Housing resales near levels seen in late '80s

By David Butts
Advertiser Staff Writer

More existing homes on O'ahu sold last month than in any previous February since the Honolulu Board of Realtors began collecting the data in 1987.

The combined sales of condominiums and single-family homes are nearing the numbers reached during the Japanese investment bubble of the late 1980s, making real estate one of the brightest spots in the Hawai'i economy.

The pace of sales has pushed up income for many Hawai'i real estate agents and the businesses that support them.

"Our members are doing quite well," said Harvey Shapiro, a research economist at the Board of Realtors. "This activity should continue as long as mortgage rates remain at historic lows."

That outlook was somewhat clouded by Federal Reserve Chairman Alan Greenspan, who said yesterday the hot home sales market is likely to cool later this year. (See related story at left.)

Last month on O'ahu, there were 269 single-family homes resold, up 11 percent from a year earlier, the Honolulu Board of Realtors reported yesterday. That topped the previous record high for February of 248 single-family homes resold in 1990. The median sales price was $350,000, up 12 percent from a year ago but unchanged from the last two months.

In the condo market, 433 units sold last month, with a median price of $167,000. That marked a 32 percent jump in the number of sales from a year earlier and a 22 percent increase in the median price.

While condos are selling well, they still have not reached the level of the bubble years. In February 1990, 561 condos sold. And the peak median price for condos was $208,000 in October 1990. Condo prices declined to a low of $115,000 in July 2000.

With fewer Realtors to split the proceeds from the transactions, it has been a profitable time to be selling homes, Shapiro said.

During the Japanese bubble the Honolulu Board of Realtors had about 7,000 members, Shapiro said. As the market declined in 1990s, that number went down to about 3,500. Over the last few years, it has climbed back to 4,000. "There are only 4,000 members sharing all of the sales," said Shapiro. "That's why I said our members are doing quite well."

Hawai'i topped the nation in annual increase in existing-home sales last quarter. Home resales in Hawai'i rose 33.9 percent in the fourth quarter compared with the same quarter of 2001, the National Association of Realtors said. No. 2 was Nevada, where existing-home sales rose 32.0 percent from a year earlier. Alabama posted the third-highest increase, up 22.3 percent.

For the past twelve months, O'ahu annual sales have soared to just more than 9,600, while during 1990 it attained a high of 10,148 units, Shapiro said. "This rate has steadily risen since we hit the bottom of the market in 1997, when the sales rate was only 3,634 housing units," he said.