get on with their lives than to beat the rush.
Like a growing number of military buyers in Hawaii's marketplace, the couple took advantage of technology to find and later close on a two-bedroom, one-bath townhouse, sight unseen.
"We had just had a baby, so it didn't seem feasible for me to physically look for homes in Hawaii," Stephanie said. "And I really wanted to have everything set up for Jacob when he came home. I didn't want him to have to go through all that stress after coming back from Iraq."
They had their REALTOR® send pictures and video of Hawaii homes to Iraq and California. Once the couple found a house that they liked, they had a friend who was based in Hawaii visit the property for a second opinion. Stephanie used power of attorney to close on the property from California and picked up the keys a month later.
"It was the most amazing feeling," Stephanie said. "It's almost surreal."
And best of all, come October when many of Hawaii's returning military begin searching for housing in earnest, the Laughlin family will be hunkered down enjoying their little piece of paradise. This time, Jacob's return will literally be a "home" coming."
Star Bulletin July 2007