Inventory down, price up, as market deals with COVID

“The Oahu real estate market has remained competitive even amid the pandemic, as the lack of inventory paired with low interest rates continue to drive demand,” according to Tricia Nekota, Honolulu Board of Realtors®.

Remarkably, year-to-date median sales prices are up in both the single-family and condo segments on Oahu. More than 50% of October’s single-family sales in the $700,000 to $899,999 range sold above the asking price, while new listings were down dramatically in both segments. Listings are spending very little time on the market before being sold — single-family homes are selling after a median of 10 days on the market. Such a lightning market would typically motivate prospective sellers to list their properties, yet some are holding back.

“While virtual home tours, scheduled showings and enhanced health and safety protocols have allowed us to continue serving buyers and sellers, the stats clearly indicate the ongoing need for more housing inventory,” says Nekota.

“We are experiencing a home inventory crisis because those who would normally take advantage of the strong market and sell, may not have confidence on where they would move to after selling,” says Kalama Kim, principal broker at Coldwell Banker Realty. “People seem to be staying put during the COVID-19-era because of safety and economic concerns, which equates to fewer homes for sale.”

In accordance with Tier 2 of Mayor Caldwell’s Honolulu Recovery Framework, Realtors® continue to host modified in-person open house showings, which are limited to no more than five people in a home at any given time. As an essential business, real estate remains open with modifications. Realtors® continue to serve the housing needs of their clients, buyers, sellers, and landlords while observing social distancing, wearing a mask, and utilizing heightened sanitation practices.

“Our industry and Coldwell Banker Realty sales associates are taking reasonable precautions to keep owners and visitors protected,” Kim adds. “The precautions include, spacing out appointments to see the property and following a specific set of guidelines during an open house to ensure distancing and sanitizing.”

According to the Honolulu Board of Realtors®, the median single-family home sales are grossing 100% of the original list price. For condos, the median sale price is 98.3% of the original list price.

“The low median days on market is a reflection of the velocity of the market,” says Kim. “It feels like 0-to-60 in two seconds because buyers are waiting to pounce on new listings.”

Sales of Single-Family Homes and Condos | October 2020
Source: Honolulu Board of REALTORS®, compiled from MLS data

In October, single-family home closings were near the same pace as a year ago — down only 0.6% — from 347 recorded sales in October 2019 to 345 sales last month. Despite widespread financial and economic impact from COVID-19, 2020 sales volume is only down slightly — year-to-date closed sales down 1.3% — from 3,121 closed sales in the first 10 months of 2019, to 3,080 sales during the same period in 2020.

The bulk of October sales fell in the $800,000 to $1,199,999 price range, which was up 39.2%. More than 50% of the homes that sold for more-than-the-asking price, fell into the $700,000 to $899,000 price range.

Condo sales volume in October was up 1.7%, from 472 a year ago, to 480 last month.

The modest jump in condo sales activity last month, was the first increase — year-over-year — since January, however, condo sales, year-to-date, have fallen 16.7% — from 4,546 units sold in the first 10 months of 2019 to 3,785 sales during the first 10 months of 2020.

Median Sales Price of Single-Family Homes and Condos | October 2020
Source: Honolulu Board of REALTORS®, compiled from MLS data

Overall, year-to-date median sales prices on Oahu are up. Single-family home MSP gaining 4.3% year-to-date — from $785,000 at the end of October 2019 to $818,500 during the same period in 2020. Condo MSP is up 1.1% year-to-date — from $428,000 in 2019 to $432,750 in 2020.

“Low mortgage interest rates either allow people to save money (on their monthly payments) or purchase a higher-priced home,” says Kim. “The massive jump up in the MSP could be a result of those who are leveraging rates to afford more. Another possibility is that those with wealth have now entered the market, purchasing a larger number of higher-priced homes pulling up the median sales price on Oahu.”

For October, the SF MSP gained 10.9% — compared to October 2019 when the MSP was $780,000 — up to $865,000.

Condo MSP was down slightly in October, 1.7% — from $441,000 in October 2019, to $439,500 last month.

“Owner-occupied demand is vastly stronger than investor demand in today’s market because of a higher amount of risk, giving the pandemic and the eviction moratorium,” says Kim, on why condo sales have reacted differently to the market conditions than SF homes.

NEIGHBORHOOD MARKET STANDOUTS

Median sales prices are up, year-to-date, island-wide. The following list of standout neighborhoods recorded the highest percentage increases

Single-family YTD MSP 2020YTD MSP 2019% Increase
Aina Haina – Kuliouou  $1,258,000$1,170,0008%
Hawaii Kai$1,234,000$1,089,00013%
Kailua -Waimanalo$1,200,0001,100,0009%
Makakilo$780,000$704,00011%
North Shore $1,100,000$930,00018%
    Condos 
Aina Haina – Kuliouou$805,500$685,00018%
Wahiawa$235,000$222,0006%
Waipahu$400,000$379,0006%
Windward Coast$287,000$262,5009%
SOURCE: Honolulu Board of REALTORS® , compiled from MLS data.
By |2020-11-21T11:40:59-10:00November 21, 2020|

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