Home sales at record level
By Andrew Gomes
Advertiser Staff Writer
O'ahu's hot real estate market shows no signs of cooling. The number of single-family homes resold in February was the highest ever for that month, even though prices were at all-time highs and inventory was at record lows.
The median price for a single-family home ratcheted to a new high — $410,000, or $10,000 more than in January, and $60,000 more than in February 2003, according to a report released today by the Honolulu Board of Realtors.
The board said 293 single-family homes were sold last month, an 8.9 percent rise over 269 in February 2003, when the the previous record (248 sales in 1990) had been broken.
In the condominium market, resales last month totaled 449, up 3.7 percent from the same month last year. The median condo price, which is a point where half the sales prices were higher and half lower, was $188,000, up $1,000 from January and $21,000 since February 2003.
Local architect Grant Sumile and his wife Julie, an interior designer, bought one of the 293 single-family homes sold last month. The couple, who bought a $479,000 house in Kailua, took a year to find the right property, and they have seen price increases and falling inventory firsthand.
"Because it's a selling market, the prices were kind of high — that was our perception," Grant Sumile said.
Bill Chee, chief executive officer of Prudential Locations, predicts that a continued drain on inventory will slow sales by the summer, and result in a flat to slight decline in sales this year compared with last year.
"Inventories are restricting sales," he said. "Buyers are really finding that they have less to choose from. (Sellers) are asking themselves where are they going to go before they sell."
Last month there were 829 single-family homes and 1,187 condos for sale, according to the board, which said it was the smallest inventory since it began keeping records in 1986. The number of homes on the market is down from prior inventory peaks of about 2,500 single-family homes in August 1996, and 5,000 condos in November 1986.
The Sumiles were lucky to spot their Kailua house as a broker had just put a "for sale" sign in the yard, a day before listing the home in the computerized database for brokers.
"There was a sense of urgency," Grant Sumile said, explaining that the next morning they made a written offer for the full asking price. "I was worried that if we waited someone would offer higher."
Lisa Haeringer, a broker with Coldwell Banker Pacific Properties representing the Sumiles, said the couple's experience with making a strong offer fast after months of searching isn't unusual. "We looked everywhere from Hawai'i Kai to Wai'alae Iki to Kailua," she said. "Once you set that price range, you're going to see everything there is because there are so few."
Mary Begier, board president, said low mortgage rates are a key to the surge in demand that has depleted inventory. She expects low rates will continue to help buyers with moderate incomes afford homes despite the rising prices.
Begier said last year it took about 32 percent of a local median household income to purchase a median-priced home on O'ahu. In 1990, it took almost 60 percent of the median household income to purchase a median-priced home, because of higher financing costs.
Purchases for the first two months of the year totaled 635 single-family homes and 1,007 condos, increases of 16.1 percent and 10.8 percent, respectively, compared with last year.
Total year-to-date dollar volume was $575 million, 41.7 percent higher than the $406 million for the same period in 2003.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
