Posted on: Friday, September 19, 2003
Low inventory cuts into new-home sales
| • | Chart: August sales slow on O'ahu |
By Andrew Gomes
Advertiser Staff Writer
Reduced single-family home construction on O'ahu sent sales of new homes in August to a low for the year, as the industry slowdown continued for a third consecutive month, according to a report released yesterday.
Residential developers signed 182 sales contracts last month, down 32 percent from 266 in August 2002, according to market analyst Ricky Cassiday, who compiled the report for Hawaii HomeLoans.
The contraction made August, which is traditionally one of the busiest months of the year for new-home sales, the slowest since December, a historically slow month.
Still, Cassiday said the market remains relatively strong and that developers are selling everything they can build.
"Whatever we release, we're able to sell," said Mike Jones, Hawaii division president for Schuler Homes Inc.
Jones said Schuler has not been hampered by reduced inventory or sales, and is building about the same number of homes this year as it did last year.
Schuler has seven projects on O'ahu, and out of 755 planned units, about 100 have been built and sold. "I think right now the outlook is strong for residential home construction," he said. "The interest rate now is still historically low and it hasn't seemed to slow down the sales rate at any of our communities."
Other developers, Cassiday said, have had difficulty obtaining permits, construction workers and suitable land to keep up with what had been a nearly three-year run of growing sales.
The August drop occurred with single-family homes, of which 124 were bought, compared with 216 in the same month last year. In contrast, developers sold 58 multifamily homes last month, compared with 50 in August 2002.
The decline in more expensive single-family homes pushed the average sales price for all homes sold in August down for the first year-over-year drop since November 1998. The average home price last month was $374,735, compared with $379,240 in August 2002.
Total inventory last month was at 683 units, compared with 1,138 in the same year-ago month. The inventory was an improvement over July when there were 595 new homes available.
Cassiday said the July-to-August inventory rise was mostly from The Colony, a Stanford Carr Development project in Hawai'i Kai that released 100 units for sale and sold 30, the most for a multifamily project last month, Cassiday said.
The most single-family home sales happened at Makai Village Partnership's Kapolei Kai, which signed contracts for 32 homes.
Meanwhile, the number of completed sales, which typically trail sales contracts by a few months, jumped 68 percent to 252 last month, compared with 150 in the same month a year ago, reflecting strong sales earlier this year.
The total dollar volume for sales completed in August was $85.8 million, 75 percent higher than the $49.1 million in closings in August 2002.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
