Boom in Oahu’s housing market continued in June

Buyers continued to beat down the door of Oahu’s housing market in June, pushing the median sale price for single-family houses to a new peak for the fifth time in six months.

The Honolulu Board of Realtors said in report released Tuesday that the median sale price for single-family homes surged 27% to a rec­ord $979,000 last month, compared with $770,000 a year earlier.

Last month’s median price narrowly topped the prior high of $978,000 in May and followed earlier peaks of $950,000 in March, $917,500 in February and $883,000 in January.

Local economist Paul Brewbaker said in a presentation last month that the price surge is a product of low inventory not accommodating demand from more local and mainland residents seeking to buy single-family residences because they are working from home amid the coronavirus pandemic.

“Demand went up, supply can’t respond,” he said at an online event organized by Honolulu-based real estate brokerage firm Luxury Homes International. “It’s a supply chain breakdown, just like computer chips and toilet paper. Single-family homes weren’t being listed at a moment when demand for those types of dwellings went up.”

There were 451 single-­family home sales in June, up 49% from 302 in the same month last year.

Last month’s sale volume reflected a third straight month of exceptionally strong buyer demand, after year-over-year gains of 63% in May and 51% in April that followed gains between 5% and 19% in the first three months of the year.

Some of the big recent increases are due to sales last year being depressed by prospective buyers who put off purchases amid uncertainties over jobs and the economy as COVID-19 spread wildly. Still, sale volumes in the first six months of this year are higher than the same months in 2019, before the pandemic.

“All of a sudden, everybody wants a single-family home and nobody wants to sell theirs,” Brewbaker said. “There’s the problem.”

In Oahu’s condominium market, sale volume growth exceeded that of single-family homes in June.

The number of condo sales jumped 134% to 730 last month from 312 a year earlier, which helped push up the median sale price by 9% to $460,000 over the year-earlier figure of $421,500.

Last month’s median condo price was the highest for any month since July 2019 when a record was set at $461,500.

The median price is a point at which half the sales were for more and half for less.

Shannon Heaven, president of the Honolulu Board of Realtors and an agent with Property Profiles, said in a video posted by the trade organization that some of the spike in condo purchases is from buyers who decided not to pursue a single-family home due to a severe lack of inventory and competitive bidding wars.

“Those who may have thought they wanted a single-family home may not really be willing to pay that price range anymore,” she said. “It’s just a really crazy time.”

Brewbaker said in his presentation that many condo owners have been selling units because of vacation rental market restrictions and depressed demand. He said condo prices haven’t been surging like single-family home prices because of more inventory and more new condo construction, compared with relatively few single-family homes being built.

There were 1,698 active condo listings in June, down from 2,326 a year earlier. For single-family home inventory, there were 769 listings in June, compared with 1,179 a year earlier.

New listings have been on the rise in recent months but are not keeping pace with demand.

Sales in the trade association’s report reflect transactions that closed in June, which typically reflect sales agreements signed one to three months earlier.

Sales in the report also include only previously owned homes and not new homes, which can distort sale volume when a new condo tower or subdivision is completed.