Home sales hit 11-year high

By David Butts
Advertiser Staff Writer

O'ahu single-family home and condominium sales rose last month to their highest level in 11 years as low interest rates and low prices enticed residents out of apartments or the spare room at mom and dad's house.

The Honolulu Board of Realtors said 341 existing single-family homes and 442 condominiums were sold last month. That's a 13.2 percent jump from a year ago and the highest number of sales since 1990, when Japanese investors were snapping up luxury properties on the island.

The strong local sales reflect Hawai'i's generally stable economy, and mirror nationwide sales of existing homes this year, which is expected to be the second-best on record, rising 1.6 percent from 2000 to 5.19 million even as U.S. economic growth slows.

Most of the activity on O'ahu now is first-time home buyers on the Leeward side, upgrading from a rental or moving out of their parents' homes, said John Connelley, chairman of the Board of Realtors and the head of Coldwell Banker's Kahala office.

The single-family homes went for a median price of $307,000 in August, up just 1 percent from July, but still well below the peak of about $360,000 in 1994. Condos sold for a median price of $129,000 last month, down from $140,000 the month before.

Mortgage rates are also making it easier for first-time buyers to take the plunge. The average 30-year loan had a rate of 6.74 percent last month, its lowest for the year. Low prices, low rates and an increase in incomes on O'ahu has boosted the purchasing power of many residents.

"The current buyers are the middle class whose income has gone up," said Ricky Cassiday, a research consultant to Prudential Locations. "What is driving the middle class now is there has been good job growth on O'ahu, good income growth. They are saying, 'Honey we've been here since '90. I'm doing good; you're doing good. Let's move.' "

Adding to the incentive to buy is a jump in rents — by at least 5 percent — on O'ahu over the past year.

"People are not happy with rents," said Judy Kalbrener, a Realtor with ReMax Honolulu. "With rates going down, you can buy."

All this adds up to a drop in the number of homes and condos for sale. "I wouldn't say we are out of inventory, but we are quite low," said Kalbrener.

The Board of Realtors said there are 1,529 houses for sale, down from 1,592 the same time a year ago, and 1,771 condominiums on the market, down from 1,830 a year ago. Connelley said real estate agents are working flat out to keep up with the added business. While business is picking up, there are fewer agents available to handle it than in the early 1990s because many left the industry when sales slowed down, he said.

Most who stuck around are doing well whether they handle the high end or the low end.

"You could have one Realtor do a $2 million sale and do two a year. Next to them you have one do a $200,000 sale and do 20 of them a year. They make more trips to the bank, but they are both successful," Connelley said.