April marks another record high for Oahu single-family home prices

Despite a rise in mortgage interest rates and an uptick in new listings, the median sales price of a single-family home was up 10.9% last month, compared to April 2017.

“Mortgage interest rates started rising back in November, yet sales volume is still at the same levels they were prior to the increase in rates,” says Kalama Kim, Principal Broker at Coldwell Banker Pacific Properties. “The median sales price has been rising so we have not seen a significant effect on prices as of yet either.”

The number of new listings was up 13.2% for single-family homes and 11.3 for condos. The 506 new single-family listings last month marked a two-year high. The overall number of active condo listings, at 2045, is also a two-year high. The inventory upswing comes just in time for the high demand of the summer, which may slightly ease competition among buyers. However, months of inventory remaining hit two-year lows in December 2017 (2.3 months) for condos and January (1.9 months) for SF homes, but is still severely depleted: 2.8 months and 2.3 months, respectively for condos and SF homes.

In some markets, record high prices might motivate owners to cash out, but there is no indication that is currently the case on Oahu.

“In past cycles, we have seen rising prices motivate sellers to cash-out and list their homes,” says Kim. “In this market, we have yet to see that happen even though prices hit record highs in the last few years. The lack of inventory may be keeping owners in place because they have nowhere to move once they sell.”

For those who do want to cash out possibly at the market’s peak, Kim has this advice for buyers lucky enough to receive more than one offer on their home.

“When reviewing offers in a competitive market like the one we are in today, the three most important terms of an offer are price, cash down, and the willingness to pay over the appraisal value,” Kim says. “This allows the seller to get what the market will bear even if an appraisal report says otherwise.”

Sales of Single-Family Homes and Condos | April 2018
Source: Honolulu Board of REALTORS®, compiled from MLS data

The number of closed sales increased in both categories, as compared with April 2017. Single-family home sales volume was up 3.2%, from 280 a year ago to 289 last month. Condo sales volume spiked 12.6%, up from 486 units closed in April 2017 to 547 last month — making this the second highest in two years — the highest being in August 2017 with 575 closings.

Based on the number of signed contracts not yet closed, pending sales are on the rise and have been trending upward for several months.

“Pending sales stats are a good indicator of demand over the short-term,” says Kim.

“Thus, an increase in this number signifies healthy demand in the market.”
In April, pending condominium sales were up again, but SF homes still in escrow were down.

Median Sales Price of Single-Family Homes and Condos | April 2018
Source: Honolulu Board of REALTORS®, compiled from MLS data

In April, the median price of a single-family home hit $790,000 — a 10.9% leap from the MSP in April 2017 of $712,500. Condo prices increased slightly again in April from a year ago — from $415,500 in April 2017 to $416,000. You may remember in March, the median sales price of a condominium reached a new record high of $435,000, jumping ahead of the previous record of $430,000 set in January.

Using the year-end figures from 2017 for comparison, single-family homes appreciated at an annual rate of 2.7% last year, and condos appreciated annually by 3.8%. Year-to-date figures for 2018 average a bit higher. The MSP of a single-family home is up 4.6% since the new year. Condos are up 7.5%. With the summer still ahead, Oahu’s MSP is on track for a record year.

HOT MARKETS!

Island wide, stats show condo sellers are typically accepting offers for 99% of their original asking price, while single-family home owners are hovering at 98.8%. Hot markets are neighborhoods where buyers likely bid up prices resulting in the percentage of sales-price-to-original-price received by the seller is 100% or more. It’s worth noting there were 158 single-family homes and 122 condos in the Ewa area, which sold for 100.2% of the list price — making Ewa the hottest neighborhood on Oahu according to the current stats.

Single-family homes selling in: