Oahu Real Estate Market Update

While rising mortgage rates are slowing down Oahu home sales volume, the good news is that prices are holding. Keep in mind, as rates increase, the supply of qualified buyers decrease. It remains to be seen what long-term effects this dynamic will have on inventory, sales, and prices.

Looking back 10 years, HBR historical sales data shows the annual median sales price for a single-family home in 2011 was $575,000, when the average 30-year fixed rate mortgage interest rate was 3.95%, according to Freddie Mac. At the end of 2021, the annual MSP was $990,000 — nearly double.

In 2001 — 20 years back — the single-family MSP was $299,900 — which nearly doubled in 2011. Comparable mortgage interest rates at the end of 2001 were 7.16%. Going back another 15 years, the MSP in 1986 for a SF home was $171,200, with average rates of 9.29%.

Sales activity over those years fluctuated as market conditions varied, but appreciation on Oahu has maintained a steady slope on the plus side.

Although the Federal Reserve has raised interest rates four times this year, HBR’s annual year-to-date stats ending with the third quarter reported single-family homes’ MSP up 13.9% from 2021. Condo MSPs are up too — 9.1% from third quarter 2021.

So far, prices have been resilient, though bidding wars are not as prevalent as they have been, and fewer single-family homes and condos are closing above the asking price. In September, 36% of single-family homes sold above the original list price, compared to 64% in September 2021, and 29% of condos, compared to 40% during the same time last year.

After months of meager inventory, in September there were 629 single-family listings and 1,141 condo listings — increases of 43.9% and 10.8%, respectively. However, compared to pre-pandemic (September 2019) levels — when there were 1,548 single-family homes and 2,423 condo listings — this increase may be a step toward a more balanced market.

Active inventory rose last month across most price points. Homes in the $999,999 and below price range increased 59.2%, year-over-year, and made up a slightly larger share of inventory at 33%, compared to 30% last year.

Condos priced between $500,000 and $999,999 showed the most significant increase in active inventory, up 58.6%, followed by the $1 million to 1,999,999 range, up 50.5% from a year ago.

Sales of Single-Family Homes and Condos | September 2022
Source: Honolulu Board of REALTORS^®, compiled from MLS data

The most significant indicator the market is in transition is the drop in the number of closed sales. Year-over-year, single-family and condo sales dropped 34.4% and 19.3%, respectively. And, compared to August, single-family home sales were down 11.5%, while condo sales dipped 2.4%, in one month.

And while those seem like big drops, looking back to September 2019 — before coronavirus and the frenzied market that followed for two-plus years — this month’s sales volume figures aren’t so out-of-whack. In September 2019, the number of closed sales recorded was 347 and 466, for single-family homes and condos, respectively.

Single-family home sales volume fell last month across most price points, with the largest decline in the $600,000 to $899,999 price range, down 45.4% from last year. Sales also declined in most regions. Pearl City was the only region where sales increased slightly, with 22 sales, compared to 20 last year.

Condo sales declined in September, primarily in the $799,999 and below price range, down 23.6% from a year ago.

Median Sales Price of Single-Family Homes and Condos | September 2022
Source: Honolulu Board of REALTORS^®, compiled from MLS data

The Honolulu Board of Realtors® reports the MSP for a single-family home rose this September compared to September 2021. Condo prices were up from a year ago, as well. September also marks the 26th consecutive month of an increase in the median sales price of a single-family home, and the 14th consecutive month where the median reached $1 million or more.

Despite the market conditions that point otherwise, prices are holding.

The median sales price of a single-family home in September was $1,100,000, up 4.8% from the same month last year. The record monthly high of $1,153,500 was set in May.

Year-to-date, the SF median sales price at the end of September was $1,110,500, up 13.9% from last year, when the YTD median was $975,000.

Condominium prices were up 5.1% in September, from a year ago. Last month the MSP of a condo was $502,500, up from $478,000 in September 2021. The record monthly high of $534,000 was set in June.

NEIGHBORHOOD MARKET STANDOUTS

The pace is slowing, evident by this month’s statistics from the HBR. But there are still parts of the island where August closed sales were up. Check out this list of hot neighborhoods.

To find out the MSP for your neighborhood, ask your Coldwell Banker Realtor®.

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