A drop in new listings for September along with a five-percent decrease in days on the market before a seller opens escrow have compounded the short supply of inventory on Oahu. The results, of course, are predictable: Prices continue to rise.
“Buyer demand, paired with minimal inventory for sale, continues to drive the market forward,” says Kalama Kim, principal broker at Coldwell Banker Pacific Properties. “Current demand has been fueled by employment statistics, consumer confidence and low mortgage interest rates. A new factor, which has now come into play, is a change in underwriting. Lenders have reported that recent changes to their guidelines have made it a bit easier for buyers to get a loan.”
Prices are on the rise, but not too fast — at a healthy rate. Year-to-date figures from the Honolulu Board of Realtors indicate that single-family home prices are 3.4% ahead of 2016 data at the end of 10 months. The median price of a condominium compiled for the first 10 months of 2017 is up 5.4% as well, compared to this time last year. These are not boom-level indicators, but reflect modest, sustainable increases, based upon solid economic rationales.
As expected, summer sales were up. Single-family home figures were up 13.7% from a year ago — with 374 sales last month, compared with 329 in September 2016. Pending SF sales, transactions in escrow but not yet closed, are also way up — a 22.9% increase — from 481 in September 2016 to 591 last month.
Condominium sales increased overall 2.7% — from 512 closed transactions in September 2016 to 526 last month. Pending condo sales are substantially up — from 696 a year ago, to 777 last month — an increase of 11.6%.
The median sales price for condominiums increased 10.9% in September, to $425,000, tying the all-time high record set in July 2017. Despite record-high sales prices twice in a single year, condos and townhomes remain a popular alternative, as evidenced by the increase in pending sales. Median Days on Market dropped to 19 days.
The single-family home median sales price was up 1.3% from September 2016 to $760,000 last month with Days on Market down 12.5% from the same period last year. Sales opened escrow after an average of 14 days after being listed last month.
“The buyer pool continues to be strong,” says Kim. “There is no specific indicator to tell us when that will change. Buyers and sellers should be in communication with their Realtor to keep a pulse on the market to see if there are any sudden changes.”
For buyers, it is important to stay realistic. Lending guidelines have eased up, but a buyer still needs to have an established income to support the monthly mortgage payments. Most homeowners, don’t achieve their dream home as their first purchase — they work up to it.
“Buyers should work with their Realtor and loan officer to ensure they are comfortable with the monthly payment and the amount of home they can purchase for that amount,” Kim points out. “Sometimes, buyers may not get their dream home right away, and need to decide whether they should pare down to something more within their price range or continue renting.”
Homes are selling quickly, often in bidding wars, and this month’s hottest markets are those neighborhoods where the percentage of sales price to original price received by the seller is consistently 100% or more, according to the latest year-to-date stats.
“For sellers, during a hot market, they should take advantage of the leverage the current market offers and hire a Realtor to ensure they don’t leave any money on the table,” adds Kim.
Single-family homes selling in:
Ewa Plain: 100%
Kailua –Waimanalo: 100.1%
Kalihi – Palama: 105.1% (Hot!)
Windward Coast: 100.7%
Condo neighborhood where sellers received 100% or more of their asking price:
Hawaii Kai: 100%
Kailua – Waimanalo: 100%
Kalihi – Palama: 101%
Kaneohe: 101.3% (Hot!)
Pearl City – Aiea: 100%
Source: Honolulu Board of REALTORS®, compiled from MLS data. September 2017