O'ahu homes selling fast
By Andrew Gomes
Advertiser Staff Writer
"For Sale" signs in front of homes on O'ahu turned to "Sold" signs with phenomenal speed last month, as more buyers rushed to beat rising interest rates and were willing to pay a premium to clinch purchases.
Sellers of previously owned single-family homes on O'ahu took an average of 19 days to accept an offer, or 20 days for condominiums — faster than at any other time in the last 17 years for which records have been kept.
According to the Honolulu Board of Realtors, which released the latest sales statistics yesterday, home prices were about 20 percent higher than in May 2003, and sellers received more than they asked 30 percent of the time when selling single-family homes and 21 percent for condo resales.
Last month's single-family median sales price was $445,000, a record that was up by $10,000 from April. A year ago the median — which means half the homes sold for more and half for less — was $365,000.
Ludivina Gasmen, 22, an insurance company employee and former renter, recently bought a 40-year-old home in Kalihi for $165,000 with help from her father. She said she felt the pressure to become a first-time homeowner.
"We had to rush to find something before the end of May because the rent was to go up in June," she said. "We never had many choices."
Bill Chee, president of residential real estate firm Prudential Locations, said many homes spent no more than five days on the market, meaning that choices for buyers were more limited than the 19- or 20-day average selling times suggest.
"That's very fast," he said.
The quick pace of sales was likely due largely to people trying to buy homes before lenders raise mortgage rates even further, said Harvey Shapiro, research economist for the Board of Realtors.
"I think people might be trying to beat the (Federal Reserve) rate hike," he said, adding that mortgage rates recently increased by a half point to 1 percentage point in anticipation of the Fed's moving interest rates higher later this month.
Last May, Shapiro said, the time homes spent on the market was 28 or 29 days, about 10 days more than last month.
Historical statistics for premium prices have been tracked only since 2000, but Shapiro said last year just 15 percent of single-family home sales and 10 percent of condo sales went for more than the asking price.
Last month there were 405 previously owned single-family homes sold, up from 393 sold in the same month a year ago.
The number of condo resales last month totaled 712, up from 564 in the same year-ago month. The median price of $195,000 was down $10,000 from April, but up from $166,000 in May 2003.
In one bright spot for prospective buyers, more homes were on the market last month. Sellers added 659 single-family houses and 1,075 condos to the market. May ended with an inventory of 864 single-family homes and 1,203 condos for sale.
Real estate brokers and lenders predict that if interest rates rise significantly this year it may slow the pace of increasing prices and sales volume, though job growth, growing families and baby boomers buying second homes should continue to fuel the market.
For the first five months of the year, the number of previously owned homes sold on O'ahu was up 14 percent to 4,759, for a combined value of nearly $1.7 billion.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
