Buyers snap up O'ahu condos

By David Butts
Advertiser Staff Writer

The Honolulu Board of Realtors reported yesterday what anyone shopping for a condominium already knew: prices are rising fast.

The median price for a condominium on O'ahu climbed to $160,000 in November, its highest since 1997 and closing in on the $200,000 peak in 1990.

The combination of rising prices and quick sales has made it a tough market for buyers, said Stephen Drake of Drake Properties Inc. He tells his clients, "If you like it, you better go for it that day. If you think about it overnight, you are going to lose it."

Condo buyers "need to pay the asking price or over," said Drake, who has 10 clients now looking for condominiums and does about 10 sales a month.

Condominium prices are up 17.2 percent since November 2001 and the number of units sold last month, 472, was up 56 percent.

"I believe that is a sign that investors are returning to the market," said Harvey Shapiro, research economist at the Honolulu Board of Realtors. "There are plenty of properties that do go in one day."

As for single-family homes, the median price in November was $347,000, up 11.9 percent from a year ago, but down slightly from the $355,000 median price recorded in October. A total of 307 single-family homes sold in November. Again, that is up from a year ago but down from the 381 sold in October.

The real estate market in Hawai'i, as well as the rest of the nation, has been one of the few bright spots in the economy in the past two years. With stock markets falling and interest rates at 30-year lows, many investors have shifted money into real estate. Low interest rates and rising rents have convinced others to buy for the first time.

The one indicator that may suggest a slowing of the housing boom is inventory. All the recent demand led to a decline in the number of homes on the market until the past few months, Shapiro said.

"Inventory looks like it is starting to possibly turn around," he said. In November there were 1,184 single-family homes on the market and 1,641 condominiums, Shapiro said. The condominium inventory is up "a couple hundred units" and single-family homes are flat, he said.

Shapiro cautioned against reading too much into those numbers. "Inventory looks like it is picking up, but we need to see a few more months of data," he said.

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