Hawaii new-home sales dropped 40% last year
by Andrew Gomes
Advertiser Staff Writer
Homebuilders adjusting to Hawai'i's real estate market downturn reached a nadir last year, producing and selling the fewest new homes in at least 30 years, according to a new industry analysis.
The pullback in Hawai'i home construction, in progress since 2007, put statewide sales of new homes at 2,050 last year fewer than half the recent peak of 4,842 in 2006, according to a report from local housing market researcher Ricky Cassiday.
Last year's tally represented a 40 percent decline from 3,071 sales in 2008 and was the lowest since at least 1980, which is the furthest back that Cassiday's new-home sales data stretches.
"There's not a lot of bodies left at the private builders," he said.
A big part of the decline was due to few condominium high-rise projects being completed last year. Condo towers create big swings in the market because sales close only after completion of construction that typically takes around two years.
However, single-family home and townhome production also fell last year as developers scaled back construction.
"They saw the (downturn) ... coming, so they're dribbling it out," Cassiday said of low-rise home producers.
According to Cassiday's report, local affordable housing developer Marshall Hung recorded the most sales last year, selling out the 268-unit Country Club Village 6 high-rise project in Salt Lake.
D.R. Horton's Schuler Division, which is building single- and multi-family homes on O'ahu, Maui and the Big Island, had the second-most sales at 239, followed by 166 for Intrawest, a Canadian developer building a 700-unit luxury condo on Maui.
Sales were relatively light for what historically has been Hawai'i's largest homebuilder, Castle & Cooke, in large part because it finished 40 years of work developing Mililani in 2008. Castle & Cooke had 127 sales last year.
Another major builder, Haseko Homes, had 122 sales last year in part because it had mostly completed development of its 2,500-home Ocean Pointe community in 'Ewa Beach and moved into selling the first of 2,350 higher-end resort homes at its adjacent Hoakalei Resort.
Of Haseko's sales, 107 were at Hoakalei Resort subdivision Ka Makana, and 15 were at Ocean Pointe.
Richard Dunn, a Haseko executive vice president, said that given the economic climate the company feels fortunate to have had "relatively stable" sales last year, and is hopeful that sales will increase this year.
During the most recent real estate boom, several low-rise developers were building and selling close to or more than 400 homes a year. For instance, 2005 new-home sales totals were 527 for Schuler, 475 for Castle & Cooke, 383 for Stanford Carr Development and 371 for Haseko.
Cassiday said new-home sales this year could get a boost from the 291-unit luxury condo tower Allure Waikiki that is nearing completion. However, he forecasts that new-home sales this year will be near last year's low and that builders will try to increase production for 2011.
"I think most developers are encouraged to see the resale market stabilizing," he said.
In recent months, sales of previously owned homes have been higher than year-earlier totals. Some of the increased demand is being driven by federal tax credits deployed to stimulate the market. The tax incentive is scheduled to end in April, so it remains to be seen whether the recent improvement in the market will continue throughout the year.
Median prices, meanwhile, have yet to show any sustained improvement in the resale market.
The median price for new single-family homes sold last year was $495,555, down from $516,971 in 2008. The recent peak was $649,521 in 2006.
For condos, the median sale price was a record $829,501 last year, up from $677,834 the year before. The jump was largely due to the first batch of sales closing at the luxury Trump International Hotel Waikiki Beach Walk condo-hotel tower.
Cassiday's report said there were 82 initial sales last year at the 462-unit Trump project. Those sales averaged about $1.5 million, according to property records. The units are included in Cassiday's report because Trump Waikiki owners may use the units as residences.
Median condo sale prices on Maui, Kaua'i and the Big Island were down.
The number of sales by island were up slightly on Kaua'i to 95 last year from 92 the year before. On the Big Island, sales dropped to 501 last year from 623 the year before. Maui sales were down to 301 from 432. O'ahu sales were down to 1,153 from 1,924.