Posted on: Friday, April 22, 2005
Slower building hurts sale of homes
| • | 400 upscale townhomes planned on O'ahu, Big Isle |
| • | Chart: New home sales slide |
By Andrew Gomes
Advertiser Staff Writer
Sales of new homes on O'ahu slowed over the first three months of the year, as construction constraints left little inventory to satisfy continuing strong demand from buyers.
Developers signed 596 sales contracts for new homes in the first quarter, a 14 percent decline from 689 in the same period a year earlier, according to data compiled by local market researcher Ricky Cassiday.
"Demand is strong, but building is slow," Cassiday said in the report. "Like the resale market, there is not much inventory available, which is holding back sales."
Developers typically hesitate to sell more homes than they can build and deliver in a year. Selling homes in smaller increments also has allowed builders to price each subsequent release higher in conjunction with appreciating values in the resale market.
The first-quarter sales decrease was from a falloff in the single-family home market, where sales dropped 39 percent to 232. Multi-family home transactions, which include townhome and high-rise condominium sales, rose 17 percent to 364.
At the end of March, the number of single-family and multi-family units available for sale was 392, compared with 604 at the same point in 2004 and 1,118 at the same point in 2003.
The average list price during the first three months of this year was $527,845 for single-family homes, which was $81,573 higher than the same period a year earlier. For multi-family units, prices averaged $471,808, or $84,698 less in the same period.
The first-quarter sales decline followed a slacking off in building during 2004 that held sales growth to 7 percent last year. By comparison, there was a 14 percent increase in sales of previously owned homes.
During the first quarter, the highest-selling new single-family home project was at OceanPointe in 'Ewa Beach by Haseko Homes with 59 sales. The highest-selling multi-family project was The Colony in Hawai'i Kai by Stanford Carr Development with 98 sales.
Several big new projects are expected to begin sales this year, including two or three condo towers in Kaka'ako, two downtown and maybe a couple in Waikiki. But shortages in labor and certain materials are expected to continue to hold down home supply.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
