Posted on: Thursday, February 3, 2005
O'ahu homes selling past half-million-dollar mark
By Andrew Gomes
Advertiser Staff Writer
O'ahu's housing market started the new year with a new record, as the median price of a previously owned single-family home topped the half-million-dollar mark for the first time.
The $105,000 year-over-year jump is pleasing sellers but challenging buyers — more and more of whom are finding themselves priced out of owning the American Dream on Hawai'i's most populous island.
"It's crazy," said Kendall Hirai, executive director of the Hawaii HomeOwnership Center, a nonprofit organization that assists first-time home buyers. "As the prices of homes climb, less and less people can afford it."
The median condominium price was $224,000, which was less than the $229,300 record in November, but up from $187,000 in January 2004.
Sales volume was relatively flat. Single-family home transactions were down 2.6 percent to 333 last month, compared with 342 in January 2004. Condo sales were up 2.2 percent to 570 vs. 558 during last January.
Realtor board president Judith Kalbrener called the results a "robust start" to the year.
Harvey Shapiro, research economist for the board, said he expects little change in sales volume throughout this year in light of record 2004 growth. However, he does predict prices will continue to rise.
Jack Ainlay, principal broker of Kailua-based Homequest Realtors, said there is huge demand but limited supply in the price range of most buyers.
For instance, he said one client, a young couple with three children, started looking for homes priced around $400,000 in Kailua and Kane'ohe, but found themselves forced to consider homes between $500,000 and $550,000 in their as-yet unfinished search.
"That's the reality," Ainlay said. "It's a difficult market."
According to the Realtor board Web site, there were five single-family homes for sale in Kailua for under $500,000 yesterday, including a 57-year-old home with two bedrooms and 800 square feet for $455,000.
By comparison, there were 44 single-family homes for sale at $1 million or more in the same neighborhood, including a 61-year-old home with two bedrooms and 961 square feet close to the beach for $1.2 million.
Hirai of the HomeOwnership Center said the island's median home-sale price — the price at which half the homes sell for more and half for less — is skewed by the large number of high-end properties being bought, and that there are still many homes available at more affordable prices.
"It may not be your first choice of neighborhood or first choice of dwelling," he said. "You may have to start with a condo and it may be in Pearl City or 'Ewa Beach."
On O'ahu, roughly 500 of the 3,400 single-family homes and condos listed for sale on the Realtor board Web site are priced at $1 million and up. About 1,100 properties — 1,060 of them condos — are priced at $250,000 or less.
Shapiro, the Realtor board's research economist, said relatively low mortgage rates and income levels still make O'ahu homes more attainable now than they were in the early 1990s.
Average rates on a 30-year mortgage offered by Hawai'i lenders have hovered around 5.5 percent during the past several months, after edging over 6 percent in the middle of last year.
Shapiro noted that interest rates most likely will rise this year, which could affect sales, though he said if rates remain below 6 percent the impact should be "minimal."
The January home-sales data represents transactions completed last month on sales agreements struck typically two to four months earlier. Sales of new homes are not included.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
Half of all single-family dwellings on the island sold for more than $505,000 in January, a 26.3 percent rise over the $400,000 median a year earlier, according to the Honolulu Board of Realtors.
