Oahu homes stay above $1 million to end 2021 as sales slip

Tight inventory in Oahu’s housing market finally pulled down single-family home sales to end 2021 but is expected to keep upward pressure on prices this year.

Data released Thursday by the Honolulu Board of Realtors showed that the median sale price for previously owned single-family homes on Oahu stayed on its high $1 million plateau in December while a 13-month string of increased sales for such homes was broken by a 10% drop.

The median single-­family home sale price last month was $1,050,000, to be more precise, and matched the peak first reached in August and repeated in September and November.

Compared with a year earlier, December’s median sale price represented a 21% rise over $870,000.

For all of 2021, Oahu’s median single-­family home sale price was $990,000, up 19% from $830,000 the year before.

Sale volume for single­-family homes on Oahu had been on a tear for much of 2021, with year-over-year increases from 12% to 63% from March to August and smaller gains in every other month — until last month.

In December there were 378 single-family home sales, down 10% from 420 in the same month the year before.

For all of 2021 there were 4,526 single-family homes sold on Oahu, up 18% from 3,838 in 2020.

Chad Takesue, this year’s Honolulu Board of Realtors president, said the inventory level of single-family homes listed for sale, which sagged to a more than four-year low in December, is largely the driving force of the sales drop in December.

“Primarily, we see that attributed to the lower inventory for the single-family home product versus the condo market product,” he said in a video message.

The number of single-­family homes listed for sale at the end of 2021, after new listings and sales during December, fell to 309. That compared with 419 at the end of 2020 and 953 at the end of 2018.

Another factor at play, according to some brokers, is single-family home prices rising beyond the reach of more and more prospective homebuyers. This, in turn, is helping fuel condo resale volume that far outpaced single-family home sales in 2021.

There were 593 condo sales in December, up 15% from 514 sales a year earlier. For all of 2021, condo sale volume soared 53% to 7,203 units from 4,706 in 2020.

Condo inventory stood at 946 units at the end of 2021, down from 1,459 at the end of 2020.

The median price for condos sold in December was $485,000, up 7% from $455,000 in the December 2020. For all of 2021, Oahu condos sold for a median $475,000, up 9% from $435,000 the year before.

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

John Connelley, principal broker for major local residential real estate firm Locations, said in a report earlier this week that low inventory and strong buyer demand will keep driving up Oahu home prices this year.

“Oahu’s for-sale housing inventory is at new record lows as we begin the new year,” he said in the report. “Lack of inventory for sale continues to challenge the market, pushing prices higher and fueling homebuyer competition. We’re firmly in seller’s market territory and likely to remain there for the foreseeable future. Homebuyers should be prepared for prices to continue to increase this year, even as historically low mortgage interest rates are expected to tick up.”

The University of Hawaii Economic Research Organization said in a report in December that it expects Oahu’s annual median single-family home sale price will rise 8% this year to $1,066,800 and then settle at about $1,065,000 in each of the following two years.

For condos, UHERO’s annual median sale price forecast is $510,600 this year, up about 8%, followed by $515,700 in 2023 and $513,300 in 2024.