One of the most popular questions I receive is, “how do I find affordable housing on Oahu?” Affordable housing is not easy to come by on Oahu because of the high demand and low supply. According to the Department of Business, Economic Development & Tourism, the median household income in Hawaii was $74,511 or 29.3% higher than the U.S. average in 2016. This is a positive statistic for incomes throughout the State. However, in this same year, the median monthly owner cost for owner-occupied residences with a mortgage was 50.7% higher than the U.S. average, which is the 3rd highest in the nation.
With these statistics it is not surprising that some families are deciding to move to other parts of the US to experience a lower cost of living. Yet, most of us who call Hawaii home are trying their best to make ends meet, and being able to find affordable housing is a big part of the equation. So just how does a person go about finding affordable housing? Here are three steps to consider.
- Clearly define your parameters. Most homebuyers do not know where to look because they don’t know what they are looking for. Being able to define the property characteristics that you are looking for is the first step to finding an affordable housing. Here are some basic parameters you should determine:
✓Proximity to work or school
✓Interior square footage
- Confirm your price range. Although we might go through a pre-qualification process with a lender, this does not mean that you know what is most affordable in your situation. Aside from understanding your maximum qualifying amount, you also want to know your comfortable purchase amount. For example, sometimes in the pre-qualification process a lender will not take into account private school tuition, or your daughter’s dance lessons. These and other extracurricular expenses are important and should be factored into your overall budget. Having a household budget and factoring in these other lifestyle expenses will help you to determine your affordable price range.
- Consider where you might be flexible. Although you might have an ideal picture of the property that you want to purchase, finding an affordable home requires you to be flexible. For example, perhaps you have imagined yourself in a single family home because you want a yard for your dog, but didn’t consider a townhome that provides a private courtyard. The price difference may be $200,000 between the two, and it places you in a more affordable price range. Another option is sacrificing interior living space in order to live in a more convenient location. By consulting with a Realtor and understanding where you might be flexible, you can find the home that you’re looking for at an affordable price.