How to avoid Hawaii Condo Buyer's Remorse

This might be our most blunt video to date. Today we're talking about condos, and we're not doing our typical video where we're taking you through the buildings and telling you where they are and what they offer and how much they are, but rather we're talking about you, if you've ever considered buying a condo here on Oahu. We're answering the questions who should and who shouldn't buy a condo here. By the way, I'm Myla Gibson-Bamman, realtor on Oahu with Dwell Hawaii, along with my partner Koa Cassidy and Yasu behind the camera. If you're still interested in having a conversation after watching this, get in touch with us at info at dwellhawaii.com. We have these seasons where we kind of get eaten alive by inquiries and people wanting to see condos, and I would say we're in that season right now, which is probably what has inspired this video. And there's this one question that often comes up when we take buyers out to see condos, and it's, well, how much do you think this is going to be worth in three years? And we're like, there it is. That seems to be a question that kind of tells us everything. It's also somewhat of the wrong question, and we'll get into that in a little bit, but I thought it would be responsible to talk about the market and what's going on here on Oahu, especially in the condo world. A little bit about where we are. We're in Ward Village. We love filming Ward Village. It's just so pretty. And we're here on the bridge of the Victoria Ward Park, which is now open. I saw one of my clients here this morning with her two kids, and she was thanking me. They moved into a building called Ulana, and she was like, I love it here so much, Myla. I don't have to drive anywhere. I get to just walk over. My kids get to meet other kids. I get to meet other parents, and it's true. That playground over there was full of people. We got chased off by the Ward Village security, so we're going to try and make this quick because we might get chased off from here too. Pretty much anything in this neighborhood is about a million and up, and that's starting for a one-bedroom, especially for anything here along the front row. And then as you go further back towards the mountains, the prices come down just a little bit. But most of our condo buyers who just like contact us out of the blue are the ones that are taking to Zillow. How much can I get a condo for on Oahu? And then they're seeing like three, four, and five hundred thousand, or they're even seeing sometimes two hundred thousand dollars. And that seems really cheap next to our single-family home market, right? Where our single-family homes are 1.2 million dollars, if I'm being realistic. If you're looking for something that's turnkey, or even in at least average or above average condition. If you're going into excellent condition, you're going up to 1.3, 4, and 5. 1.3, 1.4, 1.5. Our single-family home market is still pretty robust. It's a little bit more balanced than it usually is. Usually single-family homes, just like they come on the market and they leave in like seven days. But on the way to making this video this morning, I got a call from somebody that made an offer on one of our listings in Ho'opili that just came on the market a week ago. So you can see that it's performing the way that I just mentioned. Condos, soft. Days on market, longer. We're seeing price reductions. We're seeing most condos selling for under the asking price. So I'll read off some of those other reasons why. Buildings in general, they have leaks. All kinds of leaks. Leaks from the washer hose cable. Leaks all throughout the stack. If there's like a drainage, something that's antiquated that hasn't been paid attention to, it's going to leak through the entire stack. And we're seeing a lot of that right now, especially because most of the condos on O'ahu were built like in the late 60s through the 70s. So this boom that you see here right now still isn't even anything compared to what was built during that era. You've also got some spalling issues. You've got elevators coming up for repairs. And so with all the buildings being built pretty much in the same era, those things are coming due all at the same time. Special assessments are landing across the island. I also would say that this is due to deferred maintenance, but also because of that insurance thing we've been talking about on this channel so much. Hurricane insurance is required in our buildings here across O'ahu, and this is a new thing. And that's impacting the HOA fees. A lot of buildings actually tapped the reserves in order to bring the hurricane insurance up. And now they're assessing the owners for the capital improvements that those reserves were actually set aside for. HOA fees are climbing because of all of this. Short-term rental rules have changed dramatically. Investor demand has collapsed. In addition, our Japanese buyers have changed so much. The buyers and the seller behavior has changed. So a lot of Japanese sellers have put their units on the market, but at the same time, Japanese buyers aren't coming out here and buying the way that they used to because the yen is so weak compared to our dollar. And then, of course, you've got interest rates that are still remaining pretty high. I mean, now they're like at 6.125%, which is less than they were a couple of weeks ago with the Iran war. But still, it's hard for people to stomach 6.125%. Now, if we saw like 5.99%, I believe it would change the behavior. And we saw that actually like a couple of months ago when the interest rates touched 5.99%. So the market is repricing condos for what they actually are. Condos are a lifestyle product. My husband and I were here last night having dinner at Merriman's. We used to live here in Kaka'ako and we were reminiscing just on how easy life was here, how it was so fun to just like walk to Whole Foods. It was fun to walk somewhere for happy hour. We were skinnier