Prices for homes on
Oahu hit new highThe median resale price of
$481,800 comes as sales rise
Half a million, anyone?
CORRECTION
Wednesday, July 7, 2004The previous monthly record for median condominium resale price was $208,000, set in October 1990. A story on Page A1 Saturday incorrectly listed the record as $230,000, set in 1991. The June 2004 median condominium resale price was $210,000, setting a new record.
The Honolulu Star-Bulletin strives to make its news report fair and accurate. If you have a question or comment about news coverage, call Editor Frank Bridgewater at 529-4791 or email him at corrections@starbulletin.com.
Oahu's median single-family home resale price bore down on that milestone in June, catapulting to a record $481,800, but experts say an increase in market inventory could herald a new era of slower price growth.
The June median price marked a 24 percent increase over the previous June's $388,500, according to the Honolulu Board of Realtors. The board also said the median resale price of condominiums on the island jumped 17 percent to $210,000, edging closer to the all-time record of $230,000 set in 1991.
The price growth came amid an expected summer pickup in sales volume.
"As we come into the summer months, residential sales are historically strong, and this year is no different," said Harvey Shapiro, the board's research economist.
Sales increased to 434 single-family homes, up 5.9 percent from 410 a year earlier. June condo sales, meanwhile, leapt 27 percent to 682 from last year's 537.
Shapiro said the number of properties on the market in June rose from previous months, possibly as sellers who were "on the fence" decided to cash in on prices in the belief that a climate of rising interest rates could limit further price growth.
There were 1,036 single-family homes on the market in June and 1,459 condos. In April the numbers were 784 and 1,034.
"It looks like we bottomed out in April, and inventory has been coming back strongly the last few months," Shapiro said.
The inventory expansion was a "very healthy sign" that could lead to more stable price increases, said Scott Bradley, a managing director with real estate brokerage Coldwell Banker Pacific Properties.
"We've had too many buyers chasing too few properties. That won't end until we reach some kind of equilibrium," he said.
Condominiums, however, might see a spurt in both prices and sales as single-family homes climb out of the range of many buyers.
"If you look at the data, one of the most interesting things is the increase in condo sales. The growth there is much greater (than single-family homes)," Shapiro said.
The buying activity in June came ahead of an expected interest rate increase by the Federal Reserve, which became official Wednesday when the Fed raised its benchmark rate by 0.25 percent.
Market-watchers have said that the Fed is likely to continuing raising rates by a quarter-point in stages to control inflation, which could lift mortgage borrowing rates to around 7 percent by year's end.
While interest rates on mortgage loans are tied to the bond market, not the Fed rate, central bank actions influence those markets.
Bradley said the prospect of higher rates has had little impact on Hawaii's real estate market so far and will not until mortgage rates approach 8.5 percent, still a historically low figure.
"We still expect significant price growth in this market," he said.
