Home sales
hit recordLast month saw 393 single family
homes sell, the largest number since
records were initiated in 1987
More single-family homes changed hands in May than in any other month since the Honolulu Board of Realtors began keeping records in 1987. However, a real estate economist said moderate price appreciation in the housing market should prevent a repeat of the Japanese bubble.
Resales of single-family homes rose 7.1 percent in May to 393 from 367 a year ago, marking the most activity since 381 were resold in August 2002. But the median sales price edged up just 1.4 percent to $365,000 from $360,000 in May 2002. That marked gains of 0.7 percent from $362,500 in April and 4.3 percent from $350,000 in March.
Oahu condominiums also continued to be snapped up at a torrid pace as 564 units changed hands, matching March's 13-year high and representing a 20.5 percent increase from 468 condos resold a year ago.
Prices of condos rose 14.5 percent in May to a median of $166,000 from $145,000 a year earlier. That was up 0.6 percent from $165,000 in April but down 1.8 percent from a 12-month high of $169,100 in March.
Harvey Shapiro, research economist at the Honolulu Board of Realtors, said low mortgage rates continue to make housing one of the strongest sectors in the state economy.
"Both sales and prices are climbing but, in contrast to the Japanese bubble period more than a decade ago, prices are advancing at a much smoother rate," Shapiro said. "This slower rate of increase allows prices to be absorbed more easily into the market. Hence, we do not anticipate the kind of price declines we experienced after the Japanese bubble had run its course."
Condos, which are the purchase of choice among real estate investors, are now up 31.4 percent from a year ago with 2,589 resales through the first five months of 2003.
"Generally, when condo sales are so high, that means there are investors in our market," Shapiro said. "Investors tend to invest in condominiums rather than single-family homes because they're easier to maintain."
By contrast, the 1,587 single-family home resales in the first five months are up just 6.3 percent compared with the first five months of 2002. "It probably just goes along with the lower mortgage rates," Shapiro said. "The mortgage rates are at a 41-year low and this makes homes more affordable for people."
Shapiro said the likelihood of Oahu's housing market remaining robust is dependent on the Alan Greenspan-led Federal Open Market Committee.
"Should mortgage rates turn up, that should slow down our housing market," he said.
