O'ahu home resales rise

• O'ahu home resales for February

By Frank Cho
Advertiser Staff Writer

Housing resales rose for the second consecutive month on O'ahu, fueled by limited inventory and historically low mortgage interest rates.

The Honolulu Board of Realtors said yesterday that 242 single-family homes were sold last month, up 29.4 percent from 187 sold during the same month a year ago. Meanwhile, 329 condominiums were sold last month, up 16.7 percent from 282 a year ago.

The high demand for homes also boosted the median price last month to $312,000 for a single-family home, a 25.1 percent jump from the same month last year. Condo prices rose 8.3 percent to $137,000 from $126,000 a year ago.

"Resale figures for February were incredibly strong," said Peter Freeman, president and chief executive officer of the Honolulu Board of Realtors. "The factors contributing to the strong home resale market are still in place and we are optimistic that real estate sales will continue to assist in improving the overall economic stability on O'ahu."

Year to date, the median price of a home on O'ahu has risen 11.7 percent from the same period a year ago, according to figures collected by the board.

But the rapid increase in median sales prices has started to raise some concern that it could create a real estate "bubble" that could scare away buyers.

"This is a huge increase, but it's only one month. If it continues at this pace, it will soon test the market and buyers' willingness to pay more for their next home," said Ricky Cassiday, a residential real estate consultant for Prudential Locations.

Cassiday said market watchers should keep an eye on home sales for the next several months and look for a stabilization of prices.

"The year has only just begun. Let's wait a couple more months. Then I might get alarmed if things don't slow down," Cassiday said.

Growing demand for homes and condos has been in contrast to other real estate sectors, such as commercial office or industrial, where vacancy rates have been on the rise.

"It's really wacky. My guess is there are several good-sized pockets of people out there with money and that is what is helping to drive up residential sales," Cassiday said.

For the first two months of this year, Leeward O'ahu turned in the strongest performance by increasing single-family resales by 18.4 percent and condo sales by 35.8 percent, the board said. Even more dramatic was that the dollar value of sales jumped 38.8 percent from the same period last year, and 51.8 percent for condominiums.

"This far exceeds the islandwide O'ahu figure," Freeman said. "It is consistent with a historical pattern in the O'ahu sales market where the more expensive properties are first to increase, followed by the more moderately priced dwellings."

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