Single-family homes mark another Oahu record as bidding wars escalate

Demand for housing in a market drained of supply remains the driving force for home sales. In March, homes sold for record prices, in record time, and in record numbers, motivating more sellers to list their homes.

The number of listings selling for more than the asking price nearly tripled during the first quarter of 2021. During the first quarter, half of all single-family homes sales closed above the asking price, compared to only 19% during the same timeframe last year. Condos that closed for more than the asking price accounted for 29% of the total condo sales, compared to 10% the previous year.

“While we are starting to see an increase in new listings, more inventory is needed to quell the upswell in demand,” says Kalama Kim, principal broker at Coldwell Banker Realty. “One of the reasons more owners aren’t selling is because they have nowhere to move to.”

Mike James, president of Coldwell Banker Realty, explains, “Even though there was an uptick in mortgage interest rates last month, it didn’t seem to affect the number of buyers still searching for homes to purchase. And most listings are still receiving multiple offers above the most recent sale in the neighborhood.”

New listings for single-family homes and condos did add much-needed inventory to Oahu’s housing supply last month. Single-family homes marked a 12.6% jump with 439 new listings as nearly all regions saw positive growth. The condo market added 715 new listings, marking a 17.2% increase in listings compared to this time last year.

But despite the new listings, demand continues to outpace our limited housing inventory, according to Shannon Heaven, president, Honolulu Board of Realtors^®. “This lack of inventory is driving a very active and competitive market for prospective homebuyers on Oahu.”

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

Condo sales volume reached two-year highs in March, with 626 closed transactions — up 52% from March 2020 volume, when 410 condos closed.

Year-to-date, first quarter sales volume data show condo closings were extraordinary — up 32.5%, from 1,105 in 2020 to 1,464 this year.

Single-family home closings were up a whopping 19.1% as well — 361 SF homes closed in March, compared to 303 closings during the same month last year. Year-to-date, single-family home sales volume jumped up 11.9% — from 815 in 2020 to 912 this year.

The single-family home market recorded an uneven shift in sales with a 36.1% drop in sales for properties sold below $800,000. In comparison, the upper price tiers of $1.5 million and above, saw a dramatic 113% increase in sales.

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

Low mortgage interest rates and a scarcity of inventory is fueling a pandemic boom. At the same time, top-dollar profits have incentivized some to sell, despite the difficulty of finding a replacement home.

For the third consecutive month, the median price for a single-family home reached a new record of $950,000 — a $140,000 increase over the MSP a year ago and a $32,500 surge even since February.

Listings are not only selling for higher prices, but are doing so in record time. Both SF and condo segments are selling at a record pace — with DOM at two year lows. The median number of days on the market for a single-family home to sell is down 40% from pre-pandemic March 2020 figures — from 15 days on the market to 9 days in March. Condo sales too, are selling in record time — down 39.1% — from 23 days on the market in March 2020 to 14 DOM last month.

NEIGHBORHOOD MARKET STANDOUTS

Sellers around the island are fielding offers for more than 100% of their asking price. Here’s where the action is. To see what’s happening in your neighborhood, ask your Coldwell Banker Realtor^®.

SOURCE: Honolulu Board of REALTORS®, compiled from MLS data. Year-To-Date, February 2021 vs. February 2020.