Condos Gain Popularity
The median price of a single-family home on Oahu was up in May — up 3.0% from the same time last year — to $719,000.
And while island living and the limited amount of buildable land is what originally made condominiums on Oahu popular since the 1960s, rising price tags on single-family homes may be one reason some buyers today are opting instead for a more affordable condo or townhome.
“Townhomes and condos allow buyers choices to purchase at a lower price point as compared to single-family homes,” says Kalama Kim, Principal Broker at Coldwell Banker Pacific Properties.
And, he says, condos are growing in popularity for a variety of other reasons as well.
“Today’s condos appeal to a broader range of residents because of the many amenities that come along with condo living. Many condos now boast amenities like dog runs, concierge services and guest quarters for friends and family,” adds Kim. “Living on an island, condos have become more popular for residential development. The lack of space almost requires more condos to meet the growing population. Also, investors sometimes like to purchase condos, as the property is maintained for them and they can better predict their return on investment and cash flow.”
Considering a condominium necessitates a full understanding of homeowner’s association restrictions and financial obligations. “Buyers should check to see if the rules and restrictions in a townhome or condo allow for them to enjoy the property the way they want to,” says Kim. “For example, if they have two pets, they should be sure pets are permitted in the property they want to purchase.”
Contact me to learn more about what condo or townhome might fit your budget and your needs best.
The number of sales that closed in the month of May was up from a year ago. Last month, 319 single-family homes closed, a 3.2% increase over May 2015 when 309 SF homes closed.
There were 477 condos that closed in May — a 6% increase from a year ago when 450 units closed.
One of the market indicators to keep an eye on is sales volume, expressed as months of remaining inventory — or … supply and demand. Last month, 319 homes closed, and there are 454 pending sales, which are in escrow. And the total number of active listings in May was 1,212. This is how the Months of Remaining Inventory is computed. At the current rate of sales, it will take roughly 3 months for all current listings to sell at the current rate of sales.
Months of remaining inventory will be high in a weak market and low in a strong market. In the mid 1990s, for example, we saw 22 months of remaining inventory.
Today, inventory continues to be a significant factor affecting housing prices.
The median price of a single-family home on Oahu was up 3% in May, to $719,000. Condo prices were down slightly 0.5%, to $373,000.
Year-to-date figures show that for the first five months of 2016, prices have seen increases in both SF and condo segments of the market. Indeed, YTD-2016, the median sales price of a single-family home is $720,000, compared to $683,000 at this time last year — an increase of 5.4%. The YTD-2016 of a condo for the first five months of the year is $380,000, compared to $365,000 at the end of May 2015 — an increase of 4.1%.
Homes and condos are selling after near record breaking 17 days and 15 days, respectively. The fast pace of sales indicates the market is strong going into the summer selling season.
For sellers who plan to list their home, Kim has this advice: “Prepare the property so the it would appeal to the largest number of buyers.”
This month’s hot markets are those neighborhoods where demand was high enough that sellers accepted an offer and opened escrow in less than 15 days on the market.
NOTE: The median condo in Aina Haina –Kuliouou and Mililani sold in 7 days!
Single-family home hot neighborhoods:
Aina Haina – Kuliouou: 12 days
Ewa Plain: 10 days
Kailua – Waimanalo: 14 days
Mililani: 13 days
Pearl City – Aiea: 12 days
Windward Coast: 10 days
Aina Haina – Kuliouou: 7 days
Ewa Plain: 10 days
Kailua – Waimanalo: 11 days
Kaneohe: 9 days
Makakilo: 11 days
Mililani: 7 days
Moanalua – Salt Lake: 9 days
Pearl City – Aiea: 10 days
Waipahu: 8 days
Source: Honolulu Board of Realtors®, compiled from MLS data April 2016