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The Honolulu Advertiser
Posted on: Wednesday, May 3, 2006

Rain dampened home sales

By Andrew Gomes
Advertiser Staff Writer

"For sale" signs were posted this week on both sides of the 4300 block of Kahala Avenue, one of O'ahu's pricier neighborhoods. For all of O'ahu, the median home price last month was $615,000 compared with $650,000 in March and $545,000 in April 2005.

DEBORAH BOOKER | The Honolulu Advertiser

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O'ahu home resales in April tumbled by their largest margin this year, helping push prices below the previous month but not below a year earlier.

Sales of previously owned single-family homes fell 21 percent last month to 332 from 418 a year ago, according to the Honolulu Board of Realtors.

The decline helped push April's median price to $615,000, which is about where the median was in January and February before it jumped to a record $650,000 in March. The median in April 2005 was $545,000.

There was a 23 percent drop in April condominium purchases to 584 from 754 a year earlier. That helped push the median price to $296,500, which was down from $312,000 in March and the February record of $315,000, but up from $295,000 in January. The median in April 2005 was $243,000.

Contributing to the softening market were extremely wet weather and prospective buyers who are hesitant about purchasing homes at prices that appear to be at their peak.

Autumn Matsuwaki, a Hawai'i Kai resident with two children, said she would casually attend the occasional open house with her husband, who's a real estate appraiser, but his advice usually was to wait.

"He was telling me don't buy now because it's too expensive," Matsuwaki said, adding that her father suggested they wait a year before buying their first home.

But after hearing about a four-bedroom, three-bathroom townhouse built three years ago in the East O'ahu community, Matsuwaki said she and her husband couldn't pass up the opportunity even at $690,000.

"We're not going to find another almost-new home at that price in Hawai'i Kai," she said.

Bad weather didn't deter Matsuwaki from buying her house last month, but the Honolulu Board of Realtors said record rainfall earlier this year did keep some prospective buyers away.

"The weather was a significant negative factor in the April housing market," said Harvey Shapiro, research economist for the board.

Mary Flood, board president and a sales-and-marketing vice president with the local Schuler Division of home developer D.R. Horton, said the rain kept some buyers out of the home hunt.

"While there shouldn't be any long-term effects from this unusual weather, it certainly played a role in the April sales statistics," she said.

The rain, which fell heavily in late February and was followed by record downpours and much flooding in March, affected April home sales because April sales figures reflect purchase contracts typically arranged one to three months earlier.

This timing suggests that May sales also will be diminished by the deluge of rain earlier this year.

Still, local housing market analysts at the start of the year predicted that the number of sales in 2006 will decline and that median prices will stabilize at a level 5 percent to 20 percent higher than last year.

For the first four months of the year, the number of sales was down 9 percent for single-family homes and down 10 percent for condos, compared with the same period in 2005.

The median price during the same time frame is up 16 percent for single-family homes and up 32 percent for condos.

Comparing last month with April 2005, the median price was up 13 percent for single-family homes and up 22 percent for condos. The median is a point at which half the sales are for more and half for less.

Inventory in April was little changed from the previous month, with 1,644 single-family homes on the market, an increase of two units from 1,642 in March. There were 2,278 condos available last month, 30 more than 2,248 in March. However, inventory in recent months has been about double what it was a year earlier.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.

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