Median price
of Oahu home
rockets to record

Condominium prices
keep rising to sell
for a median $229,300

Another month, another set of records.

Oahu's real estate prices extended a second wind that began a few months ago, logging all-time highs for both homes and condos last month.


The median resale price on a single-family home inched still closer to the $500,000 mark in November, reaching $490,000, while condominiums sold for a median $229,300, the Honolulu Board of Realtors said in its monthly report on Oahu real estate activity.

The figures are 25 percent and 27 percent higher than a year earlier, respectively.

Low interest rates -- which continue to rival those of November 2003 -- and faith in the long-term stability of Hawaii's market kept buyers buying last month despite the vertiginous prices.

"There's a sense that we may have bought at a peak, but the reason we're comfortable with that is we've found our dream home," said attorney Mark Clement, who bought a mountain-view Kaneohe home with koa wood floors for $995,000 with his fiancee, Brandi Busk.

With their combined incomes and low financing costs acquired through a five-year interest-only adjustable-rate mortgage, the couple is confident of handling the monthly payments and "not at all worried" about the prospect of property values dipping in the future, Clement said.

"Real estate cycles generally run about eight years, and we plan to start a family and be in this house for at least 10, so we'll be around to catch the next upswing," he said.

Though sales volume dipped as it usually does near year-end, demand remained strong last month.

Buyers signed sales contracts on 375 single-family homes, down from 441 the previous month but higher than November 2003's 365 homes.

Sales of condominiums, which have become an increasingly attractive option for buyers as single-family home prices have taken off, remained even more robust. There were 628 condos sold last month, off from 665 in October but still well above November 2003's 555 units.

"Even though we expect that the number of resales in the single-family home market this year will exceed last year's, through November there already have been more condominium resales than in all of 2003," said Harvey Shapiro, the Realtor board's economist.

Economists have maintained that there is no reason Hawaii's property market will not remain robust into next year and beyond if the current environment of low interest rates and steady growth in jobs and income continues.

But there might be a geopolitical reason as well.

"9/11 changed the world and made Hawaii a safe haven. That has driven a lot of people out here looking for a safe place to live or invest," said Jim Wright, chief executive of real estate brokerage Century 21 All Islands.

After setting one record after another this year, Oahu home property prices plateaued in late summer. They have found new life since then, growing more slowly but still setting records in recent months.

"Prices are going to mitigate in the months ahead. They're going to keep growing but not as rapidly," Wright said. "But we should still have another record year next year."

The Board of Realtors said total resale volume for Oahu in the first 11 months of the year jumped 34.2 percent, to $4.31 billion from $3.21 billion in same period a year earlier.

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