Posted on: Thursday, August 5, 2004
O'ahu condos set price, sales records
| • | Chart: O'ahu home sales — July 2003 - July 2004 |
By Dan Nakaso
Advertiser Staff Writer
The median price of a previously owned condominium in July shot up to a record high of $217,000 on O'ahu, while the island's 776 condominium sales also set a record for volume, according to figures released yesterday by the Honolulu Board of Realtors.
The median price of a previously owned single-family home, meanwhile, dipped slightly from June's record high of $481,800 to $480,000 in July. But the 467 single-family homes sold in July also set a record, according to the Board of Realtors.
Condominium prices rose 3.3 percent in July from June as some buyers apparently turned from single-family homes to lower-priced condos, said Harvey Shapiro, the board's research economist.
"People who can no longer afford single-family homes are priced out of the single-family market and are now moving into the condo market," Shapiro said. "Now that (single-family) prices have gone up into the $480,000 range, their budget is stretched. But they can comfortably go into a condominium, which is substantially lower in price."
Manny Joza originally looked at only single-family homes on the Windward side but couldn't find anything decent within his budget of $400,000.
He turned to condominiums and made six unsuccessful offers. Most of them were over the asking price, including one that was $15,000 higher than what the seller originally wanted.
Joza finally closed July 30 on a three-bedroom, two-bath condo in Kane'ohe for $365,000.
"It's very competitive out there," Joza said. "The only single family homes for $400,000 were wrecks for the most part. Even then, the options of what was available were extremely limited."
Joza's Realtor — Carky Ainlay, co-owner of HomeQuest, Realtors in Kailua — sold an identical condo last year in the same Kane'ohe development for $299,000.
Like other real estate agents, Ainlay last month saw more interest in condos as the median price of single-family homes hovered around $480,000.
But in Kailua's Enchanted Lake area, some owners last month listed their homes for as much as $700,000.
"Anything that's decently priced will sell," Ainlay said. "But at that price, they're not moving. The buyers are going to reach a point where they're not just going to pay anything. But it's a very strange market. I don't think we really know what to predict."
June's median condo price of $210,000 broke a 14-year-old record of $208,000 set in October 1990.
July's record condo prices mean that the "upside-down mortgage" phenomenon of the mid- to late-1990s has all but disappeared. The problem affected condo owners who bought during the peak of the Japanese investment bubble in Hawai'i, only to see the market value of their property later fall below the amount they owed on their loans.
"That's in the past," Shapiro said. "With our higher prices now, it's very doubtful anyone is in that situation for either single-family homes or condos."
Bill Chee, president of Prudential Locations, also believes that the record condo prices are the result of more interest from would-be single-family buyers.
"When the (median) price starts heading toward $500,000, you leave people out of the market place and they turn to a substitute, which is a condo," Chee said. "It's a market-wide phenomenon that's not isolated to a specific area. It's all across the board. That's what makes this recovery a healthy one."
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or at 525-8085.
