Median prices climb to new record highs in July

After a relatively sluggish start, Oahu summer sales surged in July to reach new record high median prices — $835,000 for single-family homes and $461,500 for condos.

Though prices rebounded, July also ended with a double-digit bump up of inventory levels, which extends the number of days on the market.

“The summer months have seen a mini-recovery in the real estate market,” says Kalama Kim, Realtor® and principal broker at Coldwell Banker Pacific Properties. “The surge of summer demand slowed down the market shift as evidenced by the increase in unit sales for homes during the month of July. That increase pushed the median sales price up above last year’s mark.”

The continuing drop in mortgage interest rates continues to bolster the market overall. “The low mortgage interest rate environment has allowed buyers more purchasing power,” says Kim.

“Combined with more choices and fewer bidding wars, buyers were able to negotiate lower prices in relation to asking prices, as reflected by the July sales-to-list-price ratio dropping by 2.7%.”

It’s often said, real estate is local. Even in months like July, as prices hit all-time highs — up 5.8% from July 2018 — there were neighborhoods where prices were significantly down. For example: while single-family homes in Downtown/Nuuanu and Windward Coast were up 14% — well ahead of the 5.8% increase island wide — single-family home prices in Aina Haina/Kuliouou were down 31%, and in Hawaii Kai, down 26%.

Notably, for the same neighborhood of Hawaii Kai, condo prices were up 1%, even though condo inventory there increased 83%.

“Real estate in Hawaii has always been sensitive to changes in demand for housing because we have limited supply as an island state,” adds Kim. “Unlike the mainland, we don’t have the land to continue building new homes to meet population increases. This is perhaps why the recent surge in summer demand pushed the median sales prices up in July.”

Sales of Single-Family Homes and Condos |  July 2019

Source: Honolulu Board of REALTORS^®, compiled from MLS data

The number of sales in July was up. Single-family home closed sales increased 12.7%, from 330 sales in July 2018 to 372 closed sales last month. Condo sales bumped up 2.2%, from 502 in July 2018 to 513 in July.

But while the sales volume increase for July was noteworthy, the year-to-date figures for both market segments are down for the first seven months with  1.1% fewer SF home sales and 7.2% less for condos.

Inventory, which already had been on a steady increase in both segments for 15 consecutive months, experienced double-digit increases again in July. The number of active SF home listings rose to 1,621 island-wide, a 17.3% increase over July 2018 levels and active condo listings are up 16.9% to 2,444 available units.

With inventory piling up, the median number of days it takes to open escrow is also up. Year-to-date, SF homes are taking 37.5% longer to sell, and condos are taking 44.4% longer than a year ago.

Median Sales Price of Single-Family Homes and Condos | July 2019

Source: Honolulu Board of REALTORS^®, compiled from MLS data

Despite some of the negative trends, the median sales price for single-family homes was the highest on record — at $835,000 beating out the MSP in July 2018 of $789,500 by 5.8%, and also outpacing the previous all-time high set in September of 2018 of $812,500.

After the first seven months of 2019, however, the rate that prices have increased has dropped to a negligible 0.3% gain — from $782,388 after the first seven months of 2018, to $785,000 after the first seven months this year.

Condo median sales prices also reached an all-time high in July of $461,500, breaking the previous record of $435,000 set in March 2018. The July MSP was also 7.5% ahead of prices in July 2018. However, again, the year-to-date figures were less impressive. Indeed the annual MSP after the first seven months of 2019 was exactly the same as it is this year: $425,000 — a 0% gain.

HOT MARKETS!

This month, we are featuring hot markets for buyers, those neighborhoods, island-wide, where the median sales prices were down in June. This list includes the condo and single-family neighborhoods where prices have dropped more than 10%, perhaps offering buyers more opportunity.

NOTE: The Honolulu Board of Realtors reports sales statistics on the Oahu market every month, for the previous month. Data for individual neighborhoods takes more time, hence the August HBR report showing neighborhood-specific data pulls figures from June.