because we would go out to eat and then we would have to walk home. If you're shopping for a condo as an appreciation play, it's really not the right reason to be shopping for a condo. And we're going to get into a little bit more of that as we talk about who shouldn't buy a condo on Oahu. We just took a drive west. We left Kaka'ako and now we're in a neighborhood called Salt Lake. We started this video saying that we're going to be blunt. So I don't only want to show you the nice, beautiful, luxury condos. We're in a neighborhood that we kind of poke fun at, like we'll call this a concrete jungle. But if I'm being real, it's one of the best neighborhoods you could possibly buy in or live in because it is so convenient. It's not far from the airport. It's kind of like right, it's in Honolulu, but it's right in the middle of all the access points. So if you want to get on the freeway to go to the North shore, to go west, to go back into town, uh, you know, there's, there's places to go in every direction. Um, very close to the military bases. So our military personnel, they love this neighborhood because it's just, it's so easy and you're pretty much never in traffic. Um, but anyway, getting to who shouldn't buy a condo. Okay. Number one, if you're anxious about resale in the next three to five years. So I mentioned this in the beginning of the video. If that is your leading question, how much do you think this is going to be worth in three to five years? You really shouldn't be buying a condo. You're really buying lifestyle. And I'm, I can't say that enough. If appreciation matters to you, um, buying in a soft condo market just really isn't where you want to be. Um, single family homes still are moving. So I said that a little bit earlier, single family homes will still move in a downturn. Condos are going to sit. And that's really what we're experiencing right now. Number two, if you're trying to cashflow a short-term rental, so that 4am chat GPT pro forma on the short-term rental you saw is really not accurate in 2026 laws have changed. Penalties are real. Um, certain homeowners associations are also getting involved where even if the building is in a short-term rental zone, the building itself is saying, Nope, you can't do that here. Kakaako for example, is six month minimums. So I don't know. I just, to put it blunt and to put it plain, if you're thinking about buying a condo for Airbnb, we're going to strongly say don't do it. Uh, number three, you hate HOA fees, but you're trying to talk yourself into them. So if every time you get that HOA bill, you're going to cringe, you're going to stress, you're going to have to go out and get a drink. Buying a condo really isn't for you. But if you're like my husband, if you're that guy that is like, I don't want to worry about anything. I like being able to predict how much things are going to cost every month, even though I know that maintenance fees go up and they do go up. That's another question we get often. In addition to that, how much do you think this condo is going to be worth? It's well, how much do you think the maintenance fees are going to go up? They're just going to go up. They just do. And your condo docs are going to tell you, they're going to project for you any capital expenses that are coming up, how the reserves, uh, if they're strong, um, what they're going to be used for when they're going to deplete them, how they're going to fill them up again, all that stuff's going to be there for you. Um, and it's so important for you to dive into that stuff. But if you don't have the tolerance for that, buying a condo is not for you. Number four, along the same lines as HOA fees, if you cannot stomach 30 to $80,000 special assessments, buying a condo is definitely not for you. Most of the buildings on Oahu are old. Yesterday, I took out some clients that wanted to look at units in the three to $400,000 range and all the buildings kind of look the same. Why? Because most buildings in that range were built like in the late sixties into the mid seventies. And so they all kind of have the same characteristics, you know, CMU walls, some of the interior of the units have mirrors on the wall still. Actually, that was one that was built in the eighties. Um, you know, but most of these buildings are old. So they're coming up for these big capital projects, spalling, elevators. Um, you know, you've also got these big plumbing projects that are coming to you. Fire sprinklers were the big talk of the town a few years back. Cause there was a big fire in a building here called Marco Polo. Um, and our mayor at the time was like, well, sprinklers are going to need to be in all the buildings and all the buildings are going to need to figure it out. And since then that, that talk is kind of quieted down, but just know like, that's still kind of like burning or simmering in the back of our minds. When we show people condos that don't have sprinklers and these condos are typically going to be anything built before 1977. How did these sprinklers get paid for? How do these big, um, capital improvements get paid for? Well, reserves if they have them, but if there's no reserves, it's going to be by way of a big special assessment. Typically the building's going to figure out, okay, do we need to take out a loan or are we just going to charge all of the owners across the board and have them pay it at one time? Um, so that's something if it really weighs on you and it's something like, maybe it's not happening now, but you're thinking, Oh my gosh, is there going to be a special assessment in like five years? You know, maybe a condo really isn't for you. Uh, the next thing is you want to renovate the way that you would renovate a house. You want to move the walls and you want to open up the kitchen and you want to put in a special type of flooring. Maybe you want to add a bathroom. Maybe the unit doesn't have a washer and dryer inside, but you're like, Oh, well