Home prices keep heading up on Oahu.
Heading into the summer months, demand continues to outpace supply in Oahu’s housing market, according to statistics recently released by the Honolulu Board of REALTORS®.
Low inventory continues to push prices upwards. In March, the median price of a single-family home climbed to $700,000, up 6.5% from the same month last year. Condominium prices jumped 8.6% from last March to $380,000.
Oahu’s low inventory versus high demand market persists.
“The same high level of demand that we have seen over the past few years has continued,” says Kalama Kim, REALTOR® and Principal Broker at Coldwell Banker Pacific Properties. “While the inventory of homes for sale has crept up, it still has not been sufficient enough to slow the increase in prices.”
For sellers, high prices offer motivation to sell, especially with low inventory, which means less competition. But according to Kim, because there is such little inventory, it also discourages sellers who need to buy a suitable replacement property.
While location, location, location has long been the benchmark for a property’s desirability, there is now more than the attractive ocean/beach front or Diamond Head view in play — commute time has now become an important factor in many buyers’ home selection criteria.
“Traffic is more and more becoming a concern for buyers as they see travel times increase,” says Kim.
The number of homes that closed in March was down negligibly, 0.8% from a year ago — from 246 in March 2014 to 244 last month. Condo sales volume is up 4.1% from 387 units sold a year ago to 403 last month.
With a limited supply of single-family homes for sale and with prices on the rise, homebuyers may be looking to condos as a more affordable option, which in turn has driven the median condo prices upward as well.
Months of Remaining Inventory (MRI) combines supply and demand into a single statistic – how long active listings will last at the current rate of sales. The MRI for single-family homes is 2.7 months – meaning that with the current number of listings at the current rate of sales, inventory would sell out completely in 2.7 months. The MRI for condominiums is 3.4 months. These are extremely low levels.
The Median price spike in the single-family home segment to $700,000 is only the third time ever that prices hit the $700,000s – the first was in June 2014, and the second this past November.
The year-to-date figures show the Median Sales Price at $676,000, 3.2% higher than it was after the first quarter of 2014. It is also interesting to note that the annual Median Sales Price for 2014 was $675,000, a 3.8% increase over 2013, which was $650,000.
Condo prices too are on the rise. The Median Sales Price of a condo in March was $380,000, an 8.6% increase over prices a year ago, and the second highest on record — the highest being $381,500 in January. The number of days on the market is a median of 21 days for both single-family and condos, suggesting listings are getting snapped up pretty quickly once listed. And pending sales — homes in escrow that haven’t closed yet — are also up, in both categories, from a year ago.
The hottest price category in the single-family home market is $650,000 to $800,000 — nearly 21% of the homes sold were in this price range.
This month’s hottest markets include neighborhoods where sellers received 100% (or more) of their original asking price.
Hot Single-Family Home Neighborhoods:
Aina-Haina – Kuliouou: 102.5%
Downtown – Nuuanu: 109.4%
Kailua – Waimanalo*: 100.5%
Kalihi – Palama: 101%
Makaha – Nanakuli: 100%
Makiki – Moiliili: 100%
Hot Condo Neighborhoods:
Ewa Plain: 103.8
Kailua – Waimanalo*: 105.1%
*Neighborhood where single-family homes and condos sellers are both typically getting 100% or more than their asking price