A price peak for Oahu’s housing market has stood tall for six years, but increasingly the record appears poised to fall.
The latest home sales data set to be released today by the Honolulu Board of Realtors shows that August was a hot month for the market, adding further momentum to topple the annual median price peak for single-family houses and condominiums set in 2007.
Leading the charge has been the condo market. In August the median condo sale price rose to $350,000 — its highest for any month. It was the second straight month and third time this year that the figure hit a new high.
Last month’s condo median price was up 9 percent from $320,000 in the same month last year. In July the median reached $345,000, which eclipsed the prior high of $340,000 in February.
The full-year record for Oahu’s median condo price was $325,000 in 2007 and repeated in 2008. This year through August the median price is already at $331,000.
In Oahu’s single-family house market, the median in August rose 9 percent to $665,000 from $609,000 in the same month last year. The record for any month is $685,000, set in June 2007.
Year-to-date the single-family house median price is at $639,000, or just $4,500 shy of the $643,500 annual peak set in 2007.
Local economists earlier this year predicted that Oahu’s housing market would flirt with a banner year in 2013 given beneficial economic factors that include record Hawaii tourism, rising employment and low mortgage interest rates.
The University of Hawaii Economic Research Organization and Paul Brewbaker of Honolulu consulting firm TZ Economics both made forecasts early this year that said the median single-family home price for all of 2013 would be around $650,000.
One big reason for price appreciation is a relative dearth of new homes being built and a tight supply of existing homes available for resale.
"Oahu’s lack of new home supply and shortage of existing home inventory is consistent with accelerating rates of home price increase during the next several years," Brewbaker said in an April report.
Brewbaker also said in the report that the median single-family house price on Oahu next year should reach $750,000.
UHERO a year ago forecast that the median house price on Oahu would hit $787,400 in 2015. In an update last month, the organization raised that 2015 price forecast to $805,600 and added a 2016 forecast of $872,600.
A rush of condo tower projects underway in Honolulu could influence the supply-and-demand equation affecting prices.
It also appears that more homeowners recently began adding a significant supply of existing homes to the market for resale.
There were 1,662 single-family homes available for sale last month, up from 1,554 in July and a recent low of 1,316 in February. Yet there was still more inventory in August 2012 with 1,778 listings.
Condo inventory last month stood at 1,225. That was up from 1,105 in July and a recent low of 939 in February. In August 2012, 1,230 condos were on the market.
It’s possible that more inventory will lead to more sales in the coming months. Last month the number of sales surged 25 percent to 366 for single-family houses. For condos, sales rose 13 percent to 460.
"We really experienced a boom," Kevin Miyama, president of the Honolulu Board of Realtors, said in a statement about the volume gains.
Still, it appears sales volume has quite a way to go before breaking a record. Board of Realtors data show that the peak for single-family house and condo sales combined was 12,607 in 2005. That’s an average of about 1,050 a month. This year through August there were 5,336 sales, or an average of 667 a month.
