Posted on: Friday, August 29, 2003
New-home sales decline again
| • | Current mortgage rates |
| • | New-home sales |
By Andrew Gomes
Advertiser Staff Writer
Developers of new homes on O'ahu appear to be slowing their building pace, as inventory and the number of sales contracts signed in July fell, marking the second consecutive monthly sales decline.
Buyers signed 220 contracts for new homes last month, down 20 percent from 275 contracts signed in July 2002, according to a report released yesterday by market researcher Ricky Cassiday.
The drop follows a 29 percent decline in June, after three years of rising monthly sales of new homes on O'ahu.
Cassiday said the falloff corresponded with a dramatic decline in the number of available units, which stood at 595 last month compared with 1,283 in July 2002.
"Developer sales are falling as a result of their own success: too much demand, too little supply," Cassiday said in the report.
Developers have discounted the influence of recently rising interest rates, suggesting that when borrowing costs start to go up it usually creates a rush of buyers wanting to beat any further possible rate increases. Still, analysts believe that higher-moving interest rates could cool the market.
Despite the July slowdown, higher prices continued to boost the total value of sales. The average new-home price last month was $383,985, up nearly $21,000 from $363,226 in July 2002. The total value of sales grew by $13.6 million in July, up from $48.3 million in the year-ago month.
The number of completed new-home transactions, which typically trail sales contracts by a few months, was at 184 in July, compared with 137 in the year-ago month.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
