Higher mortgage interest rates created ripple effects across Oahu’s housing market in June as sales volume decreased, asking prices were reduced and active listings stayed on the market longer.
Median sales prices of previously owned properties, however, remained at elevated levels, according to data released Wednesday by the Honolulu Board of Realtors.
Condominiums hit a record for the second month in a row with the median price climbing to $534,000, up 16.1% from $460,000 a year ago and 3.4% above the previous record of $516,500 in May.
Single-family homes jumped 12.4% to $1.1 million from $979,000 a year earlier, but the median price was down slightly from $1,153,500 in May. The median price has now reached at least $1 million for 11 months in a row, prompting many buyers to opt for more affordable condo purchases instead. The median price is a point at which half the sales were for more and half were for less.
“The rapid rise in interest rates is causing buyers to change tack and reevaluate their budgets and what they’re looking for in a home,” Chad Takesue, president of the Honolulu Board of Realtors, said in a statement. “New listings are spending more time on the market compared to the frenzy in activity we witnessed last year.”
Mortgage rates for 30-year loans have nearly doubled from a year ago but have slipped recently, according to mortgage buyer Freddie Mac. The 30-year rate fell to 5.30% this week from 5.70% last week, but that’s still up significantly from 2.90% a year ago.
Single-family home resales in June fell 20.8% to 357 from 451 in the year-earlier period while condo sales declined 14.2% to 626 from 730 over the same time period.
Despite the decline in sales, volume is still up compared with pre-pandemic 2019 levels, with single-family home sales up slightly at 9.2% and condos ahead 32.3%.
“Sellers are also adjusting their strategies in response to market conditions,” Takesue said. “Over the past several months, we’re seeing more sellers decrease the asking price for their properties for single-family homes and condos,” Takesue said.
In June, 30% of available single-family homes had their original asking price reduced, compared with 20%, or 74 listings, in June 2021. Condos saw slightly more listings with reduced prices, with 27%, or 271 listings, having their asking price reduced, compared with 22%, or 227 listings, in the year-earlier period.
The trade association noted that price reductions may not have occurred in June, but rather the data reflects active listings that are now priced below their original list price.
The Board of Realtors said properties continue to move into escrow in under two weeks, though single-family homes spent 10 days on the market in June, compared with just eight days in 2021, and condos remained steady at 11 days on the market.
The volume of contract signings, though, continues to wane with pending sales down for three consecutive months. In June, pending sales for single-family homes declined 27.7% from the year-earlier period while pending sales for condos fell 24.8% year over year.
HOME SALES
The number of homes sold on Oahu in June with the median price and percentage change from the same month in 2021:
HOMES
SALES MEDIAN PRICE
June 2022 357 $1,100,000
June 2021 451 $979,000
Change -20.8% 12.4%
CONDOS
SALES MEDIAN PRICE
June 2022 626 $534,000
June 2021 730 $460,000
Change -14.2% 16.1%
Source: Honolulu Board of Realtors
