No End In Sight for Oahu’s Seller’s Market
According to July stats gathered by the Honolulu Board of REALTORS®, Oahu prices and sales activity continue on a soaring trajectory, while inventory remains low. However, it is possible that rising home prices will lead to larger equity positions for current homeowners, luring them to list their properties on the market and cash in on that equity.
The median price for condominiums on Oahu reached an all-time high in July. Prices of single-family homes were up as well, as was sales volume for both categories. And while the number of new listings is higher in July than what was reported in July 2016, overall, the “months of inventory remaining” — a stat that measures how long the active listings will last at the current rate of sales — fell off dramatically from a year ago. The months of single-family home inventory remaining fell nearly 20% from the July 2016 tally, while the months of condo inventory remaining was down by 10%.
HBR’s housing supply data also indicates a sharp decline in the number of single-family homes priced $350,000 and below, with July months of inventory in this price range down by 40% year-over-year. On the other hand, inventory for SF homes priced in the $475,001 to $550,000 range is up 33% during the same period of time. This likely reflects the shift upward in the median price — the percentage of homes in below the $350,000 benchmark is becoming difficult to come by.
“Last month’s sales reminded us that we still need more inventory on the market to keep up with demand,” says Kalama Kim, principal broker at Coldwell Banker Pacific Properties. “At the current rate of sales, if nothing new came on the market for sale, everything would be sold out in less than 80 days.”
Similarly, months of condo inventory in the under $200,000 range was down more than 20% last month, as compared to July 2016 figures, while a 28% increase in months of inventory was noted in condos priced between $200,001 and $250,000. Like what has occurred with SF homes, the bulk of condo sales have migrated into a higher price bracket.
Pending sales were also up overall, and in every single-family price point category on Oahu last month. With pending sales up significantly for 11 consecutive months — including July’s pending sales up 34.3% in the SF segment and up more than 25% for condos — it is likely the momentum will continue into next month.
“Pending sales took off last month continuing an increased trend of sellers accepting offers at a high rate,” says Kim. “Pending sales may be an indicator of a large bump in closed sales a few months down the road.”
July single-family sales activity closed up 4% from 322 sales closed in July 2016, to 335 last month. Condo sales activity was also up 7% from a year ago — from 444 in July 2016 to 475 last month. Demand continues to outpace supply.
“The demand for housing on Oahu seems almost unstoppable as we have seen a steady increase for many years now,” Kim adds.
The median price for condominiums in July was $425,000, a 6.3% increase from the same period last year, which broke the previous condo record of $415,500 set in April. With condos and townhomes at midrange price points being likely alternatives for buyers frustrated by affordable single-family home inventory, expect the condo MSP to continue to rise.
The median price for a SF home increased by 0.5% to $750,000 — a fully sustainable rate.
“While we saw a record high median price for condos last month at $425,000, and a record high median sales price for single-family homes the previous month at $795,000, the rates of increase has been steady, as opposed to skyrocketing,” Kim explains. “For example, last month’s increase in median price was only 2.7% and 3.9% for SF homes and condos respectively.”
With homes selling quickly and offers often subject to bidding wars, this month’s hottest markets are those neighborhoods where the percentage of sales price to original price received by the seller is consistently 100% or more, according to the latest year-to-date stats.
NOTE: The price range where the seller received the highest percentage of original list price received was $550,001 to $650,000 — sellers in that price range received 99.8% of their asking price. The sellers receiving the lowest list-to-sales price ratio were in the $1.9 million and higher category.
Single-family home neighborhood best performers:
Kalihi – Palama: 100.8%
Condo neighborhood best performers:
Ewa Plain: 100.6%
Hawaii Kai: 100.3%
Makaha – Nanakuli: 100%
Source: Honolulu Board of REALTORS®, compiled from MLS data. July 2017