All-Time Record Reported for Home Prices and Days on the Market
Supersonic days-on-the-market stats set a new record in June. The number of days between the list date and when a home has an accepted sales contract dropped to a record low last month — escrows opened after an average of 12 days on the market for single-family homes (breaking previous record of 14 days set in June 2016), and 13 days on the market for condos (tied with the previous record, set in July 2005).
Barely enough time to hold an open house. But Kalama Kim, principal broker at Coldwell Banker Pacific Properties says open houses are still common in this summer’s supercharged sales environment as a way to “allow sellers to create a competitive environment so they can maximize their negotiation leverage.”
And, after all, today’s savvy buyers know what to expect.
“Since we have been in this type of market for years now, buyers are typically prepared and ready to make offers with a short notice,” Kim adds.
“Buyers paid an average of 99.5% of the list price to purchase a home last month. That number indicates that many buyers are offering over the asking price,” he says. “However, every transaction is different so buyers should determine what their best negotiation strategy should be before offering on the property.”
Back-up offers can be an effective strategy if a buyer does get outbid. But, according to Kim, there may not be much of an incentive for the seller to consider such offers.
“Sellers may choose not to entertain back-up offers because they may be able to get an even higher offer price in the future. Other sellers may entertain back-up offers, especially if they have a deadline on when they need to sell by.”
Single-family home sales volume is the highest in 10 years (MSP then was in the $400,000s) — 370 homes closed escrow in June, spiking upward 14.2% from a year ago. The number of condominiums closed in June, however, declined 2.2% — from 548 in June 2016 to 536 last month.
Indicators in both segments of the market anticipate strong sales volume continuing in coming months as the number of pending home sales — in escrow but not yet closed — is up 38.7% and 15.3% respectively.
With demand as high as it is, it is important to note that inventory is still extremely depleted. Months of remaining inventory — the time it would take to sell the current number of listings (supply) at the current rate of sales (demand) — is extraordinarily short. With only 2.7 months of inventory remaining in the single-family homes segment, and 2.8 months remaining in condos, there continues to be insufficient inventory to meet demand.
“Inventory decreased during the month of June, which further feeds the bidding frenzy buyers have experienced in the past few years,” says Kim. “While new home development has helped the lack of inventory, much more is needed to meet the strong demand.”
Strong ongoing demand for housing on Oahu, a resilient buyer pool, and the continuous reports of lack of inventory, suggest no end is in sight for the buying frenzy. As long as home ownership is a top priority for consumers, the market will thrive.
The median price for a single-family home on Oahu in June reached $795,000 — up 4.6% from the previous all-time high set in June 2016 of $760,000.
The median price for a condo on Oahu in June was $400,000. This marks the fourth all-time highest price, which reached a peak in April at $415,500.
Remember, median price means half the homes on the market have sold for more than, and half are sold at less than the MSP. Sales prices for single-family homes on Oahu currently range from under $450,000 to more than $2 million.
With homes selling quickly and often in 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 year-to-date stats.
Single-family home neighborhood best performers:
Aina Haina – Kuliouou: 100%
Kailua – Waimanalo: 100%
Kalihi – Palama: 100.1%
Condo neighborhood best performers:
Ewa Plain: 101.3%
Kalihi – Palama: 101.5%
Waialae – Kahala: 101.1%
Source: Honolulu Board of REALTORS®, compiled from MLS data. June 2017