Record prices in sight

Oahu’s housing market is looking like it will reach new annual highs this year by producing moderate gains in median prices for a third consecutive year.

The Honolulu Board of Realtors released results of sales in October for publication Friday, and median price gains of about 8 percent for single-family houses and condominiums pretty much assure that records set last year will fall.

"I feel the market is going to be strong headed into 2015," said Myron Kiriu, owner and president of Prudential Advantage Realty. "I think we have a couple more years left (for price growth)."

Single-family houses sold last month for a median $690,000. That was up 7.8 percent from $640,000 in the same month last year and represented the second-highest median price for any month following a record $700,000 set in June.

The annual record median price was set last year at $650,000. This year through October the figure is $670,000.

For condos the median sale price in October was $352,750. That was up 8.5 percent from $325,000 the same month last year and is about where the median has been for most months this year.

The annual record median price for condos was set last year at $332,000 and is at $350,000 after 10 months this year.

Local economists have attributed the gains to persistently low interest rates, rising personal income and job growth that are boosting demand while little new housing is being delivered. Relatively few existing homes being put on the market for sale also has been a factor, though that constraint has been easing in recent months.

Earlier this year state economist Eugene Tian said population growth has produced about 1,900 more households than new homes on Oahu in each of the last three years on average. Oahu would need to add 3,525 new homes annually to match a 1 percent projected population growth, yet 1,612 homes per year on average were approved for construction from 2010 to 2013, he said.

Such demand outstripping supply is one reason that the University of Hawaii Economic Research Organization forecasts that the median sale price for single-family houses on the island will reach about $750,000 next year.

Jeffrey Samuels, owner of Jeffrey Samuels Real Estate Services, said the demand is so strong that he begins to worry about the prospects of a home selling if it hasn’t received an offer within the first week to 10 days of being listed for sale.

"They’re going pretty quick," he said. "The market’s great."

In the last couple of months, that quick pace has slowed somewhat in part because there are more homes to choose from.

For instance, in August single-family houses spent a median 15 days on the market before sellers accepted an offer. That figure rose to 19 days in September and 31 days in October.

"It’s been a while since we’ve seen the median days on market for homes get as high as 31 days," Julie Meier, president of the Hono­lulu Board of Realtors, said in a statement. "Slowly increasing inventory is giving buyers more choices, and that is reflected in last month’s days on market (number)."

For condos the median number of days spent on the market before sellers accepted an offer has been at 23 for the last four months.

The number of sales in October was up 2.8 percent to 298 from 290 a year earlier for single-family houses. For the first 10 months of the year, volume is up 1.8 percent.

Condo sales rose 6.9 percent in October to 448 units from 419 a year earlier. The year-to-date figure is up just 0.2 percent.

Like sales, inventory has been increasing this year.

For single-family houses, inventory has been between 1,200 and 1,280 since May. That is up from about 1,070 to 1,170 earlier in the year. Early last year inventory was as low as 939 homes.

Condo inventory has been a little over 1,800 since July compared with a range of about 1,560 to 1,790 earlier in the year. Early last year inventory was as low as 1,316 units.