Real estate boom enriching some Hawaiians

HONOLULU — Joshua Powell bought a run-down home for $250,000 in 2000, poured in money and sweat, and sold the renovated property in November for $940,000.

With the profits, he traded up to a $1.2 million four-bedroom fixer-upper in upscale Kahala and plans to repeat that success.

"I'll keep doing it as long as the market lets me. This one's already worth more than when I bought it," he said.

Nearby but a world away, formerly homeless Bob Hernandez rents space in a Kaimuki transitional home while trying to put his life and family back together. But he can't stay there forever, and the earnings from his masonry work won't go far in today's high-priced rental market. He's worried that homelessness might be right around the corner again.

"I'm stressing these days. I want to be a normal functioning human being in society again, but it's just so expensive," he said. "I just pray and trust in God."

Two people, two opposing perspectives, yet neither of them uncommon in an overheated housing market that means very different things to different

people.

In September 2001, when the housing boom took off, Oahu's median single-family

home price was $250,000. By March it had more than doubled to $550,000, creating unprece-

dented wealth for local homeowners and adding fuel to the state's economic re- bound.

The percentage of households that own the home they live in — a statistic linked to less crime, higher graduation rates and other positives — rose to 67 percent in 2004, according to the U.S. Census Bureau, compared with just 50 percent 20 years earlier.

Not everyone is celebrating.

The buying boom has sucked up rental inventory and driven up rents, squeezing the most vulnerable sectors of society. Homeless agencies fear a swelling population of people on the verge of homelessness.

"There are always going to be winners and losers — people who were ready and those who weren't. It's the nature of the game," said Paul Brewbaker, Bank of Hawaii's chief economist.

More winners and losers might yet be created. Home-buyers continue to pile into the market in the belief that the current boom still has legs, and they could be right.