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The Honolulu Advertiser
Posted on: Wednesday, November 5, 2003

Sale prices for homes on O'ahu hit new high

By Andrew Gomes
Advertiser Staff Writer

Buying an existing home on O'ahu continues to get more expensive, as the median price paid last month for a single-family residence set a record at $399,300.

While prices rose, the number of single-family home resales remained essentially level at 380, compared with 381 in October 2002.

Condominium resales increased both in price and volume, with last month's median price up by $26,500 to $185,000 on 669 transactions. The sales were up 27.7 percent from 524 in October 2002.

The latest statistics, released yesterday by the Honolulu Board of Realtors, show that Hawai'i's primary housing market remains relatively strong despite continued appreciation in home values.

"Even though housing prices have gone up, they're still so affordable because of the low interest rates," said Mary Begier, president of the board.

Hawai'i has long been one of the most expensive real estate markets, ranking fifth-highest behind San Francisco, Orange County, Calif., Boston and San Diego in the latest National Association of Realtors study based on second-quarter median prices in about 140 metropolitan areas.

The median price, a point at which half the prices are higher and half are lower, has risen steadily all year for O'ahu single-family homes — from $350,000 in January to $394,500 in August, when the median broke a 13-year high.

Meanwhile, the weekly average mortgage rate for a 30-year loan reported by Freddie Mac fell between 5.21 percent and 6.32 percent from June to August, when purchase agreements typically were reached for sales that closed last month. For the week ended Oct. 30, the average was 5.94 percent.

Harvey Shapiro, research economist for the Realtor board, said the low cost of financing has been, and should continue to be, the market's key growth driver.

"When the Federal Reserve met in October, they gave no indication that (interest) rates would be increasing any time soon, and we should expect mortgage rates to remain affordable well into 2004," he said.

Begier said she expects home prices to remain stable during the last two months of the year or so, as consumers focus on the holidays and find fewer homes on the market.

At the end of last month, there were 969 single-family homes available, the second lowest level since January 1990 when there were about 1,400 homes on the market. The next low was in July at 996 homes.

For condos, the inventory stood at 1,566 units at the end of last month. That's up from a July 2002 low of 1,403 units, but still below December 1989 at the low point of the Japanese real estate investment bubble when there were 1,900 units available.

For the first 10 months of the year, the total dollar volume of O'ahu home resales was $2.91 billion — up 35.3 percent from $2.15 billion during the same period last year.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.

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