November Housing Stats Support Fourth Quarter Rally
With the distraction and uncertainty of the presidential race behind us, Oahu’s real estate market has surged with an unexpected late-year rally.
Even with the advent of a long-anticipated tick-up in mortgage interest rates, November housing stats reveal sales prices and volume up, accompanied with low days-on-the-market and scant inventory — uncharacteristic as we enter the holidays — the post-summer-selling-season boost continues to thrive.
“Throughout the year, the low mortgage interest rates and strong local economy have driven demand and sales up,” says Kalama Kim, principal broker at Coldwell Banker Pacific Properties and Honolulu Board of REALTORS® president. “Now that we are nearing the end of the year, we have seen mortgage interest rates start moving upward by more than half a percentage point. Thus far, that increase has not affected sales on the island. In fact, during this time, when the market experienced a jump in interest rates and uncertainty with the local and national elections, the stats indicate the market accepts the price for homes here on Oahu, even when they have been rising for some time.”
Kim defines current buyers on Oahu as a mix of three basic demographics: first-time homebuyers, move-up buyers, and those looking to downsize.
“Based on Coldwell Banker Pacific Properties clients this year, we continue to see first-time home buyers on Oahu as a significant percentage of the market on the West side of the island,” he says.
Despite increasingly high housing costs, Oahu buyer activity continues to show notable gains. An extraordinary 19.5% surge in the number of single-family home sales last month was again particularly impressive for this time of year. There were 294 homes that closed last month, compared to November 2015, when 246 homes sold.
Sales volume for the condo market was just as impressive, with 421 closings last month — a 17.6% increase from a year ago when 358 condos were sold.
Pending sales (sales currently in escrow) are also up significantly, which indicates the momentum will likely carry through the year. Pending sales of single-family home are up 18.2% in November, from 346 in 2015 to 409 currently. Pending condo sales are up as well — an impressive 20.2% — up from 501 at the end of November 2015, compared to 602 condos in escrow at the end of last month.
As lack of supply continues to be the chronic trigger for Oahu’s rising prices, it is noteworthy to highlight that listings are up 5.6% in the SF segment, which will help to ease the shortage some. The number of active condo listings is down 2.4% year over year.
Homeowners on Oahu likely saw an increase in their home equity in November as property values on the island saw a dramatic surge.
The annual Median Sales Price of a single-family home on Oahu exceeded $700,000 for the first time last year and has continued to climb through 2016 with the year-to-date median price at the end of November up 5% — to $735,000.
In November, the single-family MSP hit $750,000 — only slightly off June’s record high of $760,000 — a 4.8% rise from one year ago.
The median price of a condominium is also up dramatically — from $347,000 in November 2015 to $395,000 — a notable year-over-year increase of 13.7%. Condo prices have been on the rise for 9 of 11 months this year. Year-to-date, condo prices are ahead of 2015 stats by 8.1%.
Eleven consecutive months of housing price increases, fueled by positive market indicators, such as strong sales and low days on market, may motivate sellers to list their homes or condos in December, rather than wait until after the New Year. Likewise, as there is historically less competition during the holidays, rising prices and mortgage rates will likely motivate some buyers to act now, before they are priced out of the market.
Demand dominates across Oahu. This month’s hot markets are those neighborhoods where the call for housing was high enough to motivate buyers to pay 100% or more of the asking price, not only last month, but consistently throughout the year. Sellers in these neighborhoods are getting top dollar:
Single-family home hot neighborhoods:
Kapahulu – Diamond Head: 100.%
Makiki – Moiliili : 100.%
Waialae – Kahala: 100%
Kailua – Waimanalo: 100%
Moanalua – Salt Lake: 100%
Source: Honolulu Board of REALTORS®, compiled from MLS data. November 2016.