Summer's Here!
June 24, 2008
This is officially the thrird day of summer, which is a bit hard to believe as I sit here on our Hilo hills lanai where the thermometer is reading a chilly 68 degrees! Wassup?!
OK, I've been reminded that another update is due, so here it is. Actually, one reason I haven't put up any updates in the last few months is that there isn't a whole lot to update.
To say that prices on everything are going up at an obscene rate is not news. The only upside in that picture is that housing prices are going down while everything else goes up. But then that's only partly good news, because unless you have an exemplary credit rating, a solid job with a good track record and you're willing to put up your first-born child as security, you can just about forget about getting a mortgage.
Well, not really. But close.
Even if you have all the above qualifications in place, the house you are trying to buy will have to pass new, rigorous tests, as well. The appraisers on whom the mortgage companies rely have been issued new rules in assessing the value of a property, and in many areas of Hawaii, some of these rules make things really difficult. A significant challenge seems to be finding "comparables," which have to be recorded sales of what the rules dictate to be comparable. That means the comps have to be in the same vicinity; and the square footage, lot size, age of the house, type of construction all have to be the same within new, tighter limits. If the house is older than a specified age, wiring and plumbing upgrades will have to be in place to get any insurance, and the insurance binder has to be in place before the loan application can be processed. Most of these criteria have always been in place to some degree, but now the limits are much tighter and more difficult to achieve. As usual, the nefarious past dealings of few greedy people have made things difficult for everyone else.
In spite of what you might hear and read about interest rates that are still coming down, they are higher now than they were a year ago.
House prices in most areas are definitely still coming down, and there are some real bargains out there now. If you're in the market and have anything less than the credit ratings specified above, shop around to several mortgage brokers until you find one with a "can-do" attitude. Some brokers won't even talk to you unless you come in with a 720-or-higher credit rating, but others will work with you and perhaps have more or better options available to them. Don't give up just because somebody says it can't happen.
If you are self-employed, it gets even trickier. Self-employed folks usually have to get "stated income" mortgages. Do not despair, though, because there are mortgage brokers who can make these work, but you will definitely need a credit rating of 720 or higher to qualify.
We're now seeing homes in the low $200,000 range more often and even some below the magic $200K figure. These are not junkers, either!
Coqui Update
The coqui situation on the Big Island continues to get worse on a daily basis. We had practically none when we moved to our present home two years ago. Fast forward to today: Our new evening pastime is spraying coqui, one at a time, as they appear seemingly out of nowhere. Everywhere you go now, there are coqui. If you find a place where there are only a few, give it a month or two. In many areas they are so well established that it is difficult to carry on a normal conversation over the noise.
The Big Island is evidently the only Island where the County "didn't care" when the infestations began and everyone was clammoring for some County assistance to get rid of the frogs. All of the other Islands have them under control and have had from the beginning. Curiously, around Hilo, the worst infestations are on County properties.
It is strictly up to us taxpayers now to take care of our own coqui issues, and it is a losing battle. The only solution, it seems is to get used to them. Lots of folks we talk to have done just that and they say the noise no longer bothers them. I have to agree that the noise of thousands of them in concert is less annoying than having one or two close by.
Back to affordable living . . .
The fuel-cost thing . . . is here to stay. Well, at least that's the prediction of most of the financial world. After all, we have convinced them that we'll pay anything they ask for that life-blood of our society, so why not keep raising the price? The sad thing is that it really does impact every aspect of our lives, not just the gas we put in our vehicles.
If you need a rationale to ease the pain, consider that the cost of fuel, even at $5/gallon, is not out of line with the cost of everything else over the last few years. How much were you earning when gas was $2/gallon? Just about everything you can think of costs twice now what it did ten years ago, so why not gasoline?
Gas in the US has actually not kept pace with inflation at all. I spent some time in New Zealand in the early '90s and gas was $1/liter there. That's pushing $4/gallon, and that was some 15 years ago. So does that make you feel any better?
It is, however, still possible to live here affordably without going without. If most of us just eliminated most of our wasteful ways, we could save a bundle right there.

* Don't make a special trip to the store for one or two items.
* Turn off lights you are not using.
* Use energy-efficient lights wherever possible.
* When in your car, open the windows on a nice, warm day instead of using the A/C. It saves fuel.
* Don't rush out and blow $20,000 (plus interest) on a new car that might get a few miles per gallon better mileage.
* Shop sales. Don't buy the $8 milk when there's also $5 milk in the same cooler.
* Don't go to Wal-Mart for all your needs just because you assume everything is cheaper there. It isn't. Same for Home Depot or any other so-called big-box store.
* Don't buy bottled water! If you must drink water out of little bottles, buy one case and them refill the bottles with water out of a filter pitcher. It's the same stuff.
* Try to buy pre-owned stuff. You can save a ton of money by not having to have everything brand-new and the latest model.
* Change your phone service to VOIP. It's a fraction of the cost of regular service.
* If you eat out a lot, go to lunch instead of dinner. In many cases, it's the same product at much less cost.
* Buying a car? Get the best one you can afford for cash. Stop paying all that interest. Also, a slightly older car will already have much of the depreciation paid for by somebody else. Depreciation, not gasoline, is the biggest car expense for many people.
* If your home doesn't already have it, install solar water heating. With all the tax credits, the payback is quick.
* Instead of expensive hobbies, take up paddling, hiking, snorkeling, diving, etc.
* Use common sense!
All the rest of the "affordable living" ideas in Affordable Paradise still apply, and if you have any particular concerns, opinions, questions or whatever, please post them at the Affordable Paradise Blog! <http://affordablehawaiiliving.blogspot.com/>
And in the meanwhile, please, please,
And in the meanwhile, please, please,
Live Aloha!
Mahalo for "listening."
Skip Thomsen & Ohana
Updated 6/24/08