Demand continues to outpace Oahu’s housing supply.
Buyers will pay more for a median priced home or condo on Oahu, compared to July 2013. According to the Honolulu Board of Realtors, demand continues to outpace supply — indicative of a very healthy housing market. Indeed, while construction on the island — especially of condos in the Kakaako area — are adding a steady flow of new housing units, there is still a shortage of available housing.
The latest stats reported by HBR indicate the number of active listings in July as compared to a year ago is up in both the single-family and condo segments of the market, up 13.5% and 16.6% respectively. But if you look at the months of remaining inventory — a stat that combines supply and demand into one statistic measuring how long the active listings will last at the current rate of sales — there is still not enough to meet demand. This housing drought condition creates a competitive situation among buyers.
The pace of sales also slightly increased last month (depleting the inventory more quickly), with 300 single-family homes sold, compared to 290 during the same period last year. Condo sales volume was up as well — 444 last month, compared to 426 a year ago. There have only been five months since 2012 with more sales reported.
Pending sales, which are a count of transactions in escrow waiting to close, are up in both segments of the market as well. In fact in the condo market, pending sales are up 41.4% — a sign strong sales volume will likely continue.
The median price of a single-family home last month was $683,500 — an increase of 5.6% from July 2013 when the median was $647,500. Condo prices are up to $351,750, a 1.8% increase from last year. With 13 consecutive months of price gains on Oahu, and a perpetual shortage of island housing, market conditions remain favorable.
Incidentally, year-to-date, the price of a home has jumped 7.6% to $674,700, and condos are up 6.1% to $350,000.
While overall sales volume is high, there are several standout neighborhoods where sales volume in one month hit double digits.
In Mililani Mauka, 12 single-family homes sold in last month — yes, in one month! Twelve homes closed in Maili last month as well, a 140% increase from the previous year. And Ocean Pointe had 14 closed sales.
Condo markets with 10 or more sales in one month include Mililani Mauka (10 sales), Ocean Pointe (11 sales), West Marina in Hawaii Kai (10 sales), Makaha (12 sales), Upper Makakilo (11 sales), Kakaako (32 sales, a 39% spike from a year ago), Makiki area (12 sales), Moiliili (11 sales), Salt Lake (17 sales), Waikiki (93 sales), and Pearlridge (13 sales).
According to Kalama Kim, R, Sales Manager at the Kapolei office of Coldwell Banker Pacific Properties, the combination of low mortgage interest rates, home prices that are lower than the island median sales price, a 100% financing programs like USDA and brand new homes make the Ewa Plain, which includes Ewa and Kapolei, very attractive to first-time home buyers and military personnel.
“There are a few new developments that are releasing homes and townhomes for sale, such as Hoonani, Parkside, Kipuka, Awakea and Kaupapa,” says Kim. “However the number of homes for sale in these projects is significantly less than in the past few years.”