Normally, as the summer selling frenzy has calmed and we approach Thanksgiving, inventory goes up some, and sales slow. Closed sales ebb and flow with the market — peaking in the summer months when school’s out and then slowing in the fall and into the winter months when people are distracted by the holidays. So, in some respects, October’s market slowdown is not surprising.

But since 2020, COVID sent our normal market patterns topsy-turvy, and for nine consecutive months single-family home sales volume on Oahu has been dropping, year-over-year. Even while prices remained stable through the summer, the sales volume figures have declined into double-digit negative territory since May, when the number of closings dropped 15.1%. As the summer progressed, and mortgage interest rates inched higher and higher, sales activity figures dropped. June posted a 20.8% drop, July volume sunk 22.8%, August sales were down 26.1%, September’s sales fell by 34.4%, and, according to the Honolulu Board of Realtors® most recent stats, October volume was down a staggering 41.7%.

On the other hand, since COVID hit in 2020, the median sale price of a single-family home has shot to record highs. The annual MSP for a single-family home in 2019 was $789,000. In 2020, the MSP was $830,000— up 5%. And in 2021, MSP was up a staggering 19.3% to $990,000. And, despite it all, year-to-date stats show the annual MSP in 2022 will likely break the $1 million mark. Condos likewise, have appreciated. Since 2019’s annual MSP of $425,000 bumped to $435,000 in 2020, and then to $475,000 in 2021. It seems 2022’s year-end median may reach $500,000.

Despite the ups and downs, Oahu real estate continues to appreciate.

Properties closed in October were on the market for a median of 19 days, up roughly eight or nine days, year-over-year. The practice of bidding over the asking price is shifting downward in both markets. For single-family homes, sales in October were split, with 50% of home sellers receiving their full asking price or more, while the other 50% closing below the original ask price. Even though in October 2021, 75% of SF homes sold at full asking or more, the current conditions remain favorable for Oahu sellers. Similarly, the condo market also showed 48% of sales closing at full asking or more, compared to 59% last year.

 Where does this all go from here? The uncertainty is not unlike the recent midterm election results: It’s anyone’s guess. But as the market shifts, the key to success remains finding a great real estate professional and following their advice.

 “For sellers, remember that we are in a market where buyers have choices and will always pick the best value for the money,” says Mike James, president of Coldwell Banker Realty. “So, price your home with the goal in mind that the quicker it sells, that’s money saved.

 “Buyers will find, compared to a year ago, that there are more opportunities in today’s market,” James adds. “It is true that interest rates are higher than last year, but if you can still afford to buy, it is still a great investment to own rather than rent. If you consider the tax write off, compared to renting, it makes sense to buy. Although you may pay a higher interest rate now, you can always refinance later when rates come down.”

 

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

Buyer activity continues to slow. Closed sales dropped 41.7% for single-family homes, and condos fell 28.8% in October, year-over-year. For single family homes, the number of sales in October 2021 was 381, and last month plunged to 222. Condo sales were 611 a year ago, and last month fell steeply to 435.

Single-family homes between $800,000 to $999,999, made up the largest portion of sales, accounting for 31.5%, though the total sales in that range decreased by 42.6% compared to October 2021. Higher-priced properties at $2 million and above also reported a sharp 63.3% tumble in sales. The Diamond Head and Ewa Plain regions experienced the most significant reduction in sales volume, falling 62% and 53%, respectively.

Pending sales for single-family and condo markets declined in October, with contract signings down 50.5% and 45.7% respectively.

 

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

The Honolulu Board of Realtors® reports the median sales price for both single-family homes and condos were up in October, compared with October 2021.

The MSP of a single-family home was up 5% from October 2021 — from $1 million to $1,050,000 — and marked the 15th consecutive month where the median was at $1 million or more. The record monthly high of $1,153,500 was set in May.

The condo MSP was up 4%, year-over-year, from $500,000 in October 2021, to $520,000 last month. The record monthly high of $534,000 was set in June.

 

NEIGHBORHOOD MARKET STANDOUTS

The median sale price has risen quickly in the last eight years. Below is a comparison of market property values (MSP) for several neighborhoods from September 2014, 2017, 2019, and 2022.

Single Family Sept. 2022 Sept. 2019 Sept. 2017 Sept. 2014
Ewa Plain $870,000 $680,000 $660,000 $597,500
Kapahulu-Diamond Head $1,220,000 $900,000 $1,180,000 $915,000
Mililani $1,110,000 $775,000 $760,000 $710,000
Pearl City-Aiea $1,012,500 $833,500 $805,000 $645,000
Waialae-Kahala $2,425,000 $1,670,000 $1,605,000 $1,700,000
Waipahu $879,500 $673,750 $625,000 $593,000

 

Condos Sept. 2022 Sept. 2019 Sept. 2017 Sept. 2014
Downtown-Nuuanu $470,000 $550,000 $570,000 $435,000
Hawaii Kai $745,000 $724,000 $639,500 $588,000
Kailua-Waimanalo $757,000 $542,000 $805,000 $502,000
Makakilo $528,000 $402,750 $360,000 $283,000
Waikiki $437,000 $399,000 $400,000 $320,000

 

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

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