maybe we can add a washer and dryer. No, if it doesn't have a washer and dryer, you're not going to be able to add a washer and dryer. So stick to a house. Uh, number six, you have a pet that doesn't fit the building, but I have a pit bull and she's 80 pounds, but she's the sweetest. Well, the weight limit on this building is 25 pounds. That 80 pound pit bull isn't going to be able to come with you. Well, what if I get like the, um, the assistance animal, uh, license or whatever that is like, okay, maybe yes, but in general, you want to really be sure that you're checking the rules about pets. If you come to us saying, well, I have two cats and a dog more than likely, you're not going to be able to buy and really not even in any townhouse for that matter. I know we're not really talking about townhouses in this video. We're sticking to condos, but condos are very strict on their pet policies. Uh, number seven, you can't, or you won't read through the AOAO financials. Now we pride ourselves, especially Koa, because he's very analytical and he loves to dig into the condo and the reserve studies and, um, all of the financials. But if you yourself aren't going to take the time to care about that, um, buying a condo is not for you. You really need to care about that. And we'll encourage you in that. And then finally, number eight, you're buying to park money and just wait. This is something that worked back in 2019. Uh, it worked like when ward village was just starting to sell everything. And I mean, you still got units there that at night when you're having dinner, you'll look up and you'll be like, gosh, why? It just doesn't seem like anybody lives there. And there's like eight lights on. Um, so there were people who bought and park their money and have experienced appreciation through COVID. Um, but that appreciation just really isn't there at this time, especially with all of the HOA fees increasing. So buying just to park money, we wouldn't recommend it. All right. Now that I've been a complete Debbie downer for like five minutes, we're going to talk about who should buy a condo. And we've got a listing here at a building called century West, fully renovated. It's well-priced. We're going to take you in to take a look at it. And we're also going to go over who should buy a condo. Welcome to 3161 a la Ilima street number 6 1 3. This building is called century West again in the salt Lake neighborhood. My clients bought this when they were young and I'm single. Actually, they both lived in the building and owned a unit here. And, uh, they have since gotten married and they renovated this together in this last year, really poured a lot of blood, sweat, and tears into this kitchen. Typically it's like a, a galley kitchen and you've got cabinets here blocking all the light in the view. So they were able to open this up really nicely, put in some really nice hard surface flooring and out the window here, we've got a view of the mountains and you've also got a park down below. So some green space that offers an expansive sense of space. You've got picnic tables down there and just like a really, really convenient location, two bedrooms, two baths. There is a washer and dryer on every floor. So my biggest objection with this unit has been no in unit washer or dryer, but priced at 405. It's very appropriate for a unit of this size that doesn't have a washer and dryer inside. This is something rare. There's a pantry here. Maybe this would have been an appropriate spot for a washer and dryer, but now it's just a great place to put like paper towels and cleaning products and, um, toilet paper. And then a beautiful bathroom that's been renovated so nicely and stylishly. We've got our guest bedroom here, and then we've got our primary bedroom around the corner and then our primary bedroom. We've got window ACs in here. So that's nice. And the bathroom is so, I love it. It's very spa-like. All right. There are some very real and correct reasons for buying a condo. You may not always hear about them. So we're going to give them to you right now. Number one, you travel a lot and you like this lock and leave lifestyle. This condo, especially because of where it's located in Salt Lake, we're like five minutes from the airport here. Actually, Koa lives in this neighborhood too. So when my family comes into town or even when my husband and I go out of town, we'll park at his house, just up the street from here. And then him or his wife will take us to the airport and then pick us up when we come home. So this unit in this neighborhood is really perfect for that. Number two, you have real safety concerns. This is a really good one for my husband because we've had stuff stolen from us in the middle of the day in a nice neighborhood. And so ever since then, he's just like on edge and security is a very big deal to him. So when we went from our condo to our house, it was tough for him in the beginning and it's still tough now. I mean, of course we're loaded with security cameras and he turns the alarm on and we've got the big dog, but I will say living in a condo, we never really worried about any of that. Now there was a situation recently, we had some clients under contract and there was a murder in that building a few years ago. And so naturally they were like, can you tell us about this? And I will say that building was one of the tightest on security that I know of. And it was a personal situation. The resident actually let someone in and had a relationship with that person and that person and him had an altercation. So it wasn't anything necessarily to do with the building. And actually what was really impressive was how the building handled it after the fact. So yeah, again, if security is a big deal to you, living in a condo might be the right thing. Number three, you are staunchly opposed to home maintenance. Again, this is my husband. It was a big hurdle for him to get over when we bought our house and had to move