LIHU‘E — Lenders in the state of Hawai‘i wrote the biggest residential home loans in the country on average this year, a lending report released Thursday reveals. The average closed-home loan amount in Hawai‘i was $677,299, which is significantly higher
LIHU‘E — Lenders in the state of Hawai‘i wrote the biggest residential home loans in the country on average this year, a lending report released Thursday reveals.
The average closed-home loan amount in Hawai‘i was $677,299, which is significantly higher than second-place Washington, D.C., at $393,453 and more than three times the national average of $222,261, according to LendingTree.com.
With an annual percentage rate of 4 percent, Hawai‘i’s average monthly payment on a 30-year mortgage (with one point) is approximately $3,234 before taxes and insurance, the report states.
Comparatively, the national average monthly payment for a loan with the same terms would be about $1,061 per month, according to the report.
But jumbo loans aren’t the norm on Kaua‘i, says Michael Olsen, president of the Kaua‘i Board of Realtors, and Tom Vallatini, senior loan manager for the Kaua‘i Government Employees Federal Credit Union. They said the state figures most likely reflect lending activity on O‘ahu.
“People are spending their cash reserves on higher end homes,” Olsen said. “A lot of sales are cash these days.”
Vallantini said, “We do some $650,000 loans, but on average it’s $325,000, or in the $375,000 to $400,000 range … I’ve noticed that the pricing for sales has gone down, if anything.”
He added that the new Dodd-Frank regulations have considerably slowed the volume of home loans at most banks , and it’s expected to get worse as Fannie and Freddie guidelines tighten.
“The Dodd-Frank Act alone has over 400 changes,” he said, “and they’ve implemented only 37 of them so far.”
The Kaua‘i Government Employees Federal Credit Union has had to update its policy manual, and it’s now 600 pages, he said.
By the MLS numbers
November Multiple Listing Service statistics for residential home sales show a mixed report for Kaua‘i.
Year-to-date median sales price is $422,000, an 11 percent decline over last year. The month-over-month price has fallen 16 percent to $379,000 compared to November 2010.
Yet, the year-to-date sales volume has increased 22 percent to $258.24 million, and month-over-month volume is up 89 percent, to $55.63 million.
The number of sales year-to-date has increased 6 percent to 336, and month-over-month sales have increased 5 percent to 42.
Big deals
However, just one large real estate transaction can skew annual figures for median home prices, average loan amounts and volume.
For example, actors Will Smith and his wife, Jada Pinkett Smith, sold their 2,200 sq. ft., two-bedroom, three-bath Hanalei house this month for $20 million. The house, built in 2006, includes a swimming pool, a hot tub and seven acres of oceanfront property with views of Secret Beach.
The couple purchased the property in 2009 for $13.5 million, thereby clearing a $6.5 million profit for their two-year investment.
Roni Marley of Hawai‘i Life Real Estate represented both buyer and seller, making it possibly the largest real estate transaction in Kaua‘i history for an agent, according to Hawai‘i Life.
There have been only four other residential sales of $20 million or more on the island, all of which included several hundred acres.
The story, which The Wall Street Journal broke on Dec. 23, stated the house was never officially on the market, and the buyer’s identity could not be learned. A real estate insider told The Garden Island a Russian billionaire purchased the property but did not reveal his name.
• Vanessa Van Voorhis, staff writer, can be reached at 245-3681, ext. 251, or by emailing vvanvoorhis@thegardenisland.com.
