Oahu’s housing market had its challenges in 2016, including low inventory of homes for sale, rising prices that challenged would-be buyers, and political uncertainty with the presidential election. But despite the headwinds, this turned out to be a good year overall for our local housing market.
Many home sellers once again enjoyed strong gains in sale prices. The median sale price for single-family homes on Oahu through November (the latest data available) reached $750,000, up 4.8% from the same month a year ago, according to MLS data analyzed by Coldwell Banker. Median sales prices for condos reached $395,000, up 13.7% from the same month a year ago, fueled by new condo projects in Kaka’ako such as Waiea that Coldwell Banker represented as exclusive broker.
Strong buyer demand from the mainland and overseas, a healthy local economy, and a continuing decline in the inventory of homes on the market all combined to make 2016 a seller’s market on Oahu for much of the year. The strong economy fueled demand for homes on Oahu, but especially for condos and townhouses.
The year saw a continuation of mortgage rates that remained near historic lows much of the year, helping make home purchases more affordable. But in recent weeks, key lending rates began to tick higher, which could present challenges to the market if that continues into the new year.
According to Freddie Mac, 30-year fixed rate mortgages in the U.S. averaged 4.08 percent in the week ending November 27; however, rates are still below historical averages. During the height of the housing market in 2007, for example, the rate surpassed 6 percent.
Freddie Mac Chief Economist Sean Becketti in analyzing the recent bump in mortgage rates stated, “If rates stick at these levels, expect a final burst of home sales and refinances as ‘fence sitters’ try to beat further increases, then a marked slowdown in housing activity.”
One measure of the tight inventory is the median days on market for the typical home before it sells. For single-family homes, the median was just 17 days so far this year, down from 20 days last year, according to the Honolulu Board of Realtors (HBR). For condominiums, the median days on market is only 19 days.
The shortage of homes for sale continued to result in multiple offers for some properties, which resulted in sales for certain homes at above-list price. It also may have kept overall home sales on Oahu from posting even stronger gains than they did.
As of November, sales of all types of homes year to date on Oahu totaled 8,334, up over 7% percent from the 7,762 sales during the same period in 2015, according to Coldwell Banker analysis.
HBR reported that condos were the strongest segment of the Oahu housing market with sales climbing 8.2 percent year to date through November compared to a year ago. Sales of single-family homes rose 6.1% percent year to date compared to the same 11 months last year.
As 2016 draws to a close and we look ahead to 2017, there are reasons to be encouraged about the outlook for the Oahu housing market. If you’ve been thinking about selling your home, now may be a good time to make your move. Mortgage rates are still low by historical standards, although that could change in the coming year if rates continue to rise. And for now, we’re still enjoying a seller’s market in many of our communities.
Great article MIKE! Thanks for the information and being a great leader too!!