Experts expect pause
in Oahu home salesBut Realtors predict the pace
will pick up after the holidays
Some experts expect the pace of sales in Oahu's residential real estate market to slow over the Christmas period, but observers agreed it is unlikely to run out of steam any time soon.
While single-family homes sales on Oahu slowed last month for the first time since April, prices continued to soar and condominium sales and prices continued well ahead of last year's.
Bill Chee, president of Prudential Locations LLC, believes that unlike last year, Oahu will experience some seasonal slowdown in sales during Christmas.
"I think (the market) will have the tendency to be a bit more seasonal again this year. Last year, the forces were just too strong," he said.
A total of 380 single-family homes changed hands in October, one less than the 381 sales of October 2002, but the median price of $399,300 was up 12.5 percent from the year-earlier median of $355,000.
The slight slowdown in single-family home sales was primarily a reflection of a lack of available inventory, according to Chee.
"It's not an indicator that the market is slowing down. So in this case, I wouldn't overinterpret it," he said.
Leeward area Realtor John Riggins of John Riggins Realty agreed.
"Our problem is not enough inventory in single-family homes. Right now it's at about 2.5 months. That's the lowest we've had, so the problem is for sellers finding another home to move to. That's also why we're seeing the number of sales in condominiums and townhouses," Riggins said.
Condominium resales totaled 669 last month, up 27.7 percent from 524 in the year-earlier month, and the condominium median price was up 16.7 percent at $185,000, compared to the $158,500 October 2002 median.
Prudential's Chee said the growing influence of investors is helping to fuel condominium sales.
"Primarily it's people now re-thinking their investments, perhaps coming over from the stock market," he said.
Chee points to the recent hotel to condominium conversions in Waikiki as ideal for investors.
Still, he believes the number of investors in condominium and townhomes is not yet the majority of the market.
"In the 1970s, half of the condo market was purchased by investors -- and that was without the Japanese -- so we're not even close to that level," he said.
Despite the tiny dip in single-family-home resales, the year-to-date total of 3,675 is a record and a 13 percent gain from 3,252 single-family resales in the first 10 months of last year, according to the Honolulu Board of Realtors, the trade association that issued the figures today.
Condominium sales, up 29.7 percent for the year, also set a 10-month record of 5,769, compared to 4,447 in that period last year.
The total dollar volume of house and condominium sales so far this year was $2.91 billion, up 35.3 percent from $2.15 billion at the same time last year, said Mary Begier, Realtors president.
"The low cost of financing real estate purchases continues to be the main factor in our housing market," said Harvey Shapiro, the association's research economist.
Shapiro said the Federal Reserve has given no indication that rates will rise any time soon and "we should expect mortgage rates to remain affordable well into 2004."
The Board of Realtors reports only sales of previously owned homes, which it gets from its computerized Multiple Listings Service. It does not gather statistics on new homes coming on to the market for the first time.
