New-home sales saw drop

• Winter weather slows pace of home building

By Kelly Yamanouchi
Advertiser Staff Writer

New single-family home sales in Hawai'i last month totaled 137, down from 153 in January 2003. Advertiser Library photo

The number of new-home sales contracts signed in January fell 38 percent to 204, down from 330 a year ago.

"The number last January was so high," with luxury Kaka'ako condo Hokua driving sales, said Ricky Cassiday, who compiles new-home sales data for Hawaii HomeLoans. Last year there were 144 high-rise condominium sales while this year there were 40 units sold.

In the first week of February, union workers at O'ahu's two largest concrete companies went on strike in a dispute over sick leave and healthcare benefits. The strike has stalled some of the major condominium projects and some single-family home construction.

Cassiday said he doesn't expect the concrete strike to cut into new-home sales. While some new-home buyers might shift to the resale market because the strike is pushing out already long wait times, there is plenty of demand to pick up that slack, he said.

Cassiday said new single-family home sales were relatively strong in January. A total of 137 new single-family homes sold in the month, down from 153 last year but higher than the 78 sold in 2002.

The largest single-family projects sold in January were the Haseko series in Ocean Pointe, and Destiny and Island Classics by Castle & Cooke in Mililani, Cassiday said. The biggest multifamily projects in the month were The Coconut Plantation at Ko Olina and the Windsor, a high-rise on Hobron Lane.

The market will see more high-rise projects in coming months, including Ko'olani in Kaka'ako and The Colony in Hawai'i Kai, Cassiday said.

The average sales price for a new home in January was $368,887, down 11.4 percent from $416,256 last year when high-end condominiums pushed the average up. But last month's figure was higher than the average of $341,766 in January 2002.

Reach Kelly Yamanouchi at 535-2470 or at kyamanouchi@honoluluadvertiser.com.

Winter weather slows pace of home building

WASHINGTON — The number of housing projects builders broke ground on in January declined by the largest amount in nearly a year as bad winter weather played havoc with construction activity.

The Commerce Department reported yesterday that the number of residential buildings under way dropped to a seasonally adjusted annual rate of 1.90 million units, representing a sharp 7.9 percent drop from December's stellar pace of 2.07 million units. That had been the best pace since February 1984.

Economists were predicting a slowdown in January from such lofty levels seen in December, and the pace of residential construction in January was still fairly brisk and was up 4.1 percent from the same month a year ago.

"Cold weather had an impact on the U.S. housing market last month, although underlying activity may finally be simmering down from red-hot levels," said Sherry Cooper, chief economist at BMO Nesbitt Burns.

The housing market — throughout the economic slump and the recovery — has been the economy's shining star, providing a source of support for business growth. Economists predict housing activity will be less of a contributor to growth this year but that the sector will stay healthy.

Home sales reached record high levels in 2003, powered by low mortgage rates that proved too good for buyers to pass up. Sales of both previously owned homes and new ones should have their second best year ever in 2004 — even with an expected rise in mortgage rates, economists said.

The average rate on a 30-year mortgage last week dipped to 5.66 percent.