Ewa- lution

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CINDY ELLEN RUSSELL / CRUSSELL@STARBULLETIN.COM Heavy machinery cleared the way last week for homes in Gentry's Prescott II subdivision in Ewa near Sgt. Carlos Cambre's home.

Buying power among Hawaii's
military hits home in Leeward Oahu

Back from Iraq, Platoon Sgt. Carlos Cambre traded his Army tent for a three-bedroom, 2 1/2 bath house in the new Prescott II subdivision in Ewa. He now wakes every morning to the sound of power tools, lumbering trucks loaded with wood and roofing materials and the shouts of construction crews.

Cambre returned from the war in February to join a growing number of veterans making their way into Oahu's tight housing market.

VETERANS BUYING Hawaii new home appraisals by the Veterans Benefits Administration:   # Change from '04 January-March '05 195 44% March '05 72 55% Source: Veterans' Benefits Administration Regional Office, Hawaii.

New government laws, an improved economy and continued low interest rates have armed them with more buying power than they've had in the past two decades and created a mini military housing boom in Leeward and Central Oahu.

"When you are off fighting a war, you learn to appreciate what you can do as an American citizen and the opportunity to buy a home is one of our primary rights," Cambre said. "A lot of the guys who were with me in Iraq said they wanted to buy homes or condos or townhouses when they got back."

The wars in Iraq and Afghanistan have created more interest in veterans' benefits and have made more of Hawaii's active-duty military eligible to buy into the market, said Tom Serocca, a loan guarantee officer with the Veterans Benefits Administration Regional Office, which serves clients in the Hawaii and the Pacific.

In addition, the Veterans Benefits Improvement Act of December put more money in the pockets of Hawaii's military by increasing the basic housing allowance an average of 24 percent and more than doubling maximum VA mortgage loan amounts to $539,475 from $240,000, Serocca said.

The changes have provided a way for some military buyers to get into the housing market at lower interest rates by using one of two new VA adjustable-rate mortgage loan programs that guarantee fixed rates for three or five-year terms, the typical length of a military rotation, he said.

"All of a sudden people who were not able to participate in Hawaii's housing market are becoming major players," Serocca said. "We've given them up to half a million dollars to play with -- now the only issue is the supply."

The changes already have increased first-quarter VA loan amounts in Hawaii by 44 percent from a year earlier, but there's no end in sight, Serocca said.

"Everything shows me that we are increasing at a growing rate despite the tightening market and the threat of rising interest rates," he said.

The impending arrival of the Stryker Brigade, five C17A Air Force transplant planes and the potential for Hawaii to get a major aircraft carrier group with escort ships is only likely to fuel the military home-buying market, he said.

"We've got a robust economy and all signs indicate that we'll have increased military participation in the housing market," Serocca said. "The only condition that could lead to a slowdown would be if supply can't keep with the demand."

The increase in military basic housing allowances has made it possible for even the military's entry-level enlisted, who would typically get in the neighborhood of $1,698 a month in housing allowance, to qualify for a mortgage to purchase starter homes and condos, which are selling for around $300,000 in Leeward and Central Oahu.

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CINDY ELLEN RUSSELL / CRUSSELL@STARBULLETIN.COM The Cambre family moved into their new Ewa home in February, shortly after Carlos, center, returned from Iraq. He posed last week with his sons Carwin, 11, left , and Carlos Jr., 15.

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The increase in loan caps also has made it possible for senior officers, who would typically net about $3,000 a month in housing allowances, to buy into more expensive markets in East and Windward Oahu.

Mark James, branch manager of American Home Mortgage, said in the past year he's seen military customers grow from 5 percent to 25 percent of the company's business.

"Last year, we had a lot of deployments and a lot of uncertainty," James said. "That seems to have stabilized and the military have become a significant and growing portion of our business."

James said he's seen an increase in loan applications from returning veterans and reservists as well as military families and young military members, who are choosing to pool their resources.

Oahu Realtors have seen a dramatic change in buying by military since the increases went into effect, said John Riggins of John Riggins Real Estate, who specializes in Leeward and Central Oahu real estate.

The two areas are sought by many military members because of their comparatively low prices and proximity to the bases where they work.

"The folks returning from Iraq and Afghanistan who didn't buy before they left are showing strong demand to get into this market," Riggins said.

While buying power and resources have increased for many of these military members, some of them are finding that it's still challenging to get into the tight housing market, especially newer properties, Riggins said.

Rising prices, skepticism on the part of some sellers to accept VA loan offers and limited inventory make it difficult, Riggins said.

"It's not uncommon for us to list a newer house on the Ewa side and wind up with multiple offers on the first day," Riggins said, adding he recently hosted an open house in Ocean Pointe and came away with six offers on the property.

"The lowest offer came in $5,000 above the $525,000 asking price," he said, pointing out that the selling price for that Ocean Pointe single-family home was near the cap for VA loans.

That's why some military members are eyeing conventional loan offers and are also becoming bigger players in these markets, too, James said.

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CINDY ELLEN RUSSELL / CRUSSELL@STARBULLETIN.COM Army Sgt. Carlos Cambre moved into his new $400,000 Ewa home soon after he returned from his 14-month deployment in Iraq.

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The recent rise in housing allowance, which is part of President Bush's push to make the military more able to survive in the open economy, has also increased the number of military buyers who are choosing no-down-payment mortgages, he said.

"Military buyers are finding that there are many quick turnaround loans, with very attractive terms, that require no documentation and no down payment," James said.

Strong growth in the military market has prompted conventional lenders to court these buyers, James said.

"I think the feeling in this business is that we need to treat veterans well and give them the attention that they deserve," he said.

The flurry of new opportunities allowed the Cambre family to buy a home, but emotional factors were also a strong pull, they said.

"You can't put a price tag on what it feels like to return to your own home after the difficulties of war," Cambre said.

For the nearly 14 months that he was fighting in Iraq, Cambre said he pictured his wife, Vanessa, and his two boys, almost always in their new $400,000 home, which was being built while he was deployed.

When Cambre returned to Oahu Feb. 9, his family immediately took him to see the new home.

"It was 3 a.m., but we didn't care," said Vanessa. "I had been dreaming of his reaction and it was everything that I'd pictured. It was a great homecoming."