Posted on: Thursday, May 24, 2001

Condominium, home sales slow in first quarter

By Frank Cho
Advertiser Staff Writer

Hawai'i home and condominium resales state-wide slowed more than usual in the traditionally weak first quarter, pulled down by sluggish sales in the Neighbor Island market, which had drawn an increasing number of offshore buyers.

Offshore buyers, concerned about a slowing Mainland economy and volatile stock market, mostly stayed away for the three months ended March 31, according to a quarterly report by Prudential Locations Real Estate Sales and Research.

Local buyers kept first-quarter sales brisk on O'ahu, where sales were up 0.8 percent from the same period a year ago.

"Indeed, the new-home market on O'ahu shows higher single-family sales in 2001 than in 2000 — the first time this has happened in about six years," said Ricky Cassiday, director of research for Prudential Locations.

Statewide, median single-family home prices continue to rise in most areas, reflecting a falling inventory of homes for resale. Only Hilo, Mililani, Pearl City and the Windward side of O'ahu did not show price increases.

On Maui and Kaua'i, home prices have reached historic highs, surpassing records set in the late 1980s, the report said.

Last year, statewide average home prices grew to $383,000, up 14 percent from the 1999 average price of $335,000.

"Going forward, these high prices will begin to encourage residential home developers to build for this demand," Cassiday said.

Like the single-family home market, condominium sales statewide have slowed so far this year — by about 6 percent for the quarter.

Again, the Neighbor Islands are showing continued weakness in condominium sales, with projected declines of 10 percent to 40 percent this year over last. On O'ahu, first-quarter sales were 4 percent higher than the year-ago quarter, and are on track to beat last year's performance, according to Prudential.

Despite the slowdown in condominium sales activity, the average price has continued to climb so far this year. Prices have risen an average 10 percent for the quarter, to about $200,000 per unit.

"With the fall in interest rates of late, the psychology in the real estate marketplace could well remain favorable for sellers," Cassiday said.