May, July best months for home resales since 1987

By Frank Cho
Advertiser Staff Writer

Low interest rates, limited inventory and a surge in demand for condominiums made July the second-strongest month for O'ahu home resales in 15 years.

Buyers closed the sale on 366 homes in July, or about 12.6 percent more than a year ago. That made last month and May, with 367 home sales, the highest sales months since July 1987, according to figures released yesterday by the Honolulu Board of Realtors.

The condo market saw 528 units sold in July, more than any month since July 1990.

Real estate experts say that with mortgage interest rates at some lenders dipping below 6 percent, buyers have been snapping up homes faster than sellers have been putting them on the market, causing shortages and higher prices. The inventory level of homes and condos for sale is about three months, down from five months in January.

The median price for an existing single-family home was $320,000 in July, up 5.3 percent from the same month last year. The condominium market was even stronger, with the median price at $157,000 last month, up 12.1 percent from the same period last year.

This brings year-to-date resales through July to 2,198 single-family homes and 2,911 condos, up 11.5 percent and 17.9 percent, respectively, from the same period a year ago.

Guy Tamashiro, chairman of the Honolulu Board of Realtors, which represents about 3,600 real estate professionals, said the combined effect of higher resale prices and growing sales activity has pushed total sales volume to $1.4 billion, up 21.6 percent from this time last year.

Helping to keep sales volume high are a growing number of people willing to put their homes up for sale, Tamashiro said.

There were 537 new single-family home listings in July, the highest the board has recorded since January 1986, when the board started keeping records. Condo listings welcomed 714 new units in July — more than any month since May 1995.

Experts say the local real estate boom — which has been propelled by low interest rates and people wanting to move money into something safer than stocks — will likely continue for at least a couple of months because the Federal Reserve is expected to keep interest rates low.

"Even though past statistical records continue to be shattered by the current level of activity, it's anyone's guess how long this housing market run will maintain strength," Tamashiro said.

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