Posted on: Wednesday, October 3, 2001

O'ahu home resales tumble

By Frank Cho and Michele Kayal
Advertiser Staff Writers

O'ahu home and condominium resales fell last month after reaching record levels in August, but real estate brokers are hesitating to peg the decline to Hawai'i's struggling economy since the Sept. 11 terrorist attacks on the Mainland.

The Honolulu Board of Realtors said 261 existing single-family homes and 334 condominiums were sold in September, down 11.8 percent and 3.5 percent, respectively, from the same month a year ago.

"At this time the O'ahu housing market statistics appear to be marginally affected by the tragic and horrific events of Sept. 11," said Peter Freeman, the board's president and chief executive officer.

The slowdown came after O'ahu single-family home and condominium sales rose in August to their highest level in 11 years as low interest rates inspired new buyers.

Since Sept. 11, unemployment rolls have swelled and the tourism sector has suffered, but local real estate brokers said while some deals have fallen through and sales were slow immediately after the attacks, business in general has been brisk.

"We were still pretty active, and I'm working with some buyers now on some things," said Ira Gordon, principal broker of Aloha Homes, adding that he believes the decline could be because inventory has been so tight. "All I can think is that it might be because of the lower inventory. I've had a hell of a time finding clients property."

Brokers said it was too early to tell what the ultimate impact of attack-related layoffs would be on the housing market. But the Federal Reserve cut a key interest rate again yesterday, sending it down a half-point to its lowest level since 1962. The cut was the ninth this year, and the second half-point cut since the attacks.

Many brokers attributed what they said were their stable sales in September to the favorable interest rates.

"Interest rates are the best they've ever been, even before September 11," said James Mazzola, broker in charge for the windward office of Coldwell Banker Pacific Properties. "There's been a lot of pent-up demand for buyers to acquire homes because of the favorable rates."

Troy St. John, president of Fidelity National Title, the largest title insurance underwriter in the United States, and the second largest in Hawai'i, said Sept. 11 did not saddle his office with broken deals.

"We haven't seen a lot of cancellations yet," he said. "Our business hasn't really dropped at all."

Single-family homes sold for a median price of $308,000 in September, up just 0.03 percent from $307,000 in August, and up 10 percent from $280,000 in September 2000. The median condominium price was $134,000 last month, up 3.9 percent from $129,000 the month before and 3.1 percent from $130,000 in September 2000.

For the year through Sept. 30, resales rose to 2,573 single-family homes and 3,245 condos, up 7.9 percent and 11 percent, respectively, from a year ago. Year-to-date sales increased to $1.51 billion, up 4.9 percent from $1.44 billion in 2000.

The board's survey does not include new-home sales.

There is usually a two- to four-month lag between the signing of sales contracts and the closing of escrow.

Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.