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The Honolulu Advertiser

Posted at 12:17 p.m., Monday, January 6, 2003

Record year for single-family home sales

By David Butts
Advertiser Staff Writer

The lowest interest rates in three decades led to a record year for single-family home resales in O'ahu and real estate experts see no letting up in 2003.

A total of 3,906 single-family homes sold last year, the largest number since the Honolulu Board of Realtors began keeping records in 1985 and a 14.7 percent increase over 2001. The dollar volume for single-family homes and condominium sales in 2002 rose to $2.62 billion last year, a 31 percent jump over 2001, making real estate one of the few bright spots in an otherwise slow economy.

"Last year was extremely strong," said Herb Conley, managing director of Codwell Banker Pacific Properties, the state's largest residential real estate firm. "It was much stronger than anyone predicted. It's still extremely strong. We had the largest volume in December that we've ever had for a December."

The median price of single-family homes was $335,000 last year, up 11.7 percent. That has led to stronger sales in the condominium market, said Bill Chee, CEO of Prudential Locations. As prices rise for single-family homes, buyers switch to the more affordable condominiums. In all 5,406 condos sold last year, up 37.7 percent. The median price for condos rose to $152,000 up 14.3 percent.

"It has been good across the board," said Chee, adding that Prudential Locations increased the staff by more than 40 percent last year to handle the booming business.

Real estate sales should continue to boom as long as interest rates, which fell below 5.7 percent for a 30-year loan in December, stay low.

"My feeling is there is a lot of pent up demand being satisfied now," said Harvet Shapiro, research economist at the Board of Realtors. "It should continue as mortgage rates are low. The market has been weak for so long. This is long overdue. There is no signs of letting up."

For December, single-family homes sales totaled 347 units, up 33.5 percent from December 2001, and the median sales price was $350,000, up 13.5 percent.

In the condo market in December, 487 units sold at a median price of $160,000. That's a 46.7 percent jump in units sold from a year earlier and a 23 percent rise in median price.

So how are the real estate professionals handling all this activity?

"I think you could consider it joyful stress," said Chee. "This is good stress."