Oahu’s housing market avoided a hard landing in July after the termination, for the most part, of a federal stimulus program that had helped elevate home sales for the last year or so.
Sales of previously owned single-family homes were mostly flat at 268 last month, compared with 266 sales in the same month last year, according to Honolulu Board of Realtors data compiled by 10K Research and Marketing.
The median sale price was up 1.7 percent to $605,000 from $595,000 in the same period.
Oahu’s condominium market didn’t fare as well, but declines were modest.
The median condo sale price in July dipped 2.7 percent to $299,000 from $307,250 a year earlier, while the number of sales was down 6.7 percent to 320 from 343.
» Neighborhood Watch: Oahu single-family home and condominium resale data for July by neighborhood.
It was anticipated that July would shoulder the brunt of effects from the end of the stimulus program that provided tax credits of up to $8,000 for first-time homebuyers and up to $6,500 for repeat buyers.
"Oahu’s post-tax-credit sales landscape is quieter, as are other markets, but we seem to be weathering better than our mainland counterparts," said Brian Benton, an agent with Prudential Locations and president of the Honolulu Board of Realtors.
The number of homes sold on Oahu in July with the median price and percentage change from the same month last year:
Source: Honolulu Board of Realtors
Some local economists suspected that there might be a big letdown in post-tax-credit home purchases on the premise that sales were pulled forward in time as buyers aimed to capitalize on the rebate.
Under the federal program, which began last year, buyers had to sign purchase contracts by April 30 and close by June 30. So July was to have been the first month without stimulus-influenced sales.
However, early last month Congress extended the closing deadline to Sept. 30, so some sales in July likely involved buyers influenced by the tax-credit incentive.
The National Association of Realtors estimated that 710 buyers in Hawaii had pending purchases that could benefit from the extension.
Ricky Cassiday, a local housing market researcher, suspects that gains in sales volume might peter out in the absence of government help.
"I hate to be a pessimist, but I think the market is going to get slower," he said. "Demand is questionable."
Through July, Oahu’s housing market appears to be in the midst of a still-tentative recovery as positive effects of the stimulus program, extremely low interest rates and relatively healthy home inventory are being buffeted by relatively high joblessness, stagnant personal income and restrictive lending. A high level of foreclosures is another factor that might be spurring sales while depressing prices.
For the first seven months of the year, the median sale price for single-family homes is up 1.7 percent at $585,000. The number of sales is up 26.9 percent at 1,747.
The condo market year to date has experienced a bigger gain in sales activity, a 36.1 percent rise to 2,338 transactions, but the median price is down 0.3 percent at $304,000.
The University of Hawaii Economic Research Organization issued a forecast in March with input from Paul Brewbaker of TZ Economics that predicted a 0.9 percent increase in the median for the single-family home price and a 1.1 percent decrease for the condo price.
If the single-family home price rises for the full year, it would reverse two years of moderate declines — 3 percent in 2008 and 8 percent last year.
The median price for Oahu’s condo market was unchanged in 2008 and declined 7 percent last year.
The number of annual sales has been dropping since 2005 for single-family homes and since 2006 for condos.