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Home, condo
sales soar as
prices drop

The March figures continue
an upward trend that has been
in place since July 1997

By Russ Lynch
Star-Bulletin

Sales of previously owned homes on Oahu soared again in March and builders of new homes say their business also is booming.

Reporting only on sales of existing homes, the Honolulu Board of Realtors said yesterday that 231 single-family homes changed hands in March, a 19.1 percent rise from 194 in March 1999.

Prices were down, however. The median price among single-family homes last month was $282,500, a 4.2 percent decline from the $295,000 March 1999 median, the price at which half the units sold for more and half for less.

Resales of Oahu condominium units last month totaled 309, a 29.3 percent increase from 239 in March 1999, and the condominium median price last month was $120,000, down 6.3 percent from $128,000 a year ago.

Peter Freeman, president and chief executive officer of the 3,500-member trade association, said March was the 33rd consecutive month in which the number of sales was larger than the year-earlier month.

"We've been on the upswing since July 1997 with no signs of letting up," he said. The inventory of available homes is falling and in some neighborhoods buyers are offering more than the asking price for homes, Freeman said.

For the year to date, 707 single-family homes have been resold, up 38.9 percent from 509 in the first three months of 1999, and 820 condominium units changed hands in the latest quarter, up 28.1 percent from 640 in the year-earlier period.

The association monitors sales through its computerized Multiple Listing Service, which does not cover sales of newly built homes.

There is no reliable count of new-home sales, but industry executives say they are also strong this year.

Schuler Homes Inc. said its business is way ahead of expectations for this year, helped by the fact that it has money, arranged earlier at favorable interest rates, that it can use to make loans for new homes at interest levels below the current market rates.

"We've had a terrific first quarter," said Mary Flood, Schuler vice president of sales and marketing. The company's Oahu business operations 94 new-home sales in the quarter, 38 percent more than the 68 it had projected before the period began, she said.

Sales were up in all communities and in both condominiums and single-family homes, Flood said. "And there were quite a number at higher prices," she said, citing the company's Classics at Waikele development, where prices range from $375,000 to $475,000.

She said fears of rising interest rates have motivated buyers. Also, "we had some forward commitments at below-market interest rates" and could offer home loans at 6 percent when the market was around 8 percent, she said.

"That's kind of our plan for this year," to have interest rates below market, she said.

Oahu's other big developer of new homes, Castle & Cooke Inc., late last year had sold so many homes that it was running out of inventory. It is spending $100 million to build new houses and townhouses at Mililani Mauka and Kunia.

Because it doesn't yet have inventory to sell and needs to do a lot of building, the company is reticent about its prospects.

However, Castle & Cooke has projected it will sell some 425 new homes this year and company officials say everything is on track to achieve that and possibly more.

Castle & Cooke also has forward commitments from lenders and says it also provides buyers with interest rates lower than the market.