STAR-BULLETIN / MAY 2001 Sales of new homes on Oahu continue to outpace builders' ability to keep up.

New-home sales
keep on climbing

The number of Oahu sales
jumped 43 percent during
a strong January

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By Lyn Danninger
ldanninger@starbulletin.com

New home sales on Oahu climbed past December's 5-year record 30 percent increase to jump 43 percent in January from a year earlier.

There were 179 sales contracts initiated in January, up 54 from January 2002's 125 sales, according to real estate analyst Ricky Cassiday. Home sale closings increased 12 percent to 140 for the month.

Buyers also paid more for their new homes in January compared with the previous year as sales prices edged up 14 percent to $389,7272 from $341,244 a year earlier.

Cassiday said the continued strong activity in new homes is a reflection of low interest rates and shrinking available inventory in the home resale market.

Moreover, owners who were stuck and not able to sell their existing homes because of high prices paid in the 1980s and early '90s are now able to sell up for a new home.

Still, in spite of the positive signs, Cassiday said he was surprised to see how much activity occurred in January -- traditionally a slow month.

"I was really surprised. I didn't think we'd have that many straight after Christmas," Cassiday said.

Mary Flood, vice president of sales and marketing for Schuler Homes Hawaii, division agrees.

"We never really had a slowdown, even during the holidays. We continue to have traffic up by about 30 percent," she said.

The total dollar volume of sales contracts written by developers in January jumped 57 percent to $64 million from a year earlier.

With demand so great, developers are having a hard time keeping pace.

"Our sales have far outpaced our ability to deliver," Flood said.

When asked the reason for the purchase of a new home, most buyers site interest rates, she said.

"They can afford so much more than they could when it was 7 or 8 percent," she said.

Moreover, with new home warranties and the possibility of upgrades such as top-of-the line appliances, carpeting, flooring and other features into the loan, new homes present an attractive alternative.

Flood said Schuler has 350 new homes in escrow waiting to be delivered. To meet the increased buyer demand, the company has opened seven new projects in the last seven months and continues to sell about 50 new homes per month.

Top sellers among Oahu's various new home developments during January were the Gallery in Royal Kunia with 23 homes sold followed by The Heritage in Mililani with seven sales.

The highest priced single-family homes were sold in Hawaii Kai's Peninsula Executive Homes by developer Stanford Carr.

Homes there sold for an average of $919,000, followed by $694,000 average list price at Hawaii Kai's Leolani developed by Schuler Homes.