Honolulu Real Estate and Community News

2 Out of Every 3 Single-Family Homes Sell for Over the Asking Price in September

Year-over-year market activity continues to mark gains, but month-to-month closed sales dip

Closed sales of single-family homes and condos in September continued to outpace sales activity from the same time last year, recording 8.4% and 34.9% increases, respectively. However, sales dropped slightly compared to August, with single-family homes down 0.2% and condos dipping 8.9%. The median price for a single-family home remained at $1,050,000, while the median condo price rose 7.4% year-over-year to $478,000.

Around 57% of single-family homes sold in September were priced at $1 million and above, and the most volume growth occurred in the $1,000,000 to $1,399,999 range, with more than double the sales as last September. Roughly two out of every three single-family homes sold last month closed above the original asking price. The practice of bidding over the asking price was most prevalent in the Ewa Plain region, representing more than 80% of the region’s third-quarter sales.

Sales of condo properties in the $700,000 and above price range more than doubled year-over-year with 129 closed sales compared to just 57 last September. Meanwhile, 39.6% of condos sold for more than the asking price in the third quarter, especially in the Central, Ewa Plain, and Makakilo regions, where this occurred in over 70% of sales.

“We’re seeing a slight decrease in total sales month-to-month as families focus on the return to the school year and prepare for the holiday season, which is typical for this time of the year,” said Shannon Heaven, president, Honolulu Board of REALTORS®. “Despite the modest dip in market activity, the majority of homebuyers continue to bid over the asking price in the hopes of securing a property to call home.”

Median Price for Single-Family Homes on O‘ahu Tops $1 Million

Sustained demand for housing and significant sales volume at higher price points drive record-high median prices for single-family homes and condominiums in August

Last month, single-family homes and condos reached new record-high median prices for the second consecutive month at $1,050,000 and $500,000, respectively. The persistent competition in affordable price ranges and more closed sales at higher price points in both single-family home and condo markets are putting upwards pressure on median home prices.
 
The $1,050,000 single-family median sales price is 25.1% higher than a year ago and up 5.8% above last month’s record. This is the fourth consecutive month single-family homes have set a record median, and except for April, a new record has been set each month this year. Sales jumped 14.9% compared to last August.
 
The condo market attracted buyers at all price points, with year-over-year condo sales rising 65% last month. The $500,000 condo median sales price is up 16.3% over last August.
 
The statistics in both single-family and condo markets followed similar trends with more new listings, low median days on market and increased offers over asking.

Single-Family Homes, Condos Hit New Record-High Median Sales Prices in July

Dwindling inventory, low mortgage rates push the median price of a single-family home to $992,500

O'ahu single-family homes and condos set new record-high median prices in July at $992,500 and $475,000, respectively. Summer sales continue at the rapid pace the market has been experiencing the past few months, with single-family homes recording 404 total sales or an 11.9% increase in July. Condo sales continue to rise significantly year-over-year, outpacing single-family home properties with 671 total condo sales resulting in a 57.5% increase.

The new single-family home median sales price jumped up 21.8% compared to one year ago, while the condo median sales price rose 8.0% above last July’s median price. The new single-family home record ticked up slightly – 1.4% – above the previous record set just last month, while the new record price for condos was 2.9% higher than the previous record of $461,500 set in July 2019.
 
“We’re seeing these record-high median sales prices because inventory in the affordable and mid-range price brackets are dwindling,” said Shannon Heaven, president, Honolulu Board of REALTORS^®. “Mortgage rates also continue to hover near record lows, enabling buyers to secure cheaper financing that, in turn, helps them to close on properties at higher price points.”

Steep Competition, High Demand Drives Record-Setting Month for O‘ahu Real Estate

Median sales price for a single-family home reaches $978,000 in May 

Closed sales of single-family homes climbed 63.3% and more than doubled for condos with 135.4% more sales compared to this time last year on O‘ahu. In stark contrast to the low activity of May 2020 amid pandemic uncertainties, May 2021 set new records with the median sales price of a single-family home rising to $978,000 – breaking the previous record of $950,000 set in March 2021 – and properties flying off the market at an unprecedented pace.

The median days on the market for single-family homes and condos hit new record lows of 8 and 12 days, respectively. In May, sellers added 430 new listings for single-family homes and 683 new condo listings to the market, representing 24.6% and 34.2% increases over last year. However, by the end of May, 61% of those new single-family home listings and 51% of new condo listings were already sold or in escrow.

“The market’s rapid pace is showing no signs of slowing, and buyers entering the market continue to face stiff competition, especially for homes under $800,000,” said Shannon Heaven, president, Honolulu Board of REALTORS®. “Every day REALTORS® are working with buyers to submit their strongest offer and with sellers to secure the best price for their home. As we mark Homeownership Month in June, we encourage anyone thinking about buying a home to work with a REALTOR®. No one knows the market better and is uniquely qualified to help clients work towards their homeownership goal.”

O'ahu home sales continued at a quick pace with strong sales volume in April

Real estate activity spikes a year after the first stay-at-home order

Closed sales of single-family homes and condos rose 51.2% and 88.0%, respectively. The wide year-over-year variance is due to 2020’s downturn in real estate activity spurred by the initial shocks of the pandemic and the first stay-at-home order.

