Market retains strength

Oahu home prices remained at lofty, near-record levels in May as strong buyer demand continued to put pressure on a market with rising yet still relatively low inventory.

The median price for single-family houses sold last month came in at $682,000 — just shy of the $685,000 record for any month, which was set in June 2007 and matched in December.

Condominiums sold in May for a median $355,000, which matched the median in April and isn’t far from the record, set in February at $359,450.

The May statistics were released by the Hono­lulu Board of Realtors for publication Saturday.

"It’s a crazy market right now," said Michelle Okura-Danailov, principal broker of Realty Pacific LLC. "It’s a seller’s market."

Okura-Danailov said one of her clients searching for a home in Mililani and offering to pay all cash has been outbid three times. Another client of hers selling a home recently received seven bids two days after listing the property — and four of the bids were over the asking price. "It’s just nuts," she said.

Local economists have been saying for many months that home prices on Oahu are being driven higher by demand fueled by job growth, rising personal income and low interest rates in the face of tight inventory of homes for sale and relatively little new housing construction.

Home prices on Oahu have been modestly rising since 2012, though the economists predict more robust gains should be expected over the next couple of years.

The University of Hawaii Economic Research Organization in March forecast that Oahu’s single-family house median sale price will rise about 10 percent this year to roughly $710,000 and another 9 percent next year to about $775,000.

This year through May the median single-family house sale price is up 5 percent to $655,000. The gain in May was 8 percent compared with $630,000 in the same month last year.

For condos UHERO predicts that median prices will rise about 6 percent this year to about $355,000 and another 6 percent next year to about $375,000.

Through May the median condo sale price is at $350,000, which represents an 8 percent gain over the $325,000 median for the same five months last year. The median price in May represented a 13 percent gain over the same month last year.

Julie Meier, president of the Honolulu Board of Realtors and an agent with Prudential Locations LLC, noted that inventory has been increasing but not enough to outpace rising demand.

"People are snapping up properties as soon as they hit the market creating more demand and competition among buyers, which in turn raises prices," she said in a statement.

The number of single-family houses on the market at the end of May was 1,279, which was up from 1,074 a year earlier and 1,170 in April.

In the condo market there were 1,793 units for sale at the end of May, which was up from 1,448 a year earlier and 1,775 in April.

Meier said the imbalance between supply and demand could prompt more homeowners to try capitalizing on the market.

Something similar happened during the last market boom. In May 2005 there were 854 single-family houses on the market. That figure more than doubled to 1,722 a year later. In the condo market there was a similar increase during the same time.

"With median prices at a near all-time high and strong demand, we may see more homeowners putting their properties on the market," Meier said.