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The Honolulu Advertiser
Posted on: Friday, May 7, 2010

April home sales rise as prices fall

 •  A note on Oahu sales data

by Andrew Gomes
Advertiser Staff Writer

Some price momentum leaked out of O'ahu's recovering housing market in April, as median prices slipped despite a continued surge in buying.

The Honolulu Board of Realtors announced yesterday that the median price for previously owned single-family homes sold last month dropped 6.2 percent to $563,000 from $600,000 in the same month last year.

The decline came after three consecutive months of price gains roughly between 4 percent and 11 percent that were viewed by some as evidence that prices probably had already bottomed out, though others aren't so sure.

In the condominium market, the median price was down 2.2 percent to $308,000 from $314,950. The dip followed two months of small increases.

Brian Benton, president of the Honolulu Board of Realtors and an agent with Prudential Locations, said "pretty steady" prices in conjunction with increased buying is still a positive sign for the market.

For the first four months of the year, median prices remain up 0.9 percent for single-family homes and 0.5 percent for condos.

The slight gain mirrors a forecast made in March by the University of Hawai'i Economic Research Organization that the single-family home price this year will be up by 0.9 percent. UHERO predicts that the median condo price will be down 1.1 percent.

A more established trend has been the volume of sales, which have been rising since September. Last month, single-family home sales surged 52.9 percent to 286 from 187 a year earlier. Condo sales jumped 48.3 percent to 390 from 263 in the same period.

Some of the demand since last year has been from a federal tax credit designed to aid the housing market by offering a rebate of up to $8,000 to first-time buyers or up to $6,500 for repeat buyers. The tax credit was available on home purchase contracts signed before May 1, provided sales close by June 30.

It's unclear how many sales were spurred by the tax credit program, and whether the end of the program will cause sales to fall.

Some economists say stimulus programs can have the effect of advancing sales that would have occurred later had there been no stimulus. If that is the case, there would be a drop in sales activity after the stimulus is gone.

In one sign that sales could see a dip ahead, the number of home purchases that were pending in April was down sharply 60 percent for single-family homes compared with sales pending in April 2009. Condo purchases pending in April were down 22 percent.

Because the Honolulu Board of Realtors report counts completed sales, it won't be until June or July when sales contracts signed in May are reflected in the report and exclude any tax credit effect.