More than half of single-family homes – 58.9% to be exact – sold above the asking price last month. Meanwhile, high demand for single-family homes continues to keep the median days on market at a low of just nine days.

In April, 30.9% of condos sold above the asking price and condo properties spent a median of 13 days on the market, which tied the record low set in June 2017.

While new listings for single-family homes are up 58.3% compared to April 2020, active listings remain down 35.3% year-over-year. The condo market tells a similar story with a 60.5% increase in new listings last month, but active listings are still down 17.6%.

“A year ago, O‘ahu’s real estate market saw a steep decline in sales and listings as we were confronted with uncertainty about the pandemic’s impact on our community and economy,” said Shannon Heaven, president, Honolulu Board of REALTORS®. “Sustained demand and low inventory levels remain constants in our real estate market and when paired with historically low interest rates, it creates the fast-paced, competitive environment we see in today’s market.”

O‘ahu’s Housing Market Sales, Prices Continue to Climb to New Heights in March

Market for single-family homes shatters records with a new median sales price of $950,000

Closed sales of single-family homes and condos saw significant double-digit growth of 19.1% and 52.7%, respectively, compared to pre-pandemic activity last March. For the third consecutive month, the median price for a single-family home set a new record of $950,000, representing a 17.3% year-over-year increase and a 3.5% increase over February’s record of $917,500.

With sustained limited supply and high demand, the number of single-family homes and condos sold over the asking price nearly tripled compared to March 2020. During the first quarter of 2021, single-family homes sold over asking price made up 50% of the sales compared to just 19% in quarter one last year, while condos sold above the list price accounted for 29% of the sales compared to 10% in the previous year’s first quarter.

“Despite new listings, demand continues to outpace our limited housing inventory,” said Shannon Heaven, president, Honolulu Board of REALTORS®. “This lack of inventory is driving a very active and competitive market for prospective home buyers on O‘ahu.”

New listings for single-family homes and condos added much-needed inventory to O‘ahu’s housing supply. Single-family homes marked a 12.6% jump with 439 new listings as nearly all regions saw positive growth. The condo market added 715 new listings, marking a 17.2% increase in listings compared to this time last year.

Thanks for Mark Fleming, Chief Economist, First American Title Corporation, for sharing below.

House Prices Are Hot, But Is Housing Overvalued?

Punxsutawney Phil may have signaled six more weeks of winter, but in housing, it looks like spring (home buying) has already arrived. Typically, the housing market winds down a bit in the winter, but America’s housing market is booming, even in the colder months. The First American Data & Analytics nominal house price index indicates unadjusted home prices nationwide increased by 12.4 percent in December compared with one year ago and are nearly 21 percent above the housing boom peak in 2006. While nominal prices have risen, house-buying power has grown even faster, increasing 21 percent year over year due to historically low rates and still rising incomes for those employed. Even though purchasing power is outpacing price appreciation, the rapid rise in house prices does prompt fears of a repeat of the 2008 crisis, even among some in the housing industry. But last time was different.

“Nationally, house-buying power continues to exceed the median sale price and that implies housing is not overvalued today. Even locally, this time is different.”

The housing market today is not the same as the housing market during the bubble years. Most importantly, today’s housing market is not overvalued. Considering only the nominal level of house prices is not sufficient to determine whether the market is overvalued or not. Lower mortgage interest rates and rising incomes correspond with higher house prices as home buyers can afford to borrow and buy more. If housing is appropriately valued, house-buying power should equal or outpace the median sale price of a home. Looking back at the bubble years, house prices exceeded house-buying power in 2006 nationally, but today house-buying power is nearly twice as high as the median sale price nationally. Of course, real estate is local and not all markets are created equal.

Most Top Markets Are Undervalued…With a Few Exceptions

Of the top 50 markets tracked, only three markets, all located in California, were overvalued, meaning the median existing-home sale price exceeded house-buying power, in December. The market with the highest overvaluation was Los Angeles, where the median consumer house-buying power in December was just over $590,000, significantly below the median sale price of a home at approximately $729,000. San Francisco and San Jose were also overvalued, although to a lesser extent. However, all three overvalued markets are still significantly less overvalued than during the national housing boom peak in March 2006. Los Angeles, for example, was overvalued by approximately $286,000 in 2006, more than twice what it is today.

The remaining 47 markets are actually undervalued, many significantly so. In fact, in December 2020, the average percentage difference between house-buying power and the median sale price of an existing home in these 47 markets was nearly 59 percent. In 2006, only 34 markets were considered undervalued, and the average percentage difference between house-buying power and the median sale price of an existing home was 39 percent. Even locally, this time it’s different.

Where Does the Housing Market Go From Here?

The First American Data & Analytics preliminary nominal house price index anticipates continued strengthening of house price appreciation through February. As the housing market heads into the spring home buying season, the ongoing supply and demand imbalance all but assures more house price growth. During the housing bubble, rapid house price appreciation was not entirely supported by economic fundamentals, but in today’s housing market, nominal house price appreciation has been driven by a historic shortage of supply relative to demand and rate-driven surge in house-buying power. Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.