Home prices on
Oahu take off

The median price hit $360,000
in May and sales soared 34.9%
as mortgage rates fell

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By Lyn Danninger
ldanninger@starbulletin.com

Housing resales continued to proliferate in May, at a level that is putting the squeeze on supply.

The median price of a single-family home on Oahu last month jumped 24.4 percent to $360,000 from May 2001.

Meanwhile, the number of resales surged 34.9 percent to 367 from 272 a year earlier, according to figures from the Honolulu Board of Realtors.

Resales last month also rose 13.6 percent from April, when 325 single-family homes were sold.

With declining available inventory, John Riggins of West Oahu's John Riggins Realty expects housing prices to continue to rise.

"There is much more demand out there than there is supply," he said. "As long as we have that, we'll see prices rise."

Riggins said his biggest challenge is the lack of available properties.

"I don't have enough properties to sell," he said. "Right now you can sell just about everything you list."

Moreover, Riggins said, because interest rates are so attractive, buyers in some cases are willing to pay a little more, even if the seller may have overpriced the property.

"There are people who still overprice properties, but the difference is that some of those properties are selling. Buyers realize the market is going up, so the price they pay today would be market price in perhaps six months or a year from now," he said.

Condominium resales also rose in May, increasing 17 percent to 468 sales from a year earlier.

The median sales price rose 8.2 percent to $145,000.

Guy Tamashiro, chairman of the Honolulu Board of Realtors, attributed much of the activity to bargain mortgage rates.

"The climate for housing sales continues to be fueled by historically low mortgage rates and, for the first time in many years, the expectation of property appreciation," he said.

Year-to-date, 1,493 single-family homes and 1,970 condominium resales had taken place by the end of May, a 14.1 percent increase for homes and 14.9 percent jump for condominiums from the year-earlier period.

Total dollar volume so far this year jumped 20.4 percent to $927.8 million from a year before.