Home sales typically ebb in December, with buyers and sellers traditionally opting to take a holiday break, but as we all know, 2020 has been everything but typical. Oahu housing market stats for December reveal an anything-but-ordinary surge in sales activity.
Indeed, after early reports for 2020 indicated the pandemic slowed sales volume significantly, by year’s end, single-family homes sales were up 2.3% overall, compared to 2019 — boosted by an extraordinary 35.9% jump in volume during December, compared to December 2019.
“Instead of the typical seasonal lull, the Oahu real estate market saw steady — and even slight increases — in activity through the year’s end, despite the ongoing effects of the pandemic,” according to Shannon Heaven, Honolulu Board of Realtors®. “Record-low mortgage rates paired with cautious optimism around reopening continued to drive activity, allowing the market to surpass ‘sales’ and near ‘new listing’ levels compared to the fourth quarter of 2019.”
Although 2020 began with both single-family and condo sales outpacing the start of 2019, Oahu’s real estate market activity experienced a steep decline when COVID-19 hit in mid-March. In reaction to stay-at-home orders, record-high unemployment, health concerns, and general uncertainty brought about by the pandemic, second-quarter sales dropped 17.3% for SF homes and 38.1% for condos, compared to the same quarter 2019, according to HBR.
The real estate industry pivoted to implement new policies and procedures, which allowed for safer client interactions, open houses, and necessary steps to close a transaction, while adhering to public health and safety guidelines. As a result, third-quarter sales improved — for single-family sales up by 4%, while the condo sales improved, but were still down 13.4%.
By the fourth quarter, mortgage rates had dropped more than 1% from the same period in 2019, increasing buyer purchase power, and driving up competition in the market.
“Offers over asking price were commonplace, and the pace of sales grew quicker as the year progressed,” says Heaven.
“The current market continues to be driven by buyers who are leveraging historically low interest rates to either buy their first home, or to right-size to a new home,” says Mike James, president at Coldwell Banker Realty. “While many people in our community have been severely affected economically by the pandemic, those who are still employed see the opportunity to change their living situation during these opportunistic market conditions.”
James says the market is shifting slightly, with new inventory being added. Single-family new listings are up 15.3%, and condo new listings are up 3.6%.
“While months of inventory has dropped to 1.4 months (SF) — meaning that at the current rate of sales, the entire Oahu inventory would be sold in 42 days — new listings have increased in November and December, compared to the same time last year.”
Sales of Single-Family Homes and Condos | December 2020
Source: Honolulu Board of REALTORS®, compiled from MLS data
Double-digit increases in sales volume was the biggest surprise in the Honolulu Board of Realtors® December statistics.
Single-family home sales were up 35.9% — from 309 in December 2019 to 420 last month. This rush of sales in the final month boosted year-end figures, pushing the closed sales total for 2020 up 2.3% over 2019, despite several months of extremely low sales.
Condos too had an unexpected December surge bringing the closings to 514 — up 20.1% from December 2019’s total of 428. Overall, the condo end-of-the-year total was down 13%, compared to 2019’s final tally.
Pending sales, those transactions that remain unclosed in escrow, were also significantly up in December — up 45.4% in the SF category, and up 29.5% in condos, suggesting the possibility that sales will remain strong in January.
Surprising, but maybe not so surprising — as prospective sellers see sales prices on the rise, new listings are (finally) appearing and inventory is increasing. There was a 15.3% increase in new SF home listings in December, and an increase of 3.6% in condo listings last month.
Median Sales Price of Single-Family Homes and Condos | December 2020
Source: Honolulu Board of REALTORS®, compiled from MLS data
The price of Oahu real estate was up in December— trending even higher than the summer months — and setting a new annual median sales price record. Year-over-year, the December MSP single-family home MSP was up 6.1% — a gain of $820,000 in December 2019 to $870,000 last month. Condo prices were also up 6.9%, from $425,500 in December 2019 to $455,000 last month — the second, all-time highest monthly MSP ($461,500 in June 2019).
HBR has tracked the annual median sales prices since 1985. Overall, single-family homes have ticked up 4.69% annually, with condos close behind up an average of 4.54% per year.
In 2020, the annual MSP of a SF home was $830,000 — up from $789,000 at the end of 2019 — and the all-time highest annual MSP gain of 5.2% from 2019.
Condos inched up 2.4% — slightly lower than the average — yet, at $435,000, up from $425,000 at the end of 2019, still the highest MSP on record
NEIGHBORHOOD MARKET STANDOUTS
Median sales prices are up, around the island. Here’s where the standout neighborhoods are — those with the greatest MSP increase. While some of these neighborhoods used to come with long commutes, 2020 lifestyle changes such as working from home, has made commuting less of a concern for some buyers.
James adds, “Homeowners realize that working virtually from their home in the future allows buyers to purchase further out from the city center and get more for their money.”
|Single-family||YTD MSP 2020||YTD MSP 2019||% Increase|
|Aina Haina – Kuliouou||$1,273,750||$1,175,000||8%|
|Kailua – Waimanalo||$1,205,000||$1,080,000||12%|
|Moanalua – Salt Lake||$910,000||$840,500||8%|
|Condos||YTD MSP 2020||YTD MSP 2019||% Increase|
|Kailua – Waimanalo||$607,500||$592,516||3%|
|Mahaka – Nanakuli||$194,500||$180,000||8%|
SOURCE: Honolulu Board of REALTORS®, compiled from MLS data.
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