Thursday, January 21, 1999

Oahu new-home
sales decline
another 4.8%

Although the average
price rose slightly, houses in
some areas have gotten
more affordable

By Rob Perez


Slow, slow, slow.

That's still an apt description for the Oahu market for new single-family homes.

While sales of existing homes have been on an upswing for 18 consecutive months, the market for new houses has been moving in the opposite direction.

Through the first nine months of 1998, the latest data available, the number of new single-family homes sold on Oahu totaled 517, a 4.8 percent decline from the comparable period in 1997, according to Prudential Locations Inc.

And the 1997 total of 543 was down significantly from the previous year's 770, which was off substantially from the 1,093 houses sold in the comparable 1995 period.


Industry officials expect little change this year, largely because the economy is so sluggish. They're hopeful, though, that prices have stopped falling, especially in the West Oahu market, where a glut of new and existing homes have hurt values.

"I think prices have stabilized," said Mike Sklarz, head of research for Prudential. "I don't look for much more erosion."

Such a leveling won't come soon enough for many recent buyers.

In the Makakilo subdivision of West Hills, for instance, prices have dropped steadily the past several years. One new three-bedroom, two-and-a-half bath home is on the market for $259,000, a 15 percent drop from the $303,000 that identical models fetched in early 1997.

Through the first nine months of last year, the average selling price for new houses on Oahu actually rose 2.3 percent, going from $317,317 to $324,759, according to the Prudential data.

But the increase doesn't mean prices are strengthening, only that more higher-priced homes sold last year than the year before, boosting the average, Sklarz said.

Some builders, however, said they are seeing encouraging signs of strengthening -- or at least stabilization.

Castle & Cooke Inc. had some price reductions the first half of last year but not the second half, said Bruce Barrett, the company's sales manager.

Yet Castle & Cooke ended 1998 with a 5 percent sales gain, including multifamily homes, Barrett said. The company expects a slight increase this year, he said.

Barrett said the company's high-end houses, which start at $370,000, are selling as well as its lowest-priced ones.

Mary Flood, vice president of marketing and sales at Schuler Homes Inc., likewise said her company's best-selling project is its highest-priced one, The Classics at Waikele, which has homes for about $350,000 and up.

Longtime local homeowners who have lots of equity in their current homes and want to move up are among those buying the more costly units, Flood said.

Two-professional couples and executives relocating from the mainland also are fueling the sales activity, she said.

But like many other builders, Schuler has had to make adjustments because of downward pricing pressures.

At its Kapolei Knolls project, where homes start at roughly $285,000, Schuler next month will begin offering models priced around the mid-$200,000s or lower, Flood said.

While overall sales of new houses have fallen, activity in the multifamily sector has soared. Through September, new condo sales jumped 39.4 percent, to 948 units, according to Prudential. The average price fell 8.4 percent to $217,616. Three projects -- One Archer Lane, Queen Emma Gardens and 1450 Young St. -- accounted for nearly half the sales total.

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