in and immediately put gutters on, immediately changed the roof, had to do irrigation, had to figure out how to keep water from going under the house and into the foundation. If you're not one of these people who wants to have a roofer's number in your phone or, um, you know, have to tend to anything outside a condo is really great for you. It does offer, um, peace of mind, knowing that these things are going to be taken care of for you. Number four, you want to live somewhere that single family can't take you. This is something my husband and I were talking about again last night at dinner. There are no single family homes in Kaka'ako. Um, there's not really many single family homes here in salt Lake. I mean, in the middle of salt Lake, like I said, it's kind of like we joke that it's a concrete jungle, but it's a very affordable place to live and very convenient. Now on the perimeter of salt Lake, there are single family homes, but you're going to pay a premium for them because of the location. Um, I'd say homes in salt Lake or gosh, they're up in over one and a half million, 1.6 million up to 1.8, even 2 million. If you're on the golf course, uh, and then number five, you're downsizing or retiring and you want predictable costs. Yes. Maintenance fees go up. They typically go up incrementally. They're not arbitrary. Your predictable costs on water usage, electricity, barring, you know, HECO raising their rates. Um, it's not really necessarily anything to do with the building itself. And if HECO raises rates, they're raising them on everybody. Even if you own a single family home, um, your HOA fees also, I mean, they're, they're going to cover your insurance. You're going to know in the reserve study, you're going to see what the plans are for when they're going to do the roof or when they're going to overhaul the chillers or the AC or the elevators. And you'll be able to predict what those costs are going to look like in the future. Um, number six, you want amenities. You would never build yourself pool barbecue area gym. One that came up yesterday with the clients we were taking around with the guest suites. So there's a few buildings in like ward village. I always, one of them whole cool. Uh, um, another one that comes to mind is Azure in the Ala Moana area, beautiful guest suites that rent for like $200 a night, bigger than a hotel room. Um, my client was actually like, Oh yeah, the bathroom is just as big as the bedroom. What's nice is, is that you can still welcome guests into your condo, but they don't have to necessarily live with you. Now that's not in this condo, but that's in some of the others where the guest suites are available. Um, some other things that you might not build yourself like a Koi pond or like a nice little garden, um, a children's play area. And then number seven, finally, you're buying it to use it. And you're not intending to trade it this morning. When I was thinking about this point, I was thinking about some of my financial advisor clients or friends. Um, and they can't help it. They're always thinking about the trade. You know, how much am I going to buy this for? How much is it going to appreciate? What about the maintenance fee? I need to offset this and that. And they just like paralysis by analysis after a while. And I always tell them like, you know, real estate is not the same type of commodity that you're trading. Um, you know, you kind of have to change your thinking about it a little bit. And it's so hard to say that to a financial advisor and I love you guys. Um, but yeah, a condo, it's just, it's just not, it's not that it's not something that you're going to buy and you're going to count on selling it in three to five years for a certain amount. Um, even if you're thinking, okay, I'll move out of this in three to five years and I'll rent it out. Um, you know, I just think again, I can't say it enough. And to just simplify it by a condo because it fits your lifestyle before we close and really answering that question again, about what will this condo be worth in three to five years? The real answer to this question is another question. And that is, will I love this condo as much in three to five years? If I sell it for exactly what I paid for it, we make money when you buy and that's the truth. And so the fact that we're here kind of like talking you out of something should tell you something. We would rather lose a commission than sell you something that isn't right for you. It's totally okay to rent. So if you don't have a threshold for some of the things that we mentioned on here, rent for a year, two or three, it's totally okay. And then come back to us when you're really ready. And when you really think that it's an appropriate time for you to buy. As a matter of fact, some of our very best clients are ones that started off renting for two years and then contacted us and now own in ward village. And we run into them and they're like, we love our condo so much. Just like the gal I ran into this morning at the park, you know, they'll talk about just being able to walk around and go to the restaurants. And again, they're always talking about the lifestyle. It's never about guess how much my condo has appreciated or guess how much my maintenance fees have gone up. You know, like they're voicing the things that, that we've talked about on this video, speaking of rent. And this is just us being very sincere. We're not able at dwell Hawaii to help you with rentals. There's not a compensation structure here in Hawaii for being a rental agent. We can certainly point you in the right direction, give you some resources, but if we're a little bit short in that regard, please know that it's not because we don't want to help It's just because Hawaii real estate isn't set up that way either way. Again, if this video has resonated with you, or if you want to continue having a conversation after you've seen this, get in touch with us at info at dwell hawaii.com.