Condo market affordable -Buyers have found new hope in condos

 

Part 1 of 2 series

 

HONOLULU ADVERTISER , July 10 2005

BY LISA SCONTRAS

Custom Publishing Group

 

According to June sales statistics released by the Honolulu Board of Realtors this week, condominium sales prices are still reasonable. Although Oahu condo prices were slightly down from May to a median of $264,000, they have shown a rise of 25.7 percent from one year ago. Yet for many entry-level buyers and investors, condo price tags have become more affordable and have been selling at a record clip.

 

 

With the median price of a single-family home topping $600,000 in May and at $593,300 in June, homebuyers who thought their dream of homeownership was slipping away as prices escalated out of reach, have found new hope in the condominium market. Recent months have shown a definite shift in sales geared towards buying condos — which are selling at almost twice the rate of single-family homes.

 

“Rising prices have moved some purchasers from the single-family home market segment into the more affordable condominium category.” says HBR research economist Harvey Shapiro. “We expect this trend of shifting sales patterns to continue,” he says, “particularly if interest rates rise.’

 

Rising prices have also motivated many condo owners to put their properties on the market to meet the demand. But in June, Shapiro notes the lack of inventory was evident by the fact that 29.4 percent of condominiums were sold at more than the asking price — a record on Oahu.

 

The current demand for condos is unprecedented. The popularity of buying a condo is growing among all generations ranging from baby boomers to second-home buyers and entry-level buyers.

 

Paul H. Brewbaker, chief economist at Bank of Hawaii, compares condos to other types of investments based on recent performance. “Between Google stock or a condo on Maui? I’m going with the condo.”

 

OAHU MEDIAN CONDO PRICES

 

All geographic areas experienced higher median prices in the first quarter 2005.

 

 

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