Oahu’s housing market sails into uncharted waters

Oahu’s housing market sails into uncharted waters. According to resales figures by the Honolulu Board of Realtors®, the median sales price for single-family homes and condos rose slightly to $809,000 and $450,000, respectively. Closed sales for single-family homes and condos dropped more than 20%, and new listings decreased by 42%, compared to this time last year. The full impact of the virus, job losses, and drop in consumer confidence will be seen in the May figures. One factor to keep in mind is that this is a pandemic and not an economic crisis like what we experienced in 2007-2009 so the effect on home price may not be as significant compared to what we saw a decade ago.

“We still haven’t seen the full effect of COVID-19 on the real estate market in Hawaii,” says Kalama Kim, principal broker at Coldwell Banker Pacific Properties. “May closings will portray a more accurate picture of what happened during the months of March and April, because transactions take 30 to 60 days to close and be recorded.”

The bulk of sales activity for single-family homes occurred in mid-range price points — between $500,000 to $999,999, however even in this market segment, closed sales were down 28%.

At the end of April and into May, the City and County of Honolulu lifted some restrictions on real estate operations, allowing for limited in-person showings. Property showings must be by appointment only, buyers must be pre-qualified, and no more than three individuals (including the agent) are allowed at one appointment. HBR still recommends all open houses be conducted virtually.

There continues to be a slowdown in the number of new listings coming onto the market due to stay-at-home orders that went into effect on March 23.

New single-family home and condo listings in the $1 million-and-up range saw the largest declines at 51.4% and 58.1%, respectively, when compared to this time last year.

“Eighty-eight percent of the offers accepted by seller’s during the month of April were under $1 million,” adds Kim. “This may be due to first-time homebuyers and those in temporary housing driving demand, while the higher-priced segment of the market are taking a wait-and-see approach.”

Although mortgage rates have dipped to all-time lows, lenders are tightening credit standards, thereby limiting the pool of buyers who can leverage this opportunity in their favor.

Yet, despite the challenges, Realtors® continue to help serious buyers secure their perfect home.

Not surprisingly, with the entire state under stay-at-home orders since March 23, closed sales in April were sluggish. The number of single-family homes closed in April was down 22%, from 318 a year ago, to 248 last month.

Condo sales were even less active — down 27.9% — from 476 units closed in April 2019, to 343 closings last month.

Possibly due to a large reduction of inventory, demand for the remaining listings was strong, and median sales prices — single-family and condo — were up.

Single-family home MSP gained 5.5%, from $766,760 in April 2019 to $809,000 last month. And the MSP for a condo was up 7.4%, from $418,950 a year ago, to $450,000 last month.

“While accepted offers dropped almost 40% as compared to last year, new listings on the market dropped by 45% in April, reducing overall inventory by 24%,” says Kim. “That explains why many of our listings were receiving multiple offers.”

After the first four months of 2020, the MSPs in both segments are up, year-to-date. MSP for SF homes is at $788,500 and for condos is at $434,000 gains of 1.7% and 4.6%, respectively.

NEIGHBORHOOD MARKET STANDOUTS

HBR reports statistics on a monthly basis. Island-wide stats are based on figures from the previous month, however, individual neighborhood stats are from two months previous. The most recent neighborhood report is from data collected in March, and does not reflect the current environment — April data may likely be radically different.

This month’s standouts, for continuity, will be taken from the Island-wide April statistics — the most recently gathered. The following table reflects the price points where sellers received the highest percentage of their original list price, and where most of the number of closed sales took place.

SOURCE: Honolulu Board of REALTORS® , compiled from MLS data.