Honolulu home
costs hit recordThe median price of single-family
homes reaches a high of $400,000
last month
Oahu's median single-family home price hit a record of $400,000 last month.
The January figure, released yesterday by the Honolulu Board of Realtors, surpassed the previous high of $399,300 for home resales reached in October 2003.
The median sales price for an Oahu single-family home for all of last year was $380,000, according to the board.
With lack of available inventory and favorable interest rates fueling sales, prices are likely to continue to climb, said West Oahu Realtor John Riggins of John Riggins Real Estate.
"It's the same old story, we just don't have enough properties," he said.
"The interest rates are good and then there's the continuing positive attitude people have about real estate as a good investment," he said.
January's median reflected an increase of 14.3 percent from a year ago's median of $350,000.
Sales activity was also strong last month. There were 342 single-family home transactions, an increase of 23 percent from one year ago's 278 sales.
While home prices may be setting records, Prudential Principal Broker Bill Chee said they would be substantially higher if not for the recent growth in residential development in Leeward Oahu.
"Back in 1990, there weren't a lot of houses out there," he said. "If you only measured existing inventory prices in 1990 and you took the same inventory today, I bet the average price for a home would be in excess of $500,000."
While condos initially got off to a slow start compared to the acceleration seen in single family-home activity in the last couple of years, they are making up for lost time.
There were 558 sales recorded during the month, up 17.2 percent over January 2003.
The median price for a condominium in January reached $187,000, higher than at any point last year and 18.1 percent ahead of January 2003's median of $158,300. But the latest figure is still behind the all-time high of $208,000 reached in October 1990 at the height of the Japanese bubble.
Single family homes, by contrast, passed the highest median price reached during the Japanese bubble last year. The median sales price for a single-family home during the bubble reached $392,000 in August 1990.
The median sales price for an Oahu condominium for all of 2003 was $175,000, according to the board.
The $308 million in total dollar volume of sales reached in January is perhaps the best illustration of just how much difference a year can make. The latest figure is 49 percent higher than the $207 million in homes sold during the same month last year.
Oahu can expect further growth in the market, especially in light of the recent decision by the federal reserve not to raise interest rates, said Harvey Shapiro, the board's research economist.
"In their meeting last week, the governors of the Federal Reserve hinted that interest rates may be going higher sooner than expected, although they left rates unchanged at their January meeting. The low mortgage rates therefore will tend to maintain the expansion in the housing market that we've been experiencing," he said.
Though mortgage rates are tied to long-term lending rates, not the short-term bank rates set by the Federal Reserve, they can move in response to Fed decisions.
