Oahu’s real estate market is flirting with ending a streak of record annual home sale prices after six straight years.
Whether the string is broken will be known a month from now, but industry data show that after 11 months this year, the market is on the brink.
A report from the Honolulu Board of Realtors released Friday lists median home sale prices this year through November as
ever-so-slightly down or flat.
For single-family homes, the median price is off 0.6% for the 11-month period — $785,000 this year compared with $790,000 last year.
For condominiums the figure is $425,000 for both time frames.
Earl Lee, co-president of Berkshire Hathaway HomeServices
Hawaii Realty, has a hunch that for the whole year the market will eke out a new peak.
“If I had to guess, I’d say the median price is going to be up,” he said.
Lee said his guess is linked to low mortgage interest rates, which have come down in the second half of this year and allow buyers to spend more on a home.
“Interest rates have increased the purchasing power of buyers,” he said.
Lee added, however, that sometimes people place too much importance or focus on median prices that can be affected by the mix of homes sold.
The median price is a point at which half the homes sold for more and half for less. This measure can be influenced by the location, age, size and quality of homes sold.
“When you look at median prices, a lot of that could be reflected in a change in mix,” Lee said.
Certainly, new homes that typically cost more than older comparable homes get added to the market every year, and this tends to naturally put upward pressure on median prices. The Honolulu Board of Realtors counts sales of only previously owned homes, so new homes are included in the report when they get resold.
Oahu’s trend of median single-family home and condo prices breaking annual records stretches back to 2013.
Before that, prices fluttered for about five years in the wake of a national recession after setting a record in 2007.
Some of the pressure for prices to rise in recent years was from pent-up demand among buyers who had put off purchases during more dour economic times, as well as a relatively low inventory of homes for sale.
This year the economy has been good. But inventory has generally been higher than last year, presenting more options for buyers and more competition for sellers.
Sales volume this year has been mixed in a modest range. Through November the number of single-family home sales edged up 3% to 3,441 from 3,350 in the same period last year. But the number of condo sales slipped 5% to 4,980 from 5,239 in the same comparable period.
Last month more single-family homes and more condos were sold compared with the prior November, while median prices were down a tad.
Sales of single-family homes rose 11% to 320 in November from 288 in the same month last year, the report said.
These homes sold for a median $794,750 last month, or 0.3% less than $797,000 a year earlier.
The number of condo sales edged up 1% to 434 last month from 429 a year earlier, and the median price was off 1% to $415,000 from $420,000.
Jenny Brady, president of the trade association and an agent with Hokua Hawaii
Realty LLC, characterized
recent activity in Hawaii’s largest residential real estate market as good.
“We’ve seen growth in sales with stable prices over the last few months,” she said in the report.