Rise in home sales surprising
By Andrew Gomes
Advertiser Staff Writer
The market for selling new homes on O'ahu continued to withstand any ill effects from higher unemployment and low consumer confidence last month, as November sales were the best in at least five years.
Both the number of new homes sold and the average list price rose last month over the same month a year ago, according to a report by Prudential Locations research consultant Ricky Cassiday.
Residential developers signed 154 sales contracts and closed deals on another 114 homes in November. That was up 29 percent from 119 contracts, and up 6 percent from 108 closings in November 2000.
The average list price rose to $313,148, up 14 percent from $275,655 for the same period a year ago.
Most of the new homes bought were in Mililani, according to the report. 'Ewa was the second-hottest market.
"I was surprised," Cassiday said. "I've been expecting a slowdown, but I just haven't seen it yet."
Cassiday as well as some local real estate brokers and developers believe new home sales will slow early next year, as drops in consumer income begin to outweigh attractive interest rates.
Unemployment in Hawai'i last month rose to a two-year high. The increase, to 5.5 percent, meant there were nearly 34,000 people in the state without jobs, compared with 23,300 in November 2000. Thousands more have filed partial-unemployment claims since the Sept. 11 terrorist attacks.
Vicki Gaynor, vice president of Haseko Homes, which signed 20 sales contracts last month, said the strong sales are continuing, and she doesn't see any contraction in the next three months unless interest rates spike upward.
Prices, however, may stabilize, she added.
"Last week we sold seven houses — even during the Christmas season when everybody's mind is on other things. It is unprecedented," she said.
Typically, the end of the year is a time when home developers scale back new sales efforts to concentrate on closing sales before Jan. 1.
For the first 11 months of the year, new sales contracts are up 8 percent to 1,634, closings are up 15 percent to 1,436 and the average list price for a new home is up 6 percent to $283,789.
