Posted on: Friday, August 13, 2004

Home sales starting to slow

By Andrew gomes
Advertiser Staff Writer

A general slowdown in home resales occurred on the Neighbor Islands last month, the first broad sign this year that rising prices and slightly higher interest rates may have started to cool the hot market.

"I think the indicators are there that the breaks have been put on," said Thomas Delmore of Delmore Realty on Maui, where sales of previously owned single-family homes have fallen for three months in a row.

Sales dropped by double-digit percentages for single-family homes on Maui and condominiums on Kaua'i, while sales of single-family homes on Kaua'i and condos on Maui and the Big Island dipped less.

All the declines coincided with median-price increases between 30 percent and 40 percent in each market segment, according to statistics from Realtor boards on Maui, Kaua'i and the Big Island.

The only sales volume increase was a 21 percent jump for single-family homes on the Big Island, where the median price rose a more modest 8 percent.

Delmore said that on Maui, where the median sales price for a single-family home peaked at $622,500 in May, buyers are balking at prices. Some sellers are lowering their prices in response.

"Buyers are very resistant to all the high prices," he said. "It's good that the price spiral is slowing down. You don't want to price everyone out of the market."

The past three months of declining single-family home resales on Maui were enough to make the year-to-date volume in the first seven months 10 percent lower than it was for the first seven months last year.

Condo volume on Maui is still 12 percent higher for the seven-month period, but Delmore said he expects condo sales to start to slow by the end of the year as demand trails off from people buying condos because single-family homes are too costly.

Maui's median condo price, which is a point at which half the sales were for more and half for less, was $281,400 last month, up 32 percent from $214,000 in July 2003. Maui's single-family home median was $567,000, up 40 percent from $406,500 in the same period.

Condo resale volume on Maui in July totaled 164, down 6 percent from a year earlier, while single-family home volume was 99, down 37 percent from 158 during the same period.

On Kaua'i, condo volume fell 12 percent, to 44 last month from 50 a year earlier, as the median price rose 33 percent to $373,500, compared with $280,000.

Kaua'i single-family home sales dipped 6 percent, to 64 from 68, on a median price that was up 32 percent to $506,500 last month, compared with $384,500 a year ago.

Big Island condo resales were down 8 percent, to 76 last month from 83 a year earlier, as the median price surged 82 percent to $290,800 from $160,000.

Big Island single-family home resales totaled 243 in July, up 21 percent from 201 a year earlier. The median price was $280,000, up 8 percent from $260,000 in the same period.

When Neighbor Island resale volume is combined with the larger O'ahu market statistics released last week, there was a 1 percent drop in July single-family resales. Condo resales for the state were up 14 percent for the month.

Mike Imanaka, vice president of sales and marketing for Title Guaranty of Hawaii, said the statewide home market remains strong. "We anticipate continued growth in the market due to several factors, such as favorable interest rates, positive job growth and an overall healthy economy," he said.

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