Oahu single-family homes hit record median sales price of $917,500

Even as we mark one year since the island’s first coronavirus cases, the residential housing market continues its unabated rally. Spurred by the island’s sparse inventory and historic low mortgage interest rates, competition between buyers has intensified, as February sales sold for more than the asking price in 48.5% of single-family home sales, and 29.1% of condo sales. (See the list of neighborhoods below where sellers received more than 100% of their asking price.)

“Demand for limited inventory and increased purchasing power through low-interest rates has placed sustained upward pressure on prices,” says Shannon Heaven, president, Honolulu Board of Realtors^®. “While the record-setting median price and pace are good news for sellers, it creates a challenging environment for buyers who are up against the tough competition.”

While mortgage interest rates have inched up in recent weeks, there is no indication the rising rates are affecting the demand for housing yet, according to Kalama Kim, principal broker at Coldwell Banker Realty.

“Any increase in mortgage interest rates greatly affects a borrowers monthly cost and their purchasing power,” Kim adds. At some point, if interest rates jump dramatically, some homebuyers may be priced out of the market. In an environment where rates are moving up or down, buyers should keep in close contact with their loan officer to recalculate pre-qualification limits, potential monthly mortgage payment, and loan-lock opportunities.”

Pending sales rose dramatically for both single-family (up 32.6%) and condo (up 46%) segments. New listings declined in February — single-family down 19.3%, and condos down 2.5%, suggesting the competition among buyers will likely remain the market’s driving force.

“It is a competitive market but it’s not impossible,” says Heaven, who strongly encourages how it’s more important than ever to work closely with a real estate professional.

Sales of Single-Family Homes and Condos | February 2021
Source: Honolulu Board of REALTORS^®, compiled from MLS data

Sales volume was up in February from this time last year.

Single-family home sales increased 5.3% — from 247 in February 2020 to 260 last month.

Condo sales increased by a whopping 41.1% — from 316 to 446 during the same period.

Pending sales —transactions remaining in escrow at the close of the month — is a forward-looking indicator that suggests trends in sales momentum. Single-family pending sales are up 32.6% from February 2020 — from 402 homes in escrow at the end of February 2020 to 533 homes yet to close last month. while condo sales in escrow are up 46% — from 520 a year ago to 759 last month.

As the single-family home median sales price nears $1 million, the allure of condo ownership may be rising among home buyers priced out of the single-family market.

Median Sales Price of Single-Family Homes and Condos | February 2021
Source: Honolulu Board of REALTORS^®, compiled from MLS data

Rising more than $100,000 since February 2020, the median sales price for a single-family home broke the $900,000 mark for the first time to $917,500 — up 19.9% from $765,000 a year ago.

The median price of a condo on Oahu also increased 6.4%, from $430,000 a year ago to $457,500 last month.

NEIGHBORHOOD MARKET STANDOUTS

Sellers around the island are fielding offers for more than 100% of their asking price. Here’s where the action is. To see what’s happening in your neighborhood, ask your Coldwell Banker Realtor^®.

SOURCE: Honolulu Board of REALTORS®, compiled from MLS data.