The current balanced market offers benefits for buyers and sellers

Third quarter 2019 closed out flush with more inventory, with sales volume at levels comparable to 2018, and prices holding steady. Oahu’s single-family housing market continues to perform strongly moving into fall, with supply and demand forces balanced.

So what part of the market cycle are we in? Is this a buyer’s market? Or a seller’s market?

“While inventory has increased over the past two years, it hasn’t gotten to the point where the buyers have all the leverage,” says Kalama Kim, principal broker at Coldwell Banker Pacific Properties. “Last month, buyers still paid 98.4% of the sellers asking price to buy a single-family home. That said, the extremely low mortgage interest rates combined with more choices of homes for sale has created a market attractive to buyers.

Kim points out, “the months of remaining inventory combines the rate of sales with available inventory, and last month, we had 3.5 MRI, which indicates a balanced market.”

A balanced market generally has something to offer to both buyers and sellers — conditions remain positive for everyone.

“Many buyers wonder if they should buy now or wait for the perfect house at the perfect price,” explains Mike James, president at Coldwell Banker Pacific Properties. “Since many factors play into the home-buying decision, buyers should have that conversation with their Realtor® and consider factors like interest rates, prices and paying rent instead of a mortgage.”

“Most sellers want to sell by a specific deadline and obtain the maximum proceeds they can yield from the sale,” adds James. “They are concerned about not leaving money on the table and minimizing the expenses of the sale.”

Indeed, when looking at pending sales, the current market is showing a surprising trend.

Pending home sales have been on the rise now for three consecutive months — in July, August and September — a welcome rebound after 18 consecutive months of declines, according to HBR statistics. In September, pending sales of single-family homes was up 6.9%, from 462 in September 2018, to 494 last month.

Other trends include homes or condos with separate living areas.

“Buyers have shown an interest in properties that have separate units on the property, which they can rent out to offset their mortgage. Some homes already have completed the ADU permitting process, which is very attractive to buyers,” says Kim. “Open, roomy layouts, upgraded kitchens and comfortable master suites on the first floor are also very attractive to today’s buyers.”

Sales of Single-Family Homes and Condos | September 2019

Source: Honolulu Board of REALTORS^®, compiled from MLS data

The number of single-family home transactions closed in September increased 12.3%, from 309 sales in September 2018 to 347 closed sales last month. Year-to-date, the number of closings were up 0.8% — with 2,774 homes closed — nearly even with September 2018 figures showing 2,753 homes closed.

The number of condo closings was down from a year ago with 466 condos closed last month, compared to 511 units closed in September 2018. Year-to-date, condo closings are also down 6.7%.

Median Sales Price of Single-Family Homes and Condos | September 2019

Source: Honolulu Board of REALTORS^®, compiled from MLS data

The median sales price of a single family home dropped 4.4%, while the MSP of a condo was up 4% in September. For the first nine months of 2019, however, year-to-date prices are holding steady with 2018 prices.

In September, the median price of a single family home was $777,000, compared to $812,500 in September 2018. However, year-to-date, the MSP was $785,000 last month, compared to $789,000 after the first nine months of 2018.

Condo prices were steady as well. Last month, the MSP for a condo on Oahu was $445,000, up 4% from last year, when the MSP was $428,000. And for year-to-date, the MSP after the third quarter 2019, was $425,000, while a year ago was $429,500 — a 1% difference.

The percent of original list price received was 98.4% for single-family home sellers, and 97.6% for condo sellers last month.

“It is very encouraging that buyers are responding to exceptionally low interest rates,” says Lawrence Yun, National Association of Realtors® chief economist.

HOT MARKETS!

In September, the number of days on the market for single-family homes was up 70.6% from last year — from 17 days in September 2018 to 29 days last month. Condo DOM was up 35%, from 20 days to 27 days.

This month’s hot markets are those neighborhoods with the fastest sales — 20 days or less.

NOTE: The Honolulu Board of Realtors reports sales statistics on the Oahu market every month, for the previous month. Data for individual neighborhoods takes more time, hence the September HBR report showing neighborhood-specific data pulls figures from June.