HONOLULU – Sue Pang is in the midst of a weeklong camp-out that has deprived her of her bed and left her soaked by sweeping rains – all for a chance at a not-yet-built condominium she is not even sure she can afford.
“It is crazy,” says the 35-year-old woman, eighth in a line of dozens of people braving the elements in hopes of buying one of the units in the first batch up for sale recently at the Moana Pacific development. “But there’s not many condos or houses on the market.”
Hawaii real estate is enjoying one of its biggest booms in decades. Half-million-dollar homes are becoming the norm as demand far outpaces supply. Everyone, it seems, is looking for a little piece of paradise.
Across the country, mortgage rates at historic lows have ignited the housing market. But the market is particularly hot in Hawaii, including Honolulu, a city that can offer panoramic views of the Pacific Ocean but has not seen major condo development in a decade.
Hawaii also saw a real estate boom in the late 1980s and early ’90s, spurred by demand from Japanese investors. But today’s market is not as spectacular as it was back then, when eager buyers walked around with briefcases full of cash.
Paul Brewbaker, the chief economist at Bank of Hawaii, the state’s largest bank, said the strong island economy, with several years of steady job growth and rising income, is the fundamental reason for the boom.
“Interest rates are the fuel that’s being poured on a fire that was already burning,” he said.
Construction of the twin, 46-story oval towers at Moana Pacific between Waikiki and downtown Honolulu will not even begin until fall and is not expected to be complete until the end of 2006. But its developers have already offered 95 of its 706 units – from one-bedrooms starting at about $310,000 to a penthouse at $3.8 million – for sale.
Some prospective buyers began camping out a week ahead of the sale, though most paid others anywhere from $7 an hour to $500 a day to save their place in line.
“People do it for rock concerts,” said Ron Tang, a 54-year-old electrical engineer hoping to get a two-bedroom condo. “It’s no different.”
The island of Oahu, where Honolulu is situated, has posted two years of double-digit percentage increases in the median sales price of condos and single-family homes.
Prices for single-family homes on Oahu, the state’s most populous island, rose 13.4 percent last year to $380,000, after climbing 11.7 percent the year before, according to the Honolulu Board of Realtors. The median condo price rose more than $40,000 in the past two years, to $175,000 at the end of 2003.
Single-family homes sold on Oahu last month spent an average of just 23 days on the market – the shortest time since the Board of Realtors started keeping track in 1987. Oahu condos averaged 34 days before a sale last month.
Similar signs of growth are evident on neighboring islands.
Maui, Molokai and Lanai collectively posted an 18 percent boost in the average price of a single-family home sold in the first two months of 2004 compared with the same period last year. The 173 properties sold in January and February averaged $698,337.
Recent sales of homes at the Ohia development on the island of Maui prompted hundreds of people to spend a night in line for three- and four-bedroom homes priced in the mid-$300,000 to mid-$400,000 range – which is considered affordable housing there.
On the island of Hawaii, the number of building permits hit a record last year. The total of 4,507 was 22 percent higher than 2002.
“There’s just not a lot of there to choose from,” said Keoni Ball, vice president of Carol Ball and Associates realty on Maui. “You see something you like, you better put an offer in that day, and it might have to be above what they’re asking.”
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