Summer sales data show strong activity in more affordable price ranges

As the real estate market kicks into summertime high gear, affordability is at the forefront of buyer’s minds. And with mortgage rates hovering near 7%, and affordability low, buyers — even first-timers — are finding a path to success by zeroing in on the most reasonably-priced properties on the island, even it means downsizing their shopping lists to a smaller slice of paradise.

The Honolulu Board of Realtors® reported in May that median sales prices last month were down slightly in both single-family and condo segments, which may be attributed to a surge in sales in the more affordable price ranges. Single-family home sales in the $899,999-and-below range, for example, accounted for 28% of the total sales last month. Buyers focused in on and closed on properties in regions from Leeward and Ewa neighborhoods to Central Oahu, Pearl City, Kaneohe, and Metro Honolulu.

Condo sales in the $300,000 to $399,999 range surged last month by 43.6% from May 2023, representing the largest share — 18.7%  — of condo sales in May. However, this was not the only factor contributing to the decrease in MSP for condos last month. HBR points out the largest increase in condo sales was with the smaller-sized properties — particularly studios and one-bedroom condos.

To complement the increase in demand, supply (inventory) in both the SF and condo segments reported double-digit increases somewhat easing the crunch in available listings. New single-family listings were up 11.7% from May 2023, bringing the number of active listings up 17.9% from last year. New condo listings were up 13.1% from a year ago, bringing the current active inventory of condos up 47.7% from last year, and offering buyers more choices and more opportunities.

Indeed, since May 1, 345 new single-family homes and 658 new condo listings were listed for sale. Active inventory totals 640 single-family homes to choose from, and 1,651 condos.

“The added inventory is most definitely giving hope to buyers this summer,” says Mike James, president of Coldwell Banker Realty. “In several regions, including Central Oahu, Diamond Head, Kailua, Kaneohe, North Shore and Pearl City, the number of active condo listings are double what they were a year ago.”

Sales of Single-Family Homes and Condos | May 2024
Source: Honolulu Board of REALTORS^®, compiled from MLS data

The sales volume of single-family homes in May was down, although, condo sales were up.

The number of single-family homes that closed in May was down 5% — from 262 in May 2023 to 249 last month. However, the number of SF homes closed since January 1 are up 7.3% from a year ago — from 1,029 homes that closed in the first five months of 2023, to 1,104 closings during the same period this year.

Condo sales volume, on the other hand, was up 9.1% last month — from 438 a year ago to 478 last month. Yet, year-to-date, condo sales are behind slightly, dropping 1.2% from 1,902 closings in 2023, to 1,879 at the end of May 2024. Last month’s dramatic increase may point to the likelihood buyers in general are opting for lower-priced buying options to offset the decrease in affordability due to higher rates and higher prices.

Median Sales Price of Single-Family Homes and Condos | May 2024
Source: Honolulu Board of REALTORS^®, compiled from MLS data

With affordability low and inventory up, the latest data show the median sales prices of both single-family homes and condos on Oahu are slightly lower — down 2.2% and 2%, respectively — from a year ago.

In May, single-family homes sold for a median sales price of $1,085,000, down slightly from $1,109,000 in May 2023.

Condos sold for an MSP of $495,000, down from $505,000 a year ago.

However, across the board, the year-to-date MSPs increased by a modest 2.4% and 1.0%, respectively. Year-to-date, the MSP of a SF home is $1,074,500, and of a condo is $505,000.

NEIGHBORHOOD MARKET STANDOUTS

This month’s spotlight is on Oahu’s more affordable neighborhoods. Specifically, where homes and condos remain near or below Oahu’s median sales prices. Check it out.