Oahu’s single-family home market hit a new record median price in August, and the median condominium price rose slightly, but once the results are seasonally adjusted, they aren’t as rosy as they first appear.
The Honolulu Board of Realtors reported Tuesday that the median price of an Oahu single-family home climbed 6.2% to $839,000 from $790,000 in August 2019. Residential sales also held steady, rising 2.8% to 370 from 360 sales the year before.
The median price for a condominium in August grew but at a lesser acceleration, increasing only 2.5% to $430,000 from $419,500 in August 2019. However, condominium sales fell a steep 20.1% to 409 from the 512 condominiums that changed hands during the same month last year.
The median price results were good considering the toll the coronavirus is exacting on Oahu, where Honolulu Mayor Kirk Caldwell ordered another two-week lockdown Tuesday to combat a second wave of COVID-19 cases that began in July.
Single-family home and condo sales also are returning to the previous year’s levels after a coronavirus- related dip between April and June.
Still, Paul Brewbaker, principal of TZ Economics, says the seasonally adjusted trend line for Oahu shows that the single-family home median price is at the upper end of flat and that the condominium market already is experiencing downward price pressure.
“The headline is that the single-family home median price is higher than it’s ever been as long as you don’t seasonally adjust the data,” Brewbaker said. “It’s right up there with the highest median prices that we’ve ever observed, but if you go over the last 24 months, it kind of looks like it’s flattening out.”
Brewbaker said that over the last 24 months, seasonally adjusted single-family home median prices have ranged from about $760,000 to $830,000. The seasonally adjusted median price for a single-family home last month was $820,000, he said. According to Brewbaker’s records, the highest median price for Oahu on a seasonally adjusted basis was $833,678 in July 2019.
“We are at the upper end of the zone, and the fact that it is happening six months out from the pandemic is somewhat more encouraging than if we were at the lower end of the range,” Brewbaker said. “But it is within the zone that we’ve observed over the last 24 months and is suggestive of neither a strong upward push or catastrophic conditions. Bottom line, we’ve been in a holding pattern for 24 months, not just the last six months.”
Brewbaker said the median price for a condominium on Oahu has been soft since April. He said the seasonally adjusted median price for a condominium on Oahu was $425,000 in August, placing it in the middle of an arc. The highest seasonally adjusted median condominium price was $450,175 in October, Brewbaker said.
“It just looks like more of a downward bend for condos, but that could simply be the vacation rental ban enforcement piled on with the cessation of travel and tourism, a one-two punch for small investors in vacation rental condos in Honolulu,” he said.
On a more positive note, the pace of sales quickened in August despite ongoing coronavirus-related industry restrictions such as bans on open houses and a requirement that properties be shown by appointment only to masked and registered guests.
The Honolulu Board of Realtors reported that single-family homes sold 44.4% faster in August than in the same month last year, with properties spending a median of just 15 days on the market.
During the past three months, 43% of single-family home sellers received their full asking price or higher compared with 35% during the same period last year.
Part of the reason is that there were 20% fewer single-family home listings than last year, said Margaret Murchie, vice president of Coldwell Banker Pacific Properties’ Diamond Head- Kahala office.
New listings for condominiums remained 19% below last year. However, year-over-year median days on the market remained steady with condominiums spending an average of 23 days on the market.
“A lack of inventory coupled with high demand from buyers looking to capitalize on historically low interest rates is driving a very competitive market for single-family homes on Oahu,” Tricia Nekota, president of the Honolulu Board of Realtors, said in a statement.
Hawaii real estate analyst Stephany Sofos said some of August’s single-family home sales were likely fueled by a coronavirus- related desire on the part of some condominium owners to seek properties where they were better able to socially distance.
“The suburbs are becoming more attractive as more buyers look for homes where they can socially distance,” Sofos said. “The pandemic has made people less likely to want to share public spaces and elevators.”
Jason Lazzerini, president and CEO of Locations, noted in the company’s Oahu Residential Real Estate Report that COVID-19 lockdowns have meant more people are spending more time at home, causing “many Oahu residents to re-evaluate their needs for outdoor space, a home office or other amenities.”
Lazzerini said the rise in remote work also has led some workers to consider neighborhoods outside of the urban core they had previously excluded due to longer commute times.
Murchie said even some high-end luxury properties are starting to move again — but for how long, no one knows.
“Inventory in town is really depleted in the price point of $1.5 million to $2 million. Even properties that have been on the market for a substantial amount of time are going into escrow these days. The condo market, not so much,” Murchie said. “Military are buying and selling mostly west end, which is incredibly hot.”
Murchie said she does have concerns about “all of the layoffs at Hawaiian Air and all of the hotel people thinning their management ranks,” which could lead to a glut of inventory.
“I tell people who are thinking of selling their homes that now is the time to do it,” she said. “Prices are still high and it’s better to be first.”