High buyer demand and low inventory pushed housing prices on Oahu higher this month, a notable surge for the historically slower winter season. Year-over-year comparisons in price in both the single-family homes and condominium segments of the market are up, a testament, according to Coldwell Banker Pacific Properties managers, that Oahu’s limited supply along with low mortgage interest rates have captured the attention of buyers.
“We continue to see multiple offers over the asking price for areas that are popular,” says Patti Nakagawa (R), and branch manager at Coldwell’s King Street office. “The combination of high buyer demand and low months of inventory have resulted in a rise in median price.”
Kalama Kim (R), branch manager at Coldwell’s Kapolei office, agrees. “High demand and low inventory usually means an increase in prices. With months of remaining inventory dropping to 2.6 for homes and very little new construction of SF homes, we could see spikes throughout the year in home prices because of demand over supply.”
During the first three months of 2014, 682 single-family homes were sold, as compared to 669 sales in the same 3-month period of 2013 — an increase this year of 1.9%.
Condominium sales volume is also up — from 976 during the first quarter of 2013 to 993 this year.
Even with a moderate increase in the number of active listings in March (as compared to a year ago), which has slightly bumped up inventory, the increase in buyer demand due to rising mortgage interest rate pressure, has kept the rate of sales ahead of last year’s pace.
The median sales price for a piece of real estate on Oahu is what most people use as the real test of the market’s strength. In March, for the ninth consecutive month, prices for both single-family homes and condos saw year-over-year rises.
The March 2014 median sale price for a single-family home jumped to $657,000 — a year-over-year gain of 2.7%. By the end of the first quarter, the median price of a SF home was up 9.2% over the first three months of 2013 to $655,000 (from $600,000 in 1Q 2013).
Condo prices in March were up as well. The median sale price of a condominium last month was $350,000, compared to $340,000 a year ago.
Every month, the Honolulu Board of Realtors tracks a variety of statistics neighborhood-by-neighborhood, which shows specific performance levels in 21 different neighborhoods.
In February 2014, single-family sellers in six of Oahu’s 21 neighborhoods received a median of 100 percent of their asking price or more. These hot neighborhoods include: Kailua-Waimanlo (102.4%), Kaneohe (100.1%), Kapahulu-Diamond Head (104.8%), Makiki-Moiliili (101.1%), Pearl City-Aiea (103.8%), and Waipahu (100.0%).
Prices in excess of the asking price often result when more than one set of buyers are interested in a property. Buyers offer more than the asking price in hopes of beating out the competition, as has been the case in a growing number of hot markets around the island.
There were eight such hot condo neighborhoods as well: Ewa Plain (100.7%), Kailua-Waimanalo (101.2%), Kalihi-Palama (100%), Kaneohe (100.5%), Makakilo (101.8%), Makiki-Moiliili (100%), Waialae-Kahala (101.3%) and Windward Coast (100%).
According to Nakagawa, the median days on the market until a contract is accepted is another big indicator of continued high buyer demand.
In March, the single-family home median Days on the Market was 17, compared to 22 a year ago. Condominium median days on market is at the same level as a year ago, but remains low at 25 days on the market — meaning condos are going into escrow within a few weeks of being listed.
For a closer look at neighborhood-by-neighborhood trends in your area, or to see which neighborhoods on Oahu are hottest, contact me.