Graphics by Kevin Hand, Star-Bulletin

Now they're hooked.

So much so that the couple sold their house and recently purchased a unit in One Archer Lane, a high-rise condo under construction across from Straub Hospital.

"We like it so much in town," said Yukio Haramoto, 68, a retired Gas Co. supervisor. "Everything is walking distance" or a short bus-ride away.

Builders are hoping there are a lot more people like the Haramotos, drawn by the convenience of living in Oahu's urban core.

Though sales of luxury dwellings are in the tank, developers are looking to the middle market to kick start sluggish condo sales in central Honolulu.

"We think the middle market is grossly underserved," said Jack Myers, chief executive of the Myers Corp.

Myers' One Archer Lane, with one- and two-bedroom units priced from roughly $230,000 to $370,000, is considered the first fee-simple high-rise aimed exclusively at the mid-range urban market.

It won't be the last.

Design work, for instance, is continuing on a 30-story project planned for the corner of Kapiolani Boulevard and Ward Avenue. Posec Hawaii Inc. is planning about 180 units priced from roughly $220,000 to $350,000, said Kenneth Park of AM Partners Inc., the project's architectural firm. Financing already is lined up and, assuming required government approvals are obtained, construction should start the first quarter of next year, Park said.

A number of much smaller - but similarly priced - condo projects are under construction or planned on small lots within a 10-minute drive of downtown.

Realtor Wayne Masuda, who has concentrated on selling new condos since 1990, said small developers are focusing on moderately-priced "in-fill" projects because that's where they can meet a niche need. Such developers shy away from Leeward and Central Oahu, where a plentiful supply of new homes has hurt demand, and "find small lots in town to build a few condos," Masuda said.

Masuda currently is marketing two fee-simple complexes planned in the Makiki area. Prices at Prince Lunalilo start at $164,500 for 505-square-foot, one-bedroom units, while two-bedroom, 528-square-foot condos at Royal Lunalilo begin at $179,500.

Even developers of the few upscale projects still in the works have been forced to rethink their strategies with the middle market in mind.

Nauru Phosphate Royalties (Honolulu) Inc. recently said it is reviving a planned high-rise project next to Ala Moana Center. The building originally was designed as a luxury complex but has been reconfigured so more than a quarter of the 432 units will be priced under $400,000. One-bedroom condos will start at about $225,000.

At Nuuanu Parkside, a luxury fee-simple project just minutes from downtown, the developer still is selling a handful of original condos four years after the 76-unit project was completed - and has slashed prices several times to stimulate sales.

In June 1995, prices were cut as much as 27 percent, then lowered again in January of this year. Two-bedroom units currently range from $383,000 to $428,000.

The resale market likewise has taken a hit - especially at upscale properties built during the real estate boom of the late 1980s and early 1990s.

Units in Imperial Plaza, the high-rise at the corner of Kapiolani and Cooke Street, have dropped as much as 50 percent in value since 1992. Two-bedroom condos there list for as little as about $350,000.

At One Waterfront Towers, one-bedroom leasehold units that sold from $360,000 to $500,000 in 1990 typically fetch less than $250,000 today.

Despite such price drops, home shoppers often bypass looking at luxury projects, thinking they could never afford to buy there, said broker Peter Chessen of Coldwell Banker Pacific Properties.

"People just believe (the condos) are a lot more expensive than they actually are," he said.

There's also the single-home factor. For almost the same price as a condo in town, buyers can get into a new house in the Leeward area - if they don't mind the commute.

Another factor: maintenance fees, which have risen dramatically in some older projects. At some nonluxury units, fees of more than $400 a month are not uncommon.

"The market has been pretty dismal," and high maintenance fees are one reason, said Jackie D'Orazio, a broker with Century 21 Realty Specialists.

D'Orazio said new condos being constructed in the urban area will only increase pressure on the resale market. Whether that will result in a continued drop in resale prices is uncertain. (Oahu's single-family market has shown signs of rebounding).

The government also has added to the growing inventory.

The Hawaii Community Development Authority, for instance, is selling studio and one-bedroom units in the Honuakaha affordable housing complex on Queen Street. Prices range from $150,000 to $187,000 for the 504- to 628-square-foot units.

Like elsewhere on Oahu, one of the hardest-hit markets has been leasehold properties. Because of uncertainties associated with rent renegotiations and lease expirations, the leasehold market has seen a big decline in sales and prices over the past few years, according to industry figures.

"It's taken such a beating, prices have come down so far" that there are good opportunities now, said broker Kai McDurmin of Coldwell Banker, which is selling downtown leasehold units in Executive Centre. Prices: $88,000 to $191,000 for condos ranging from 372- to 1,217-square-feet.

For new fee-simple projects, lenders are so wary of the slow market that they're requiring developers to pre-sell a lot more units than what was typically required.

Myers, for instance, had to pre-sell 70 percent of One Archer Lane before that project could begin construction. In the past, 50 percent was more typical. It took more than eight months to achieve the 70 percent threshold.

"The days of developers having overnight successes are over," Myers said.

For the urban condo shopper, that's good news. It means more bang for the housing dollar. And in one of the nation's most costly housing markets, every bit helps.

They're single. Thirty- or fortysomething. Make more than $50,000 a year. And don't rent.

If you want to know who's buying urban condos in Honolulu, that's probably a good general profile.

At least Jo Frasier, a broker with Prudential Locations, thinks so.

The majority of buyers at One Archer Lane, a 41-story, 331-unit condominium under construction near Straub Hospital, tends to fit those categories, according to data supplied by Myers Corp., the project's developer. One- and two-bedroom condos range from about $230,000 to $370,000.

Frasier, One Archer's sales manager, said she believes the project's buyers are typical of buyers in the overall urban condo market.

Only 28 percent are married. A like percentage are first-time home buyers. Nearly a third earn more than $100,000. Nearly half are Japanese. And only 20 percent are renters.

Where do the buyers come from? Few are from the commuter communities of Central, Leeward and Windward Oahu. The majority come from Central and East Honolulu.