GEORGE F. LEE / GLEE@STARBULLETIN.COM
Brookfield Homes' Coconut Plantation in Ko Olina is one of the top-selling projects on Oahu.
New home sales jump
Oahu new home buyers continued their buying spree during the first quarter, entering into 593 new sales contracts with developers -- up almost 38 percent over last year.
Schuler Homes' Hawaii Kai development Nanea Kai and Brookfield Homes' Coconut Plantation in Ko Olina tied for the best-selling multifamily project.
The best-selling single-family home project was Royal Kunia Gallery by Castle & Cooke Homes, followed by Gentry Homes Tiberon project in Ewa.
Sale closings also grew during the quarter, rising to 435 from 331 in first quarter of 2002 as developers scrambled to keep up with demand.
Real estate analyst Ricky Cassiday, who computed the data, noted that the first quarter saw the largest growth in both sales and closings on Oahu in the past seven years.
Mary Flood, vice president at Schuler Homes, said that the company entered into 84 new sales contracts for the first quarter of 2002, but by the end of first quarter of 2003 had increased that number 65 percent to 129 new contracts.
Similarly, at Castle & Cooke Homes, Vice President Bruce Barrett noted both sales and home deliveries have increased.
"Our sales are up 23 percent," he said.
Deliveries of new homes increased by about 18 percent for the period, Barrett said.
For both companies, waiting lists and buyer lotteries are now common.
"A year or two ago lotteries started on certain product lines, but this year it's been a part of all the market because of the demand," he said.
Schuler's Flood said that for each of the company's 13 community projects, there are anywhere between 200 and 400 people on the waiting list for a home.
Average new home prices, which include single-family and multi-family developments, rose almost 18 percent to $402,141 this quarter from an average of $341,270 last year. By contrast, the average resale price of a home was $236,465 for the first quarter, up 11 percent from the average of $212,998 in first quarter of 2002.
Still, developers maintain that overall, with low interest rates and shrinking resale inventory, a growing number of buyers are perceiving new homes as the right investment at the right time.
Schuler Homes' Flood notes new-home price increases have not reached anywhere near levels seen in certain segments of the resale markets.
"I believe we've probably raised ours by about 10 percent from the same period last year," Flood said. "I think that's why new homes are still a bargain because developers have not raised home prices as fast. That's also why there are such things as lotteries happening."
With such demand and continuing low interest rates, developers are predicting another banner year in new home sales.
"Last year we delivered a little over 500 homes, this year we are projecting to close over 650 homes," said Castle & Cooke's Barrett.
While the company has no new projects under way other than what it is already undertaking in Mililani and Kunia, Barrett said Castle & Cooke is open to further development if demand hold.
"We don't currently have anything in the planning stage but we are looking for additional opportunities to build new communities," he said.
For Schuler Homes, it's a matter of moving on to other projects on Oahu and in various stages of completion on the neighbor islands.
"We have two more parcels in Makakilo, one single-family and one condominium," she said.
In Nanakuli, there is also room for an additional 750 homes in another long-held development the company re-activated to meet increased demand, Flood said.
The company also has plans for an additional multi-family development in Hawaii Kai.
When newly constructed home closings and resale home closings were combined, there were 2,782 total closings for the quarter, up 28.3 percent from the 2,168 in first quarter of 2002.
