project put on hold
But as Makai Village is delayed,By Rob Perez
Schuler Homes begins another
housing project in the same area
The developer of a planned housing project at Kapolei has put those plans on hold because of the sluggish market.
But another builder has started work at a nearby site and expects to begin selling homes in a new subdivision early next year, hopeful that the market is picking up.
The contrasting actions by the two developers provide more conflicting signals on whether Oahu's seven-year real estate slump is coming to an end.
Weakness in the market recently prompted Makai Village Partnership to put the residential portion of its 186-acre project on hold, according to Kathy Inouye, president of the company.
Makai Village is planning a 653-home project in what is considered villages 7 and 8 of the state-planned Villages of Kapolei, the centerpiece of government efforts to steer growth to West Oahu.
The master-planned community now has about 2,350 homes, half the planned total.
The state originally had expected construction on the Makai Village homes to begin this year.
"We still feel very good about our villages," Inouye said. "We just don't feel the time is right for this year ... We're looking for more positive trends."
Despite the market weakness, Schuler Homes Inc. has started grading land along Farrington Highway across from the villages for the 425-home Kapolei Knolls and expects to complete the first houses in second-quarter 1998.
It will be the first Kapolei housing project built outside the villages and the first without financial assistance from the state.
Mary Flood, Schuler's vice president of sales and marketing, said the three- and four-bedroom homes will start in the high $200,000s. The company doesn't have precise prices yet because it still hasn't decided on the models it intends to build, even though construction is set to start around the beginning of the year.
Not having firm plans so close to construction is unusual but an indicator of how difficult the market is, builders say.
Schuler hasn't firmed up details because it still is evaluating market research, wanting to be certain it offers what today's more discriminating buyers are looking for, Flood said.
Buyers can be especially picky in Leeward and Central Oahu, where the bulk of the island's new homes are being built and where the housing slump has hit the hardest.
But Flood said the market is showing signs of improvement, including significant increases in closings for $250,000-plus homes at Aeloa in Kapolei and West Hills in nearby Makakilo.
Developers, however, have had to reduce prices or offer considerable incentives to attract buyers.
"We're just hopeful that (the increased sales activity) is a trend rather than a blip," Inouye said.
While Makai Village has put its housing project on hold, the company still is moving ahead with plans to build a middle school within the development site, Inouye said.
The partnership is negotiating a development agreement with the state and expects to complete construction in time for the fall 1999 school year.
Inouye believes the school will be a major marketing asset when her company starts selling its homes. The middle school also is expected to help overcrowding at Kapolei Elementary. Kapolei's sixth-graders would be moved to the middle school.
But with about 2,400 homes still to be built in the villages -- plus the 425 in the Schuler project -- Kapolei Elementary Principal Michael Miyamura worries the overcrowding problem will worsen. "It's a concern for me because right now (the effects on enrollment from future development) are unknown," Miyamura said.
The Department of Education is projecting enrollment at the elementary school, which currently has 935 students, will top 1,100 by 1999, though that number likely will be reduced because of the slower-than-anticipated housing development.
Once on-going construction at the elementary school is completed by mid-1998, its capacity will be about 850 -- well below today's current enrollment.
To help alleviate the overcrowding, the school tentatively plans to switch to a year-round multi-track schedule (not all students attend classes at the same time) in July.