The median single-family home resale price on Oahu hit an all-time high of $883,000 in January, besting September’s record of $880,000, according to data released Saturday by the Honolulu Board of Realtors.
It’s a 14.7% increase over January 2020’s median resale price of $770,000. The median condo resale price went up 5.4% to $452,000 from $429,000.
The median price is the point at which half of houses sold for less and half sold for more.
For months now, a lack of inventory, bidding wars and historically low mortgage rates have driven prices up, making it tough for many to find a house.
Single-family homes stayed on the market just nine days in January, tying September’s record, and condos spent 18 days on the market, which was still 45.5% fewer days than in January 2020.
To show how low the inventory is, January had 790 active listings for single-family homes, compared with 1,210 for the same month a year earlier, and there were 1,992 condo listings last month, down from 2,342 in 2020, the data showed.
The COVID-19 pandemic, with stay-at-home and work-from-home requirements, also gave many buyers reason to seek bigger, more expensive properties.
Single-family homes in the $600,000-to-$999,999 range made up 56.4% of closings in January, with most sales increases in the upper price ranges, the Board of Realtors said. Closings in the $800,000-to-$999,999 range were up 61.5% and those priced at $1 million and up shot up 64.1%.
Melissa O’Bitts, 29, said she and her husband, Mike, 32, took advantage of low interest rates and a VA loan to upgrade and get a bigger property in Ewa for themselves and their dogs.
“We weren’t the only ones who came up with the brilliant idea,” she said.
The Mililani couple shopped from October to December in the $700,000-to-$800,000 price range.
“We went to countless open houses,” O’Bitts said. “A lot of people were dumping their dumps. People were just trying to get their property sold quick. They didn’t renovate or do anything with their property.
“We put offers on four different places, got outbid almost every single time or someone came in with a cash offer. One place, we went $25,000 over the asking price and still got outbid by a cash offer,” she said. “That was happening in … Ewa, Kapolei and Mililani.”
The O’Bitts family entered four lotteries for new builds, got picked twice, but were unable to proceed because they hadn’t sold their townhouse yet. They finally got a new build in Ewa at Northpark by Gentry.
“I’m super excited,” she said. “Closing is on Tuesday and hopefully we get the keys on Friday.”
O’Bitts said their real estate agent was concerned they would be competing against out-of-state investors and mainland buyers seeking to telework from Hawaii. But for the most part they were going up against other local buyers, a fact backed up by John Jacobson, lead real estate analyst at Locations.
“The overall buyer is still the local buyer, looking at 2020 before and after COVID,” Jacobson said.
He analyzed 9,497 Oahu real estate transactions from public records and found that 90% of buyers were
local. Mainland buyers were involved in only 7% of Oahu real estate purchases in 2020, with half of those buyers from California.
Sales to Japan buyers dropped 38% and fell 64% for all other international buyers.
Myron Kiriu, owner and CEO of Better Homes and Gardens Real Estate Advantage Realty, said that in addition to low mortgage rates, which are a “big driver,” many of his clients purchasing high-end properties as second homes are from the western U.S. and Canada, “looking at Hawaii as a safe haven from COVID.”
“If you can afford to work remotely from anywhere, why not choose Hawaii?” he said.
Ira Gordon, principal broker of Aloha Homes, has been selling real estate in Hawaii for over 40 years. “It’s really a good time, and that’s why there’s a lot more activity,” he said.
“The rates make it so much more affordable; it outpaces the increases in price. If you were to wait, thinking the prices will drop, the rate going up 1% will make a big difference.”
For those who might not be able to afford conventional financing on a home, even with low mortgage rates, Gordon recommended looking at various programs for first-time buyers and finding a good Realtor who can help arrange financing.
For those without the 20% down payment, he suggested looking into VA financing, joining a credit union associated with the military, perhaps through a relative who is in the service, and FHA loans, which allow a 3% down payment for owner-occupants.
In some cases, the seller may agree to act as the lender.
“You just have to be creative,” Gordon said.
