Oahu home prices dip but stay close to record

Oahu’s housing market in June had a hard time standing up to a year-old record, and thus recorded its first median price decrease in more than 12 months.

The decline was a slight one for previously owned single-family homes: a 1.6 percent dip in the median sale price to $782,388 last month from $795,000 a year earlier, according to Honolulu Board of Realtors data released Friday.

June 2017’s median price was a record that has yet to be matched, though the market has come close a few times in recent months, including $790,000 in April and the figure last month.

“Single-family home prices were at an all-time high and selling at a record pace this time last year, and this year’s numbers are not far off,” Darryl Macha, president of the trade association for Oahu real estate agents, said in a statement.

For the first half of this year, Oahu single-family home prices have maintained a modest level of growth. The median sale price through June is up 3.9 percent to $779,000 compared with $750,000 for the first six months of last year.

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

Hawaii’s largest housing market is in its seventh consecutive year of moderate annual price increases. The last time there was a decrease in the median sale price for any month was a 1 percent dip in April 2017.

As prices get more lofty, however, sale volume has started to show weakness, especially in the face of mortgage interest rates that are rising from around historically low levels.

There were 365 single- family home sales last month, down 1.4 percent from 370 a year earlier. Through June, 1,760 homes have been sold, down 1.6 percent from 1,789 sales in the same period last year. The weakness follows three years where sale volume increased between 5 and 6.5 percent each year.

The softened demand comes as the inventory of homes for sale has been on a steady rise since February. Last month there were 1,361 Oahu single-family homes listed for sale. That was the highest number for any month since November 2011 and compared with 1,262 listings in June 2017.

George Krischke, principal broker of Honolulu firm Hawaii Living, said interest rates could be a factor in the softness. But he thinks more new condominiums being built in Honolulu are providing heightened competition for the single-family home segment of the market where developers are not adding much new inventory.

“Condo living is becoming more popular,” Krischke said. “It is more affordable. They become an attractive alternative to homes that are not updated or are older construction. There aren’t too many new modern homes out there.”

Sales and median prices for Oahu condos were higher in June.

There were 547 condo sales last month, up 2.1 percent from 536 sales a year ago. This year through June, condo sales have edged up 1.3 percent to 2,833 units from 2,797 units in the first half of last year.

Condos sold last month for a median $420,000. That was 5 percent higher than the $400,000 median price a year earlier. For the first half of this year, the median condo sale price is up 6.5 percent to $425,000 from $399,000 in the same period last year.

Honolulu Board of Realtors statistics count only sales of previously owned homes. Typically, sales reported in one month stem from purchase contracts signed one to three months prior.