Honolulu homes
still the priciest
in U.S.

But the $313,000 median here
is down 4.5% from last year

From staff and wire reports

Prices for existing homes in Honolulu fell 5.4 percent in the year ended in March, but the isle market still remained the nation's most expensive, the National Association of Realtors said today.

The drop, which brought Honolulu's median price to $313,800, bucked the national trend.

The median price of existing homes nationally rose 4 percent to $119,400, meaning the value of many middle-class Americans' most important asset on average rose faster than inflation.

That wasn't the case in many Oahu markets. Local homeowners have seen prices drop for the past several years, especially in Leeward and Central Oahu where new homes are helping create a drag on the market. Some experts see local prices flattening out at best for 1997.

"We're in a leveling-off stage," said Lou Pritchard, owner of International Investors Realty in Waikiki. "We have almost reached the bottom."

In the more robust East and Windward Oahu markets, where few new homes are being built, single-digit appreciation is expected this year.

Nationally, the biggest price gains in the NAR survey were reported in the Midwest and South. In the Midwest, the median jumped 5.6 percent to $102,000, double the 2.8 percent inflation rate over the period. The South did well too, posting a 3.9 percent gain to $102,900.

After Honolulu, the second most expensive market was San Francisco, where the median price rose 7.5 percent to $271,100, reflecting the booming computer and high tech industries.

Housing markets in the Northeast were more sluggish, with the median rising 2.2 percent to $141,700. In the West, the median increased 3.1 percent to $153,700.

"In the Midwest, manufacturing is doing well and when the (local) economy is doing well, the housing market will do pretty well too," said economist Kim Kennedy of Cahners Economics in Newton, Mass.

Home prices nationally should continue to advance faster than inflation in the next year, though not quite as much as 4 percent, Kennedy and other analysts said.