It’s official. The summer selling season is off to a hot start.
How hot? In some neighborhoods, the Median Sales Price has increased by more than 20% from the same period a year ago — as was the case in April in two Oahu single-family markets and in seven condo markets! (Note: the Honolulu Board of Realtors breaks Oahu down into 21 neighborhoods) An even more scorching fact is sellers are getting at least 100 percent or more of their asking price — as was the case in four single-family neighborhoods and 10 condo neighborhoods. And in some hot neighborhoods, contracts are being accepted on new listings in less than 10 days on the market — which is the case in three condo and three single-family markets on the island.
So, when we say there is a lot of sizzle in the real estate market on Oahu, it means homes are selling fast, they are selling for more than their asking price, and for more than they were selling for last year.
In particular, the entry-level condo market is hopping. In the Ewa Plain, for example, there was a 61% increase in listings, up from 33 new listings a year ago to 53 in April — meaning more inventory for buyers to choose from. The median sales price was up 24% in that area, from $297,500 a year ago to $370,000 this year, a sizable jump and evidence of a healthy demand as well, and many sellers were receiving offers of 100% of their asking price.
The number of closed sales in May shows demand continues to be strong. There were 305 single-family homes that closed in May, a 14.7% increase from stats gathered a year ago. Condo sales were also up 1.1% from last year.
With inventory rising in both single-family and condo segments of the market, effectively offering more top-notch listings to choose from, properly priced listings are selling in high numbers, and in many neighborhoods for 100% of the asking price or higher. Demand is most definitely keeping up with the increase in supply.
The Median Sales Price of a single-family home on Oahu jumped significantly to $682,000 in May. This represents an 8.3% increase over the $630,000 MSP in May of 2013, and marks the 11th consecutive month of price gains over prior year, according to the Honolulu Board of Realtors.
Condo prices also continue on their impressive climb — up 12.7% from last year to an MSP of $355,000 in May.
Every month, the Honolulu Board of Realtors tracks neighborhood-by-neighborhood performance levels in the 21 different neighborhoods. Because real estate is local, this data is important, as the Median Sales Price for Oahu overall may or may not reflect what’s happening in your neighborhood. There is typically a broad variation of sales statistics across the island.
In April, (the neighborhood data comes out a couple weeks later than the overall stats for Oahu) the condo neighborhood numbers were impressive.
First, the MSP was up in 16 of 21 neighborhoods, and up more than 20% in these seven — Ala Moana-Kakaako (27%), Ewa Plain (24%), Makaha-Nanakuli (41%), Mililani (26%), Pearl City-Aiea (36%), Waialae-Kahala (100%), and Windward Coast (74%).
According to Kalama Kim, sales manager at the Kapolei office of Coldwell Banker Pacific Properties, one cause which has driven sales on the west side of the island are renters jumping into the fray, seeing opportunity due to 100% financing available through Rural Development loans offered by the U.S. Department of Agriculture for properties in designated rural areas. In neighborhoods such as Kapolei, Ewa Beach, Makakilo and Maili, lower price and special loan programs attract first-time homebuyers.
Condo market stats also showed that in nearly half the neighborhoods on Oahu — 10 of 21 — sellers received a median of 100 percent of their asking price or more. This was true in Downtown-Nuuanu, Ewa Plain, Hawaii Kai, Kailua-Waimanalo, Kalihi-Palama, Kaneohe, Kapahulu-Diamond Head, Mililani, Waipahu, and Windward Coast. In many of these markets, multiple buyers competing for the same property has driven prices upward.