Oahu’s housing market took a breather from shattering price records in September, though the median price for single-family homes stayed a tad over $1 million for two months in a row.
A Honolulu Board of Realtors report released Wednesday showed single-family homes sold for a median $1,050,000 in September, which was up 19% from $880,000 a year earlier and unchanged from August when the $1 million mark was first topped on the island.
August represented a fourth straight month — and the seventh time in eight months this year — where a price record was set in what has been a boiling hot year for Oahu home prices.
Local economists and real estate agents point mainly to high demand and low supply driving the median price up 20% over the first nine months of this year to $975,000 from $811,000 in the same period last year.
Inventory of single-family homes available at the end of September fell 17% to 437 properties from 529 a year earlier. This decline occurred despite more homes being put on the market last month, because the number of sales in September grew.
Some demand is pent-up from last year when coronavirus restrictions inhibited sales, and from households with new work-from-home needs.
Such demand, also driven by low interest rates, has created fierce competition among buyers willing to pay more than listing prices in many cases.
The trade association representing Oahu real estate agents said that roughly two out of every three single-family homes were sold last month for more than a seller’s original asking price.
“We’re still in a seller’s market,” Shannon Heaven, the board’s president and an agent with Property Profiles, said in a video prepared by the association. “I think the majority of (buyers) know and understand that this is their one shot at that property, and they’re going to put their best foot forward.”
A few months ago, local economist Paul Brewbaker said he did not regard the 20% gain in median single-family home prices as being a bubble detached from economic fundamentals. Now, he said he is less sure, though the lack of a similar surge for condominium prices is part of his view that a bubble has not formed in Oahu’s housing market.
“It’s not a bubble if only half the market is participating,” he said in an email. “If both single-family and condo prices are punching out and turning into an appreciation momentum story at, say, 20% annualized appreciation rates, steadily for the next year or few, that definitely would be bubblicious.”
The median sale price for condos on Oahu rose 7% to $478,000 in September from $445,000 in the same month last year.
A record was set in August at $500,000. For the first nine months of this year, the condo median sale price is up 9% at $467,500 from $430,000 in the same period last year.
The median price is a point at which half the sales were for more and half were for less.
Local real estate brokerage firm Locations said in a report earlier this week that it expects to see competitive market conditions and rising prices continuing into 2022 along with perhaps some moderation from extremely aggressive conditions that have defined the past year.
“Several market indicators are now aligning with typical seasonal trends, which could be a harbinger of a stable and steady market,” John Connelley, the firm’s principal broker, said in the report.
A sales pace that appears to be following seasonal trends is one such indicator. An uptick in mortgage interest rates, which recently topped 3% for the first time in three months, also could help moderate the market.
The number of single-family home sales rose 8% to 424 in September from 391 a year earlier. This was the smallest year-over-year increase this year since a 5% gain in February, and followed gains of around 50% or 60% in April, May and June.
Condo sale volume has been stronger this year, but followed a similar pattern that weakened last month. There were 615 condo sales in September, up 35% from 456 a year earlier. This gain was the smallest since a 3% rise in January and followed year-over-year gains that peaked in May and June at about 135%.
The board’s report counts sales of only previously owned homes, and typically reflect contracts between buyers and sellers signed one to three months earlier.
HOME SALES
The number of homes sold on Oahu in September with the median price and percentage change from the same month last year.
HOMES
SALES MEDIAN PRICE
September 2021 424 $1,050,000
September 2020 391 $880,00
Change 8.4% 19.3%
CONDOS
SALES MEDIAN PRICE
September 2021 615 $478,000
September 2020 456 $445,000
Change 34.9% 7.4%
Source: Honolulu Board of Realtors
