The Inertia of the Scorching Hot Summer Season Continues
Momentum gained from quick sales during the summer months continue to steamroll into October with no sign of falling off any time soon, evident in the Honolulu Board of Realtors recently released monthly statistics.
“Despite heading into what traditionally is a slower time for sales, demand for single-family homes was robust,” says Kalama Kim, principal broker at Coldwell Banker Pacific Properties and 2016 HBR president. “This could be an indication that buyers are trying to find a home to purchase before mortgage interest rates rise.”
With fourth-quarter interest rates remaining at bargain-basement levels, and inventory sparse, the seemingly insatiable demand for and condos has, once again, pushed prices even higher.
“There is some buyer uncertainty on when mortgage interest rates will rise, causing buyers to be aggressive with their offers so they can purchase a property before that happens,” says Kim. “The demand caused by low mortgage interest rates has been a huge factor for years now.”
October single-family home sales volume closed up 7% from 313 sales closed in October 2015 to 335 last month. Year-to-date sales figures outpaced last year’s volume by 5% — from 2,912 in the first 10 months of 2015, compared to 3,058 this year.
While condo sales volume was down 5.7% in October compared to 2015, the number of condos sold year-to-date is up 7.4% from last year’s figures — 4,246 in 2015 to 4,561 thus far this year.
“Condos did not do quite as well as far as the number of sales is concerned, but the seven-percent spike in median price also is an indication that demand for the units that are available was strong,” says Kim. “We are encouraged that there was a sharp rise in new condo listings in October, as more inventory is still needed to satisfy the demand for housing.”
Pending sales are solid as well, indicating the afterglow of the summer sales rally will likely continue into next month.
The median sales price of a single-family home on Oahu has now climbed steadily higher for 10 consecutive months. October MSP for a single-family home reached $742,000 — up 3.1% from October 2015, when the MSP was $720,000.
Year-to-date, the MSP stats are even more impressive. Single-family home sales prices have gained 4.9% for the year to $733,000 compared to the $699,000 MSP annual figure for 2015 — which puts the annual MSP for 2016 into record-breaking territory for the fifth consecutive year. Such long-term consistent upward movement in the median prices is attributed to low interest rates combined with the island’s chronic low inventory.
Likewise, the median sales price of a condo on Oahu jumped 7% in October — from $370,000 during this period last year, to $396,000 last month. Year-to-date condo prices are at $388,000 — a noteworthy 7.8% increase from 2015 stats. The condo segment of the market has also seen an annual increase in MSP each year since 2011, and this year is in record-breaking territory again.
Condo prices have risen in 8 out of 10 months in 2016.
“Realtors continually provide updates on the market — homes and condos — to their clients, allowing clients to have pertinent information so they can make the right decisions for themselves,” Kim adds.
Demand continues across Oahu. This month’s hot markets are those neighborhoods where demand was high enough to motivate buyers to pay 100% or more of their original asking price. Sellers in these neighborhoods are getting more than asking price:
Single-family home hot neighborhoods:
Ewa Plain: 100.9%
Kalihi- Palama: 100.3%
Pearl City-Aiea: 101.4%
Ala Moana-Kakaako: 101.8%
Ewa Plain: 100.3%
Kailua – Waimanalo: 100%
Windward Coast: 102.3%
Source: Honolulu Board of REALTORS®, compiled from MLS data. September 2016