Oahu home prices vibrant, despite rising interest rates

In January, the median sales price of a single-family home dipped below $1 million for the first time in 17 months, landing the month at $970,000, according to the Honolulu Board of Realtors. February numbers reported the single-family MSP at $987,000. In March, the MSP surged to $1,083,750, only to drop again in April to $999,950. In May last month, the MSP bounced up again to $1,109,000.

However, looking back at the last three years — to May 2020 shortly after the pandemic started, the single-family MSP was $797,000. Last month, the MSP of a single-family home on Oahu was $1,109,000 — a whopping 39% gain from May 2020. Despite rate hikes and other negative influences, the local market has stood strong and even thrived.

For condos, the median price also gained 26% during that same three-year period — from $399,000 in May 2020 to $505,000 last month.

Sales volume is also up, compared to May 2020, when 248 single-family homes sold, with 262 closings last month.

The frenzied market pace during many of the months spanning the last three years came with bidding wars, multiple offers, some homes selling for tens of thousands of dollars more than asking, leaving some buyers bewildered as they were repeatedly out bid. But in general, the statistics support that, through it all, the local market has remained vibrant.

Of course, the increased rates presented financial challenges for some buyers financing their home yet motivated buyers are keeping demand strong.

“We are still seeing multiple offers on properties here, which has pushed prices up,” says Mike James, president of Coldwell Banker Realty, who adds that buyers have adjusted to rising interest rates, which continues to drive demand.

Indeed, 755 of single-family home sales closed at the full asking price or more a year ago, compared to 45% last month. And the same is true for condo sales. Conversely, listings for both SF homes and condos spent two times longer on the market than a year ago, at 21 and 20 days, respectively, compared to 10 days in 2022.

Single-family homes in the $700,000 to $1,299,999 range accounted for the most closed sales in May — at 67% of the total sales. The Ewa Plain recorded the largest share of sales at 25.6%.

Typically, sales and prices trend higher during the summer months — normally May through October.

Sales volume is down from a year ago in both single-family and condo segments.

Island wide, this month’s sales volume — 262 SF homes and 438 condos sold — is down from 344 SF homes closed and 688 condos closed in May 2022, representing a decline of 23.8% and 36.3%, respectively.

However, the number of sales last month was up significantly compared to May 2020 when HBR reported 248 single-family homes, and 254 condos sold. This long-term, post pandemic prospective shows stability, even when faced with unprecedented challenges.

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

Last month, the median sales price of a single-family home was $1,109,000 — down 3.9% from the May 2022 MSP of $1,153,500, a record-high monthly MSP.

Similarly, last month’s MSP of condos was $505,000 — down a modest 2.2% from the MSP of $516,500 recorded in May 2022. The record-high MSP of a condo — set two months ago in March 2023 — stands at $536,000.

NEIGHBORHOOD MARKET STANDOUTS

Despite lower sales volume, the median prices for Oahu properties hasn’t changed significantly in the past year. 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.