Sales momentum builds as inventory struggles to keep up

Despite the historic market ebbs (pre-COVID) during the winter months, home sales in January 2021 kicked off at a feverish pitch — outperforming sales from January 2020 — and pushing prices to new highs.

All three inventory-tracking indicators — new listings, months of inventory remaining, and active listings — show double-digit drops compared to January 2020. With fewer homes on the market coupled with low interest rates, buyer competition has surged, which has created a perfect storm for sellers looking to sell quickly for top dollar.

“With numerous buyers entering bids over asking price, a significant decline in new listings, and historically-low interest rates, homes are flying off the market,” says Shannon Heaven, president of the Honolulu Board of Realtors®.

Kalama Kim, principal broker at Coldwell Banker Realty, adds that market conditions have favorable aspects for both buyers and sellers so it can be a win-win for both buyers and sellers.

“The top reason why sellers should sell in this market is the extreme negotiating leverage caused by multiple offers,” Kim says. “Listings are selling in a blink of an eye, and sellers are reaping the rewards by obtaining offers higher than their list price. Buyers have decided that extremely low mortgage interest rates offset any uncertainty the pandemic brings.”

Steep competition continued to drive the market’s pace in January, with single-family homes spending a brisk median of nine days on the market before entering into a contract, tying with the record-nine-day low set in September 2020. To top off the break neck transactions, sellers commanded more than the asking price in 54.6% of all single-family sales in January, according to HBR. Condos, likewise, closed above original asking prices in 30% of the sales — more than triple the number that did so in January 2020.

Sales of Single-Family Homes and Condos | January 2021
Source: Honolulu Board of REALTORS®, compiled from MLS data

Closed sales activity on Oahu was up across the board in January.

Single-family home sales were up 9.8% — from 265 in January 2020 to 291 last month, and condo sales gained 3.4% — up from 379 to 392 during the same period.

Pending sales are transactions still in escrow at the close of the month and are a forward-looking indicator that suggests momentum trends. Single-family pending sales were up 25.1% from January 2020 — from 411 homes in escrow at the end of January 2020 to 514 homes yet to close last month. Condo pending sales increased 16.6% — from 543 a year ago to 633 last month.

Median Sales Price of Single-Family Homes and Condos | January 2021
Source: Honolulu Board of REALTORS®, compiled from MLS data

It is noteworthy for prices to hit all-time high marks in the winter months, but a new record median sales price for single-family homes of $883,000 was set in January, marking a 14.7% increase year-over-year. The previous monthly-record high was $880,000 set in September 2020  — the first time MSP had broken the $850,000 mark — and has consistently been over $850,000 ever since.

The January MSP for condos on Oahu came in at $452,000, a 5.4% increase over January 2020, marking only the third time the condo MSP exceeded $450,000, yet the record remains $461,500, set in July 2019.

HAWAII KAI AND NORTH SHORE TOP MARKET STANDOUTS FOR 2020

Neighborhood year-end data is in. Below are those neighborhoods with the most significant MSP increases for the year — including SF homes with an increase of at least 10%, and condos gaining 5% or more.

“Though buyer interest in condos appears to be picking up, single-family homes continue to demand consumer attention as the hot-ticket item,” says Heaven.

Single-family YTD MSP 2020YTD MSP 2019% Increase
Aina Haina – Kuliouou  $1,311,000$1,165,00013%
Hawaii Kai$1,265,000$1,090,00016%
Kailua – Waimanalo$1,200,000$1,095,00010%
Makakilo       $789,500$717,00010%
North Shore$1,135,000$947,50020%

CondosYTD MSP 2020YTD MSP 2019% Increase
Mahaka – Nanakuli$196,500$180,0009%
North Shore$487,850$462,5005%
Wahiawa$233,000$222,5005%
Waipahu$410,000$375,0009%

SOURCE: Honolulu Board of REALTORS®, compiled from MLS data.

By |2021-02-21T23:52:52-10:00February 21, 2021|

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