DENNIS ODA / DODA@STARBULLETIN.COM Condominiums are attracting more interest as single-family home prices have become less affordable. Above, a home at 91-983 Papapuhi Place in Ewa Beach had a for-sale sign outside in August 2003.

Median condo price
hits record $243,000

The record high prices
come amid a record low in
condominium inventory

Sharon Won, a single mother working three jobs to support a family of five, has been looking for a bigger place to accommodate her daughter -- and dog -- returning home from college.

But she takes little comfort from the notion that she can pocket $170,000 by selling the three-bedroom, two-bath Aiea townhouse she's been living in for four years.

"It's crazy," said Won, who said she was offered $300,000 cash for the condo she bought for $130,000 in 2001. "I'm happy I made the money, but also at the same time, with the amount of money that I make, I can't afford to buy another house."

That realization was reinforced yesterday when the Honolulu Board of Realtors announced that condominium prices hit a record median price of $243,000 in April amid a dwindling inventory that saw the number of available condo units fall below 1,000 for the first time since the board began keeping track in 1985. Condos, which have attracted more interest as single-family home prices have become less affordable, rose 18.5 percent from $205,000 a year earlier and increased $13,000, or 5.6 percent, from $230,000 in March. The number of condo listings last month hit a low of 940 units.

Although single-family home prices slipped 0.9 percent in April to $545,000 from the record $550,000 reached in March, the median price was still up 25.3 percent from $435,000 in April 2004. Inventory for single-family homes declined to 814, just above the record low of 784 active listings in April 2004.

"This extreme lack of inventory is the reason for the price escalation," said Harvey Shapiro, research economist for the Honolulu Board of Realtors.

Aloha Homes principal broker Ira Gordon said home seekers shouldn't hold their breath that prices will drop soon.

"The low inventory numbers are very significant," Gordon said. "This is what I keep telling my people who say that we're in a housing bubble and that somehow this is going to change and the prices are going to drop. It's the old economic principle of supply and demand. Our supply is just too low and our demand is very high and that's just not a bubble."

Houses are getting snapped up so fast that in April a single-family home was on the market just 19 days from the time of listing until a contract was agreed upon. The number of single-family homes sold rose 15.8 percent to 418 in April from 361 a year earlier.

Condos were up for grabs slightly longer -- 22 days -- as the number sold increased 10.1 percent to 754 from 682.

Regardless of minor dips in the market, Bank of Hawaii Economist Paul Brewbaker expects the run-up in prices to last at least through 2006 and possibly into 2007 as long as interest rates remain low, household incomes stay strong and offshore investors make rational decisions.

"During the first quarter, prices grew by 10 percent," Brewbaker said. "If that rate continues throughout the year and we keep going like the Energizer bunny, then we'll end up at 40 percent or more growth in prices and it could all wind down, maybe as soon as next year."

The total dollar volume of sales through the first four months of this year has risen 30.9 percent to $1.7 billion from $1.3 billion a year earlier, according to the Realtors Board. The number of single-family homes sold has increased 3.7 percent to 1,394 and the number of condos purchased has risen 9.9 percent to 2,526.

Won, who lives in Pearlridge Gardens & Tower, said she wants to remain in Aiea and find a four- or five-bedroom, single-family home for around $500,000. But she's resigned to the fact that houses she desires in the area she wants to live in range from $600,000 to $800,000.

"I've got no choice, and I'll have to go look at someplace else instead of being limited to the area where I want to live," said Won, whose primary job is as an interpreter in Mandarin and Taiwanese for the state Department of Transportation at Honolulu Airport.

Norma Tenorio, a Realtor for Coldwell Banker, said low interest rates of under 6 percent still make buying a house attractive.

"The market is hot," Tenorio said. "Sometimes they'll put it on the market and in one day the property is sold, or by the time it goes to (Multiple Listing Service) it's sold already. People are putting in $10,000 to $15,000 above the asking price."

Scott Bowditch and his wife, Nasreen, consider themselves lucky and victims at the same time.

They're closing escrow now on a $185,000 leasehold condo in Makiki that they recently purchased at the asking price because their Realtor was able to get a jump on the property before it reached MLS. They've had to wait longer than they wanted, though, for the current tenants to move out, and in the meantime their landlord raised the rent on their current Makiki condo.

"Things are just going like hot cakes," said Scott Bowditch, who's been looking for a condo since September. "We saw the place and made an offer within minutes. I find myself extremely lucky to get the place for what I did."

Having said that, Bowditch still feels he's being exploited.

"It's a seller's market," he said. "All the buyers are at the owners' whim. Whether you're renting, they're going to gouge you; or if you're buying, they're going to gouge you. You can't get away from it."

For Won, though, no other place beats Hawaii.

"The people in Hawaii are crazy, but I would not live anyplace else in the world," she said. "But we're paying for the weather and the clean water."