Oahu’s sluggish real estate market is finally picking up.
According to recent data from the Honolulu Board of Realtors, single-family home sales rose 20.1% in July to their highest level in nearly two years, and the median price reached its fourth-highest level ever.
With the average interest rate on 30-year mortgages at its lowest level in over a year, buyers flocked to homes in July amid easing inflation and ahead of the start of the school year.
There were 269 sales of homes already sold, compared to 224 last year. The last time sales were higher in a month was 278 in September 2022.
The median price rose 4.6% from $1,090,000 to $1,140,000 – the highest since $1,149,500 in November 2022. The only other times the median price was higher were $1,153,500 in May 2022 and $1,150,000 in March 2022.
However, the condo market remained lackluster, as resales fell 7.8% in July to 389 from 422 a year earlier, but rose 9.6% from 355 in June. The average condo price rose 1.8% in July from $500,000 to $509,000. The record condo price was $536,000 in March 2023.
The median price is a point at which half of the sales occur at a higher price and the other half at a lower price.
“Although sales are mixed compared to last year, we saw an increase in sales activity in July for both single-family homes and condos, which is typical for this time of year,” said Fran Gendrano, president of the Honolulu Board of Realtors. “Demand and median sales prices continue to remain stable, particularly in the single-family market, despite an increase in active inventory.”
Inventory on Oahu continued to grow in both markets, with a 10.6% month-over-month increase for single-family homes and 8% for condos. At the end of July, there were 722 active listings for single-family homes and 1,867 active listings for condos. These numbers are up 22.2% and 61.8% year-over-year, respectively. Rising inventory levels signal that demand has slowed.
“We are closely monitoring interest rates, condo insurance and new practices and policies that could impact our market, but it will take some time before we see an impact,” Gendrano said.
The average interest rate on 30-year mortgages rose slightly last week, remaining near its lowest level in over a year.
The average 30-year mortgage rate was 6.49 percent last week, down from 7.09 percent a year ago and well below the 23-year high of 7.79 percent in October. Most of this year, the rate has hovered around 7 percent — more than double what it was three years ago.
The Federal Reserve is widely expected to cut its benchmark interest rate in September for the first time in four years. Economists expect the cut to be by a quarter or half a percentage point. The Fed will announce its decision on September 18. A cut would lower interest rates for borrowers and make buying a home more affordable.
Local real estate brokerage Locations said there are continuing signs of demand on Oahu, with single-family homes going into escrow in about three weeks and condos in about four weeks. The market remains competitive, with 3 out of 10 homes sold and 2 out of 10 condos sold bidding over asking price.
However, the sales pace is still about 20 percent below pre-pandemic levels, Locations noted.
“As we move into mid-2024, the single-family home market on Oahu is gaining momentum while the condo market continues to show signs of easing,” said Chad Takesue, Locations’ chief sales officer. “Despite higher borrowing costs, home prices are rising. Condo prices, on the other hand, have not changed since last year.”
Takesue said rising inventory and stagnant prices in the condo resale market are largely due to homeowners associations’ difficulties in obtaining adequate hurricane insurance and, therefore, sufficient financing.
“It’s important to know what financing options are available for condos with less than 100% replacement cost or condos with additional deferred maintenance and reserve study issues,” Takesue said. “The good news for buyers interested in these condo options is that prices have remained flat. We continue to see strong buyer demand and activity for new condo projects, which typically don’t have such issues.”
OAHU REAL ESTATE SALES
The number of homes sold in July with average price and percentage change from the same month in 2023:
HOUSES
SALES MEDIA PRICE
July 2024 269 $1,140,000
July 2023 224 $1,090,000
Change 20.1% 4.6%
Condominiums
SALES MEDIA PRICE
July 2024 389 $509,000
July 2023 422 $500,000
Change -7.8% 1.8%
Source: Honolulu Board of Realtors
