Not the newspaper you want to see on your vacation over coffee and croissants.
Events of the past few weeks in Hawaii should send second home owners looking for their home insurance policies. Regardless of whether your property is located in the mountains, by the sea or anywhere else, insurance is critical. Remember, there’s always some disaster to be protected from. And in the case of second homes, their often far-flung location may catch you off guard in insurance matters.
Think about it. You’re used to the potential disasters where you live, but those risks are often different elsewhere. My Dallas home owner’s policy has little need to discuss avalanches, hurricanes, tsunamis or volcanos. Homes in Hawaii may fall victim to all four, but are unlikely to be concerned with tornados.
The world is captivated by the images coming out of the big island of Hawai’i this week as Kilauea erupted into the Leilani Estates subdivision. Thus far there are 10 fissures opened along the Eastern Rift Zone that runs along a historic volcanic path, marked by ancient volcanic ridges to the south.
Heat Map listing the 10 current fissures.
Next week, I’ll be in Hawaii on special assignment (ha!) looking into the perils of natural disasters and how insurance is likely the best defense in areas prone to a host of potential disasters. As you can see from the heat map above, there are a lot of homes near this unfolding eruption. There are already multiple stories out about how many regular insurance policies won’t cover homeowners’ damage.
Remember: When I’m not stirring up trouble in Dallas, Texas or Honolulu, Hawaii for Candysdirt.com and SecondShelters.com, I’m off scouting interesting locations for a second home. In 2016 and 2017, the National Association of Real Estate Editors recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards. If you’re a Realtor with second home clients who’d like me to feature their journey, shoot me an email email@example.com. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.
News media loves the biggest car crash, so during the Recession, Las Vegas and a few other cities were ever-present in the headlines of bad real estate news. The table above illustrates how deep the crater went and how far it’s returned to pre-Recession levels. For homebuyers in the market, you may have missed out on the gains from the depths of the market, but there is still room for building equity.
I say that because, as of March 2018, The Greater Las Vegas Association of Realtors reports just over a month’s supply of homes on the market with roughly 30 percent fewer homes listed this past year (but 6.4 percent more condos). Couple that with a 15.7 percent year-over-year increase in single-family home sales prices and a 30.1 percent increase in condo prices. That translates into a median single-family home selling price of $280,000 and $160,000 for condos and townhomes. That compares with a historical average of 5 percent annual appreciation. All this activity and you’d think you were in Dallas.
The 2018 World Happiness Report named Finland as the world’s happiest country. In fact, the top four of the 156 countries measured were all Nordic – Finland, Norway, Denmark, and Iceland (“unhappy” Sweden popped in at number nine. The good old US of A? Eighteenth).
The 2018 report is a cumulation of 2015-2017 while the prior report contained data from 2008-2010. Comparing the two reports, you may want to explore Finland as a second home, if for no other reason than improving your mood. The latest report shows that the US happiness index is down 0.315 points while Finland gained 0.100 points. This may not seem like a lot, but the index is an eight-point scale, making a 0.415 point separation a significant 19 percent.
Does living on the top floor of most high-rises still feel like living in the basement? Chicago’s 100-story John Hancock Center will change all that. Whereas the tallest residential home in Dallas is a 42nd floor penthouse, the Hancock’s condos don’t start until the 44th floor and continue all the way to the 92nd floor. Completed in 1969, the Hancock Tower is one of the most recognized buildings in Chicago and offers up some surprisingly inexpensive homes with incomparable city and Lake Michigan views.
Sure, Chicago winters are unkind, but the summers, when second home ownership has its privileges, offer a plethora of activities to shake off the cold and grey. The Hancock is in the thick of everything Chicago has to offer. It’s right on Michigan Avenue in the thick of the city’s tony shopping. It’s a two-block walk to the beach and is a 10-minute taxi to Millennium Park and the Art Institute of Chicago.
Sizes range from 550-square-foot studios to ~1,800-square-foot, three-bedroom units. Of course, with over 700 units, many have been combined for larger spaces. Prices are surprisingly affordable with studios starting just below $200,000 while three-bedroom units trade in the $500,000 to $800,000 range depending on renovation. Let’s look at both ends of the market and with 703 units, there’s always something great for sale.
On a drive up to Turtle Bay for a disappointing lunch at Roy’s Beach Shack, I drove right past 55-249A Kamehameha Highway in Laie on the Hawaiian island of Oahu. I drove past, because from the road, the home is nearly invisible, tucked into its own oceanfront pocket tropical forest on about two-thirds of an acre.
The home just popped on the market with Erik Hinshaw of Hawai’i Life Real Estate. Readers will recall it was Hinshaw who showed me around the $71 million in penthouse “porn” you read about earlier in January. During that visit we got to talking about this property. But enough dish, here are the specs: it’s a 2004-built home with three bedrooms and three bathrooms totaling 2,464 square feet of living space and is being offered for $2.4 million.
Honolulu’s Gold Coast at the foot of Diamond Head crater
Last month I wrote an Oahu market update detailing the prior year’s slight price appreciation. I also pointed out that it takes hard work to lose money in Hawaii if you have time. In other words, don’t buy high and sell low as the Dallas Police and Fire pension funds did. But all those number-y things get confusing, so here’s a concrete example of how two units in the same building have performed over time (spoiler: GREAT).
Welcome to Waiea where two penthouses kiss the Pacific Ocean for a combined $71 million. It was here that we met Erik Hinshaw of Hawai’i Life Realtors to view these two staggering properties (the same Hawai’ian Life featured on HGTV). We? Yes, coincidentally, Dallas high-rise Queen Sharon Quist with Dave Perry-Miller Real Estate was in town poking around with a client and joined me on the tour.