Dips in single-family home and condominium resales volume in December 2018 ended three consecutive years of sales volume growth for the Honolulu market.
In December 2o18, single-family home sales dropped to 259, down just over 28 percent from December 2017, according to a report released today by the Honolulu Board of Realtors. Condominium sales in December 2018 fell to 440 sales, an almost 5 percent drop from December 2o17.
The December sales declines contributed to a nearly 8 percent drop in annual single-family home resales to 3,609 and a nearly 3 percent drop in annual condominium resales. which fell to 5,679.
The results were in sharp contrast to the last three consecutive years, where sales volume growth ranged from about 5 to 6.5 percent each year for single-family hones and 4.5 to 8.5 percent for condominiums.
Rising prices combined with rising interest rates has put downward pressure on sales. New records were set in 2018 for median prices for single-family homes and condominiums.In March 2018, the median price paid for a condominium rose to a record $435,000, while the median price for a single-family home reached a new high of $812,500 in September.
However, December’s results show that pricing is moderating, too. In December 2018, the median price paid for a single-family home rose to $788,000, a gain of more than 5 percent from December 2017. However, the median price paid for a condominium fell to $398,500, a drop of nearly 2 percent from December 2017. Half the homes in Honolulu traded for above and half the homes traded for below the median price.
Comparing 2017 to 2018, the annual median price paid for a single-family home rose nearly 5 percent to $790,000 and the annual median price paid for a condominium increased nearly 4 percent to $420,000.
Darryl Macha, 2018 president of the Honolulu Board of Realtors, said in a news release that December 2018 home prices remained stable despite sales slowing and active listings increasing in the last few months of 2018. Still, the market is changing.
“We began to see a shift in the market during the last quarter of the year and as 2019 begins, it appears that trends point toward a more balanced market for buyers and sellers,” Macha said.
Real estate professionals say a more balanced market means that the new year may bring more options for buyers to consider, but given rising interest rates they should still move fast.
In 2018, inventory of single-family homes increased by more than 10 percent and condominiums increased by nearly 13 percent over the previous year.
“With the increased inventory in both single-family homes and condominiums, well-qualified buyers may have more options to consider. While current mortgage rates are still relatively low, they are anticipated to rise this year, so those ‘on the fence’ may want to consider purchasing sooner rather than later,” he said.