Rates to stabilize, prices show promise for buyer and sellers

Last week, Freddie Mac released the Primary Mortgage Market Survey showing the 30-year fixed-rate mortgage at 6.43 percent, along with a glimmer of optimism.

“The 30-year fixed-rate mortgage increased modestly for the second straight week, but with the rate of inflation decelerating, (mortgage interest) rates should gently decline over the course of 2023,” said Sam Khater, Freddie Mac’s chief economist. “Incoming data suggest the housing market has stabilized from a sales and house-price perspective. The prospect of lower mortgage rates for the remainder of the year should be welcome news to borrowers who are looking to purchase a home.”

This month’s HBR stats indicate the MSP of a single-family home in April dropped moderately, from $1,105,000 in April 2022 to just shy of $1 million, at $999,995 last month. Likewise, the MSP of a condo on Oahu was down from $510,000 in April 2022 to $500,000 last month.

Single-family home sales in the $800,000 to $999,999 bracket continued to see the highest sales volume, accounting for nearly one-third of April sales. Conversely, SF home sales of $2 million and up plummeted 63% from last year, putting significant downward pressure on overall MSP data.

“There are some signs that are encouraging in these latest stats from HBR,” says Mike James, president of Coldwell Banker Realty. “Despite fewer sales last month, properties that sold in April spent less time on the market than a month ago. And, approximately 41% of single-family home sellers still received full asking price or more.”

New listing volume is down from a year ago — from 424 new single-family listings in April 2022 to 292 last month, creating more demand, and perhaps keeping prices stable. Condo new listing volume is down as well, from 722 new listings in April 2022 to 532 new listings last month.

Yet total active inventory levels have grown from a year ago. Among the single-family regions that have reported a boost in activity are the Ewa Plain and Leeward region, up 65.5% and 85.7%, respectively, year-over-year. The Hawaii Kai and Ewa Plain condo markets also reported rising inventory last month of more than 50%.

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

Sales volume is down significantly from the fast and furious buying frenzy that characterized the market a year ago.

Island wide, this month’s sales volume — 208 SF homes and 420 condos sold — is down from 365 SF homes closed and 672 condos closed in April 2022, however, is only slightly off the pace from February 2022, when 241 SF homes and 486 condos closed.

Some neighborhoods, however, reported more homes closed recently than a year ago. Three neighborhoods successfully bucked the trend. Year over year, Makiki-Moiliili reported 17% more single-family home sales in March, than in March 2022; and in Hawaii Kai and Kalihi-Palama, condo sales were up 26% and 42%, respectively.

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

The overall Median Sales Price of a single-family home in April was $999,995, down from $1,105,000 in April 2022. The condo segment median is also down slightly, from $510,000 a year ago, to $500,000 last month.

Below is a comparison of sales volume by price range for April 2023 versus April 2022. Since the median price on Oahu is the middle price if all sales were listed by price from the lowest to the highest, it is easy to see that a significant drop in the high end of the market, would adversely affect the overall MSP. However, as the chart shows, under $1 million, the number of 2023 sales is not dramatically different from 2022, in fact volume is higher this year in two of the three lowest ranges.

While we tend to zero in on overall MSP as the test determining whether the market is prospering, stable, or declining, it is important to understand how the figure is derived.

NEIGHBORHOOD MARKET STANDOUTS

Under the downward pressure of rising interest rates, island-wide sales have slowed. But as the Honolulu Board of Realtors® reports this month, prices have held somewhat steady, and many neighborhoods have retained their 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.