Sales volume reaches 2-year high for homes, condos on Oahu

The summer season for selling homes has gotten hot in Hono­lulu.

The volume of sales in August for previously owned Oahu homes rose to levels not seen in roughly two years, according to data released Friday by the Hono­lulu Board of Realtors.

Median prices also were up in August over the same month a year earlier, but they weren’t dramatically above or below most levels earlier this year.

The median price for single-family homes rose 9.2 percent to $609,000 last month from $557,500 in the same month last year. And for condominiums the median price was up 6.7 percent to $320,000 from $300,000.

But the trade group representing local real estate agents drew particular attention to the volume of sales in August as another indicator supporting what local economists say is a rebounding market poised for dramatic price increases.

The number of single-family home sales last month rose to 293 from 279 a year earlier, a modest gain of 5 percent. However, the August volume was higher than any month since December 2010.

Condo sales rose more dramatically — jumping 21 percent to 409 last month compared with 338 a year earlier. The last time there were more sales was June 2010.

"This has been one of the best summers we’ve seen in many years, with closed and pending sales of both single-family homes and condominiums rising throughout the summer to highs in August," Joe Pai­kai, the trade group’s president, said in a statement. "This is a good indicator that the market is finally recovering."

Observers said the volume gains are noteworthy given relatively low levels of inventory that industry experts say is dampening buyer activity and helping push prices higher.

Record-low interest rates and a growing economy are also factors aiding Oahu’s housing market, according to local economists Paul Brewbaker of TZ Economics and Carl Bonham of the University of Hawaii Economic Research Organization.

UHERO predicted in a July report that Oahu’s annual median single-family home price will rise between 7 and 9 percent this year and in each of the next three years. That equates to a median price of $626,300 this year, $672,000 next year, $720,300 in 2014 and $787,400 in 2015.

The prior annual median price peak for Oahu single-family homes was $643,500 in 2007. So if UHERO’s forecast is accurate, a home price record would be set next year.

UHERO forecasts that condo prices will rise about 3 percent this year and next year, then rise between 6 percent and 7 percent in each of the following two years. That equates to a median price of $309,200 this year, $317,200 next year, $336,100 in 2014 and $360,400 in 2015.

The prior annual median price peak for Oahu condos was $325,000 in 2007 and 2008 — a record that would be eclipsed in 2014 if UHERO’s forecast is on the mark.

Brewbaker expects slightly higher future median home prices compared with UHERO.

Tai Hong, however, doubts the economists’ predictions will prove true. Hong, a retired Hawaii Air National Guard pilot who lives in Hawaii Kai, suggests that chances are more likely that an extraordinary unanticipated event will ice down any heated run-up in Oahu home prices.

It could be a disease outbreak, drought or trouble with Iran, North Korea or Syria, he said. The U.S. debt and ability of the federal government to place debt is another concern of his.

"China and others that have lent money to us may cut off the credit soon," he said. "Nobody knows when. But when that happens the median price of an Oahu home will be $380,000."