Thursday, February 13, 2003

dusted off

As new home sales surge,
old real estate projects are
now getting a new life

By Lyn Danninger

Hawaii developers, seeing an opportunity, are scrambling to build new homes and dusting off projects put on hold when the real estate market lacked the strength of today.

Buyers last year entered into 2,217 sales contracts for new homes -- a 30 percent increase over 2001 and the largest jump in five years.

Castle & Cooke Homes, which delivered 527 new homes last year, projects it will complete 660 new units in 2003, company President Bruce Barrett said.

Site work is being completed on the company's newest development, called the Renaissance in Waipahu, which will eventually contain 230 homes. It is at the end of Managers Drive, just across the highway from Waikele. Of 22 homes released for sale in January, the company got 21 reservations on its first day, he said. The first homes will be ready in August.

At another Castle & Cooke project, the Havens at Ii Vista at Mililani Mauka, 80 townhomes were built some years ago. But now, with a new design, the company plans to unveil another 280 units over the next three years. The first of those homes will open in June, Barrett said.

Mike Jones, Schuler Homes Hawaii Division president, said the company will begin the third phase of an existing project at Makakilo, called Seascape, which had been on hold for about four years.

It also plans on moving down the road to Maili where it will restart an existing project called Sea Country that it had put on hold. It is already starting to build models for the new homes, Jones said.

The first community within the development, called Pookela, contains about 150 existing homes built in the mid-1990s before the market softened. Jones said he will add 66 new homes to that development.

A second new community, called PaleKai, will starts with 88 homes. The company plans to build a recreation center and, if given zoning approval, a small commercial development in the project.

Jones said he believes the price of the new homes, starting around $200,000, will fill a much-needed section of the market. Single-family homes range from 1,100 to 1,500 square feet.

"We're excited about it. We've had it for a long time so we'll see how they do and then bring on other parcels," he said.

Jones' optimism coincides with rising prices and sales contracts on Oahu.

The most popular single-family home projects last year were Castle & Cooke's Heritage development in Mililani, with 195 sales, followed by developer Burt Kobayashi's Kapolei Kai project, which garnered 176 sales contracts.

Buyers paid $60,768 more for their new homes last year, bringing the average price of a new home to $358,430.

The number of completed home sales -- as opposed to contracts taken out -- also showed an increase, up 12 percent to 1,553 from 1,383 in 2001.

But the number of completed sales still has a way to go before reaching levels set in 1993, when 3,600 contracts for new homes were completed, said real estate analyst Ricky Cassiday.

"We're halfway there and developers are feeling good. Yet remember -- relative to historical times when the new homes market was 43 percent of the total of all home sales, both resale and new -- today it's more like 15 percent," he said.

The disparity tells Cassiday that there is room for growth in the market.

Given the demand, he predicts new home production will reach much higher levels, especially for condominiums.

"We'll continue to see good single-family home sales but the real movement will be in the new condominium market," he said

Cassiday predicts solid growth in luxury condominiums, citing sales activities of Ko Olina developers Brookfield Homes and Armstrong Builders.

"Armstrong sold real well as did Brookfield, who still has a lot more condominiums to sell. With the new Ritz Carlton hotel set to go in there, that will only increase what is already strong demand."

Projects popular with buyers in other new housing categories, such as single-family homes in condominium developments and multi-family housing projects, were Castle & Cooke's Heritage in Miliani and once again, Kobayashi's Kapolei Kai development.

For multi-family projects, Haseko's Mariners Place in Ewa led the way with 104 sales in 2002 followed by Armstrong's Kai Lani project in Ko Olina and Stanford Carr's Peninsula Villas in Hawaii Kai.

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