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The Honolulu Advertiser
Posted on: Thursday, March 13, 2003

Home sales strong in January

By Sean Hao
Advertiser Staff Writer

New home sales in Hawai'i continued at a brisk pace in January, fueled partly by low interest rates and a low jobless rate.

During January, 179 units were sold — a 43 percent increase over the 125 units sold in the year-ago period, according to figures compiled for mortgage company Hawaii HomeLoans.

January's results indicate the state's new home market is showing little signs of cooling off, following a year when sales were at their highest since 1997.

"I think it's low interest rates, but it also shows how many people feel reasonably secure about their jobs," said Ricky Cassiday, who compiled the home sales figures. The state's January unemployment rate of 3.7 percent was well below the national average.

Overall, new home sales revenues for January grew nearly 57 percent to about $64 million.

"We're selling about as many homes as we can reasonably build," said Richard Dunn, executive vice president of Haseko Realty Inc. "It's a good problem to have."

Average closing prices also increased 11 percent to $394,313 for new homes and 9 percent to $183,434 for new condominium units. Dunn attributed the rise in home prices to low interest rates as well, since they make pricier homes more affordable.

"A lot of people who thought they were in one price category all of a sudden find out they can afford more," he said.

According to Cassiday, the best-selling home development in January was The Gallery in Royal Kunia with 23 homes sold, followed by The Heritage in Mililani with 17 home sales.

Just how long Hawai'i's new-home market can sustain such strong growth is difficult to forecast.

Interest rates are expected to remain low for a while. But the biggest uncertainty is a possible war in Iraq, Dunn said. Military conflict and the possibility of losses in tourism and employment could sap consumer confidence and dampen sales.

"As long as people have jobs and are relatively confident that those jobs aren't in jeopardy, this will last," Dunn said.