Oahu housing prices go through the roof

The definition of a midpriced single-family home on Oahu isn’t $800,000 — yet. But the island isn’t too far away from reaching that real big round number after buyers bidding up prices last month helped break a local housing market record.

The Honolulu Board of Realtors released a report for publication today showing the median single-family home sale price surged to a record $760,000 in June. That was 9 percent more than the $700,000 median price in the same month last year, and shattered the prior peak of $733,500 reached in January.

What’s more, the median condominium sale price also sprang to a new high in June — $405,500. That represented a 20 percent gain from the $338,500 median price a year earlier, and topped the previous record of $389,500 set in April.

Local brokerage firm Locations noted in a report that competition for available properties is becoming increasingly heated, with more buyers bidding up prices. And though there weren’t more single-family home sales last month, the homes that did sell in June sold faster than ever.

There were 324 single-family homes sold in June, unchanged from the same month last year. For condos, the number of sales rose 10 percent to 548 last month from 500 a year earlier.

The pace of sales was exceptionally fast for single-family homes, which spent a median of 14 days on the market before a seller accepted an offer. Around 20 or 25 days has been more typical over the last two years, though the number has dipped to 15 days twice in the same period.

“While prices are on the rise across many neighborhoods in Hawaii, we are seeing continued strength in buyer demand, most notably reflected in the fast pace of sales and the multiple offer environment for both single-family homes and condominiums,” Dan Tabori, a Locations executive vice president, said in the report.

Tabori cited low interest rates and Oahu’s prolonged low inventory of homes for sale as major reasons for why buyer demand remains high.

Kalama Kim, principal broker at Coldwell Banker Pacific Properties and president of the Honolulu Board of Realtors, noted that June’s single-family home median price was pumped up a bit by a flurry of really pricey home sales.

There were 20 sales for $2 million or more last month. By comparison, in May there were nine.

The median is a point at which half the sales were at a higher price and half at a lower price.

Kim recommended that prospective homebuyers consider widening their search given the strong competition and rising prices, but said there are still a considerable number of affordable homes available.

At the end of June, 129 of 1,243 single-family homes on the market were priced at $550,000 or below. And there were 400 condos priced at or under $250,000 out of 1,859 condos on the market.

“Affordable homes are still available,” Kim said in the board’s report.

Suzanne Young, CEO of the board, said two bills signed into law by Gov. David Ige last week should help address the growing demand for housing in Hawaii.

One bill, House Bill 2293, allows the Hawaii Housing Finance and Development Corp., a state agency that facilitates affordable-housing development, to pursue mixed-use projects and partner with more state and county departments.

The other measure, House Bill 2305, allows HHFDC to assist state agencies, counties and private developers with infrastructure costs in planned growth areas.

“The dwindling inventory of housing units and the rising cost of properties are putting immense pressure on our residents, businesses and the economy,” Young said in the board’s report. “Action needs to be taken to create more housing at all price points, and these measures passed by the Legislature are welcome steps.”

Still, it will be challenging to deliver enough homes to better balance supply and demand.

The state Department of Business, Economic Development and Tourism issued a report last year projecting that about 65,000 new homes statewide would be needed to keep pace with population growth over 10 years, or 6,500 annually. Yet closer to 3,000 homes a year have been built in recent years. Most of the new housing — more than 25,000 homes — would be needed on Oahu.

Such production isn’t planned in the near term, so prices are expected to continue to rise.

The University of Hawaii Economic Research Organization projected in a February report that median Oahu home prices for the year will be close to $750,000 for single-family homes and just shy of $400,000 for condos.

Actual figures for the first six months of the year are $727,000 for single-family homes and $385,000 for condos.