Oahu’s Real Estate Market Update: Low Inventory Continues to Drive Prices Up

The median price of a single-family home rose again in September to $678,500.

And, if you look closely at recent Honolulu Board of REALTORS® statistics, low inventory again continues to be a factor driving prices upward.

Each month the Honolulu Board of REALTORS® (HBR) combines two stats — number of pending sales and active listings — to compute the Months of Inventory Remaining. This figure is derived by comparing the number of active listings available to the average monthly pending sales from the past 12 months. This gauges the balance of supply and demand, and indicates the length of time it will take to sell all of the properties that are currently available.

In September, HBR reported that we have 2.9 months of inventory remaining. In a balanced market, in which there is enough inventory to meet demand, experts expect to see 6 to 8 months of inventory. Less than 6 months — and September numbers are quite a bit under that mark — indicates there is insufficient inventory to meet demand. When this occurs, there are fewer listings available to buyers, which can (and does) result in multiple offers or sales prices above asking prices.

There are other factors also measuring demand: Days on the market, which was 19 days last month; and percentage of original asking price received, which for single-family homes on Oahu was at 97%.

Kalama Kim, (R) and Branch Manager at Coldwell Banker Pacific Properties, says there are also several positive economic indicators, which, in turn are affecting our local housing market.

“Low unemployment rates allow more people to qualify for a mortgage, diminishing oil prices boosts consumer confidence and keeps more money in consumer’s pocketbooks, and low mortgage interest rates (all are having a positive effect),” says Kim.

The number of single-family homes that closed in September was up 5% — from 303 sales in September 2013 to 318 homes sold last month.

Taking a look at the condo segment, the number of sales that closed was down 1.4% — from 421 condos closing a year ago, to 415 closings last month.

In the Ewa Plain, there was a noteworthy 77 closed single-family sales and 51 closed condo sales during the month of September — a two-year record high in both cases.

“The lower home prices in Ewa as compared to the rest of the island attracts first-time homebuyers coupled with 100% financing options available for both military and non-military personnel has boosted unit sales on the Plain,” says Kim.

Sales volume in Moanalua-Salt Lake in September also tied the two-year record of 8 closings. Mililani had 42 condo sales last month, the most in at least two years and up 62% from last year. And the Ewa Plain closed 51 condos in September — which ties the number from July this year for a two-year record.

Single-family homes on Oahu are now selling for a median of $678,500, as compared to $675,000 during the same timeframe last year, while the median sales price of a condo dropped 0.3% — from $348,000 a year ago, to $347,000 last month.

Yet in both segments, sellers are receiving very close to their original asking price. Condo sellers received 98.4% of their asking price, and single-family sellers received 98.6% of their asking price.

In downtown Nuuanu, the median price of a Single Family homes was up to $1,212,500, the second highest in two years.

Other noteworthy price increases around the island include Makaha-Nanakuli, where the median sales price was up to $410,000 — a two-year high.

Twenty-nine single-family neighborhoods hit the million-dollar mark in September. And while it should be noted that some of these neighborhoods only had one sale, it is still a distinction that makes these our hot markets for the month.

• Diamond Head $3,070,000
• Hawaii Loa Ridge $1,845.000
• St. Louis $1,020,000
• Waialae Iki $1,365,000
• Waialae Nui Ridge $1,229,000
• Wailupe area $1,950,000
• Anchorage $1,275,000
• Hahaione –upper $1,585,000
• Koko Kai $2,520,000
• Mariner’s Cove $1,699,000
• Sunset Beach area $1,950,000
• Enchanted Lake $1,199,500
• Kaimalino $2,105,000
• Kalama-Coconut Grove $1,182,500
• Lanikai $1,435,000
• Maunawili $1,485,000
• Alii Shores $1,400,000
• Kaawa $1,525,000
• Lilipuna $1,815,000
• Lulani Ocean $1,400,000
• Mahinui $1,299,000
• Royal Summit $1,800,000
• Dowsett $1,575,000
• Lakeside $1,050,000
• Manoa $1,088,000
• Manoa-Woodlawn $1,108,000
• Manoa-upper $1,274,000
• Puunui $1,100,000
• Salt Lake $1,067,000

The Market Update is posted each month and can be viewed online here.