According to statistics released by the Honolulu Board of Realtors, the median sales price of a single-family home on Oahu rose to new heights in June — reaching $700,000 for the first time.
June’s record-breaking high is well above the $677,250 median sales price of a year ago and shatters the previous all-time record of $685,000 set in December.
The demand for housing on Oahu remains very strong, due to low interest rates and low inventory (or supply). And sales momentum continues at a blistering pace with June’s record prices marking the 12th consecutive month of price gains on Oahu.
According to Fannie Cline R, Windward Office Branch Manager at Coldwell Banker Pacific Properties, “Inventory levels are some of the lowest since World War II. Low supply with high demand equals higher prices.”
And while fast-paced, higher prices make buying a home a bit more challenging for buyers, low mortgage interest rates — which ultimately drive the cost of monthly payments — are making home ownership more affordable to a broader segment of Oahu residents despite the increase in prices.
Based on summer activity levels, Oahu buyers remain motivated and are aggressively competing for available inventory as demonstrated by the time properties remain on the market before being snatched up. Latest figures show the time it takes for a seller to open escrow with an accepted contract has dropped for the second straight month from 20 days a year ago to 19 last month — down from 25 days in May of 2013 — in the single-family home category.
Summertime brings with it the extra bonus of being a great time to move. Keiki are out of school, traffic is light and the real estate market is more active than ever.
When comparing the number of closed sales in June to the same period a year ago, the statistics show the activity level about the same — 303 single-family homes closed last month, compared to 308 homes sold a year ago.
Condo sales volume was up 4.8% — 411 sales last month, compared to 392 sales in June 2013.
The median price for Oahu condos also reached record highs in June at $360,000, which was 9.1% higher than the $330,000 from June of 2013, and just barely higher than the previous record of $359,000 set in February this year.
For perspective, 12 years ago, the median price of a single-family home was $335,000 — prices today are more than double that now. Similarly, condo prices have doubled since 2003, 11 years ago, when they were only $175,000. The continued availability of low-cost financing remains the driving factor in motivating buyers to jump into the game and make their first purchase.
Several markets stand out for the significant increases in sales volume as compared to one year ago.
In Hawaii Kai for example, there was a whopping 75% increase in the number of single-family home sales, even while the pace of sales in that category islandwide was down last month. Sales volume in Mililani and the Ewa Plain were also up in two of the last three months, and significantly so last month — 67% and 34% respectively. Single-family home sales in Mililani also rose sharply— up 100% — and prices in this hot neighborhood are up in both categories as well.
Trudy I. Nishihara R, Branch Manager at Coldwell Banker Pacific Properties predicts the central Oahu trend will continue.
“These are the most affordably priced homes,” says Nishihara. “Mililani is preferred based on schools and sports parks and the family environment.”
In the condo segment, sales volume in Kaneohe and Kalihi-Palama was up notably for the third straight month. In Kaneohe particularly, the number of sales doubled as compared to a year ago.
“Kaneohe has increased in sales due to the median sales price in Kailua nearing $1 million,” says Cline. “Most buyers who want Kailua have been priced out of the market, hence have looked to Kaneohe and the Windward Coast as prices are significantly lower and there is more inventory.”
In the Kalihi-Palama condo market, Nishihara says, “These condos may be priced for the investor market.”
Cline says the biggest mistake a buyer can make today is “not being prepared enough to respond quickly when they see a property they want coming on the market.”