New-home sales in 2002 strongest in five years
By Andrew Gomes
Advertiser Staff Writer
Developers built and sold 30 percent more homes on O'ahu last year than in 2001, attracting buyers who on average paid $60,768 more than the previous year and creating a backlog that in some cases has grown to a year's wait to move in for buyers today.
The nearly $800 million market, with 2,217 sales contracts for homes at an average price of $358,430, was better than it has been in at least five years, according to data compiled by Ricky Cassiday for Prudential Locations.
All the building and selling helped the state's economy eke out modest growth last year as an army of construction workers, interior designers, bankers and real estate brokers were kept extra busy while the state's main economic driver, tourism, struggled with anemic recovery from Sept. 11.
"People move in as fast as we can build them (homes)," said Patrick Kobayashi, principal of Kobayashi Group LLC, managing agent for one of last year's best-selling projects, Kapolei Kai. The 204-unit single-family home community, started about a year ago, had 176 sales by the end of last year, third-most following two Mililani communities by Castle & Cooke Homes Hawai'i Heritage with 195 sales and Destiny with 178.
Stanford Carr Development, another local developer, also had a busy year, selling 51 townhomes at its Peninsula project in Hawai'i Kai. In all, Carr reported selling 230 homes for $72.1 million last year, including Neighbor Island residences not included in Cassiday's survey.
Cassiday said developers haven't sold so many O'ahu homes since at least 1997 when he started tracking annual sales contract statistics.
The number of completed sales, which typically trails sales contracts by a few months, was 1,553 last year, up 12 percent from 1,383 in 2001.
Cassiday said a falloff in closings in December reduced the number of completed sales, some of which will be added to 2003 closing data, but was not meaningful to the overall market performance in 2002.
The last time the number of completed transactions was higher was in 1999 shortly after a number of condominium high-rise buildings such as One Archer Lane, 1450 Young St. and Hawaiki Tower were completed.
A large number of delayed closings this year may continue as sales of new high-rise condos in Kaka'ako and Waikiki stay in escrow until the buildings are completed in the next couple of years.
"If we could build them faster we would love it," said Kobayashi, whose firm is partnering to build the luxury Kaka'ako condo, Hokua, with The MacNaughton Group.
"It's a good market ... right now everybody's building for demand, which is good," said Mike Jones, Hawai'i division president for Schuler Homes.
Jones said a customer wanting to buy a home at Schuler's Kapolei Knolls project today would have to wait about a year for delivery, at the earliest. "Basically everything we're building is sold at this point in time," he said.
Developers said that as long as interest rates stay as low as they were last year, 2003 should be another year for growth in the local home-building business.
Of course fear of war or an invasion of Iraq could break consumer confidence and discourage buyers. But developers are pushing ahead based on current demand.
Cassiday said the strength in resales of existing homes over the past few years has taken many homes off the market, leading to more demand for new homes.
"The resale market has set the table for the new homes market to have another banner year in 2003," he said, explaining that rising prices for existing homes have allowed developers to build similar homes at comparable or lower prices.
Reach Andrew Gomes at email@example.com or 525-8065.