“Unless costs of materials, including the land, come down, builders will have to work very hard to increase their levels of production,” Cassiday said. “My fear is that this constraint on housing will pressure prices to move higher, especially at the low end.”
BY BOBBY COMMAND
WEST HAWAII TODAY
bcommand@westhawaiitoday.com
Housing prices continue to climb
Residential properties up 27 percent
More than $11 billion in gross revenues was realized last year in Hawaii by residential properties, according to a Honolulu market watcher.
Ricky Cassiday also told a group of Honolulu businessmen during a recent speech that the average price of a residential unit, including new or previously owned single-family homes and condominiums was $442,661, up 27 percent from $349,107 in 2004.
According to Cassiday, the Big Island was at $417,554, less than Kauai, which boasted the highest average prices in the state at $591,776, but more than Oahu, which came in at $402,539.
Cassiday, who owns Real Estate Market Research Co., said that the $11.185 billion generated by the sales and resales of resale and newly built homes and condos was up 29 percent from $8.65 billion generated in 2004.
This figure, according to Cassiday, does not include the sale of vacant land and home sites.
Total unit sales were 25,189 homes, up 2 percent from 2004. Total statewide sales of newly built units were 4,082 units, up 4 percent from 2004. Resales last year totaled 21,107 units, up 2 percent from 2004.
New sales constituted 16 percent of this total unit sales count, which is the same share of market as it captured last year, but well under the 25-year average of 29 percent, pointing out an opportunity to supply more housing.
The average price for a newly built home or condominium was $606,899 in 2005, up 22 percent from 2004. The average price for a resale dwelling was $410,898, up 27 percent from 2004.
The new dwelling’s premium over the resale average price was 48 percent, down from 51 percent in 2004. The 25-year average for this premium (new over resale) is 18 percent which ballooned in 1997-2000, a period characterized by slack primary housing demand at the lower price segments as opposed to strong demand in the higher price segments.
Cassiday said the top residential builders on the Big Island were DH Horton-Schuler Homes Division, and Stanford Carr Development, each producing 50 homes. Horton-Schuler is currently developing Pualani Estates in Kailua-Kona while Carr is now selling units built at Fairways at Mauna Lani, Kualani at Mauna Lani and Waikoloa Colony Villas.
Towne Development, which is currently selling Alii Heights and Alii Heights Mauka on Kahaluu and Sunset Ridge at Waikoloa, produced an additional 40 homes in 2004.
For the first time ever, Horton-Schuler was the top home producer in the state, with 527 units for the year, followed by Castle and Cooke, with 475 closings, all on Oahu; Carr with 383 closings, split evenly between Oahu and the neighbor islands, Haseko Homes with 371 closings, all on Oahu, and Towne Development with 277 closings, mostly on Oahu.
Both Castle and Cooke, which is producing the 700-unit Wehilani at Waikoloa, and Stanford Carr, which is expected to begin work soon on the 1,500-unit Kaloko Heights, will likely be among the largest producers on the Big Island in the coming years.
They were followed by Gentry Homes, Marshall Hung and Centex Destination Properties.
Despite the added production, Cassiday said prices could still spike because of added production costs, significantly in steel.
“Unless costs of materials, including the land, come down, builders will have to work very hard to increase their levels of production,” Cassiday said. “My fear is that this constraint on housing will pressure prices to move higher, especially at the low end.”