Prices hold steady despite declining activity and the rising cost of borrowing

In March, 58.5% of single-family home sales closed for $1 million or more, pushing the median sales price above $1 million once again to $1,083,750.

The median sale price is determined by listing all the month’s sales prices in ascending order and identifying the midpoint — where half the homes sold for more and half for less. So, when more than half the monthly sales are over $1 million, the median will also likely be in excess of $1 million. Likewise, if the number of single-family sales in that million-dollar-plus segment drops significantly as it did in January, the MSP will skew below the million-dollar mark.

Indeed, the median sale price of a condo on Oahu in March set a new record-high of $536,000 — a 0.4% gain above the previous record of $534,000, which was set in June 2022.

So, despite fewer bidding wars, an increase in the cost of borrowing, and a slowdown in sales volume, prices are holding steady, which in turn, is keeping sellers interested.

Buyers are motivated by the fact that most single-family home and condo sales are now closing for less than the original asking price. In March, approximately 35% of SF homes closed at full asking price or more, compared to 74% in March 2022. In the condo market, 41% of condos sold at the full asking price or more, compared to 65% in March 2022.

With 30-year, fixed mortgage rates holding mostly under 6% this week, the increased cost of borrowing has added to the cost of homeownership, making it difficult for some buyers to qualify altogether. Fewer buyers in the market means less competition — another motivating factor for buyers.

Inventory is also up. In the SF segment, active inventory in the $800,000 to $899,999 range reportedly tripled, with 76 listings last month, compared to 25 listings a year ago. Additionally, there were increases in inventory in the lower segments. For example, SF homes priced at $899,999 and below doubled, from 74 a year ago, to 163 active listings last month.

“As we near the summer selling season, there are definite advantages for both buyers and sellers to participate in today’s market,” says Mike James, president of Coldwell Banker Realty. “Our agents are working with both buyers and sellers who are confident to be accomplishing their real estate goals.”

Median Sales Price of Single-Family Homes and Condos | March 2023
Source: Honolulu Board of REALTORS^®, compiled from MLS data

While sales volume is down from a year ago, that may be a bright spot for buyers. In March of 2022, 321 homes sold. The total active SF inventory on Oahu was 360 single-family homes. With homes selling nearly as fast as they were being listed, the remaining inventory was somewhat scarce.

Last month however, the active inventory in the SF home segment was 541, with the number of homes that closed at 236, leaving a more healthy inventory remaining on the market.

Condo sales volume versus inventory was similar. March of 2022 reported an active inventory of 919 and sales volume of 672. Last month, the active inventory was 1,152 and sales volume was 444.

Fewer homes sold, has left more inventory and more choices for buyers. And buyers also had more time to act than a year ago. The median number of days on the market for a SF home was 36 days last month, compared to only 9 days a year ago. Condos sold in a median number of 24 days last month, compared to only 9 days in March 2022.

Median Sales Price of Single-Family Homes and Condos | March 2023
Source: Honolulu Board of REALTORS^®, compiled from MLS data

The median price of a single-family home is down 5.8%, from $1,150,000 in March 2022 to $1,083,750 last month. Third-quarter data is similar: The MSP for the first three months of 2023 is $1,025,000, compared to $1,100,000 for the first quarter of 2022.

And condos set a new MSP record of $536,000, up 4% from March 2022’s MSP of $515,500. However, first-quarter figures show condos down 2% from a year ago: The MSP for the first three months of 2023 is $500,000, compared to $510,000 for the first quarter of 2022.

NEIGHBORHOOD MARKET STANDOUTS

Under the influence of rising interest rates, island-wide sales have slowed while prices ebb and flow. But as the Honolulu Board of Realtors® reports this month, prices are holding somewhat steady, and many neighborhoods have retained million-dollar status. This month’s Market Spotlight showcases the single-family neighborhoods where the MSP is $1 million or more, and condo neighborhoods where the MSP is $500,000 or more.

To find out the MSP for your neighborhood, ask your Coldwell Banker Realtor®.
SOURCE: Honolulu Board of REALTORS®, compiled from MLS data.