The median sale price of previously owned single-family homes on Oahu has fallen below the $1 million mark that was first eclipsed in August 2021 and consistently met or exceeded until January.
January’s median price was $970,000, down 8% from $1,050,000 in the same month in 2022, according to Honolulu Board of Realtors data released Monday.
The median sale price decline was the second consecutive year-over-year decrease after a 0.5% slip in December, and illustrated more evidence that the local housing market is softening amid high inflation, relatively high mortgage rates and concerns about the nation’s economy falling into recession later this year.
Demand from homebuyers had been constricting since February 2022 in Oahu’s single-family home market, and sales in January plummeted further by 54% to 150 from 326 a year earlier.
According to Board of Realtors data, the last time there were fewer single-family home sales in any month was in February 2009, during the Great Recession, when there were 129 sales.
“After 12 months of declining sales, we’re seeing more of the effects of the slowing market on median home prices,” Chad Takesue, chief operating officer of local real estate brokerage firm Locations, said in a company report released Monday.
The median price is a point at which half the sales were at a higher price and half were at a lower price.
Fran Villarmia-Kahawai, Board of Realtors president and an agent at Properties International Ltd., said in a statement that fewer sellers are receiving their full original asking price or higher when sales close, compared with 2022.
“Sellers are having to adjust their approach as buyer demand wanes due to elevated interest rates,” she said.
In some instances, sellers are reducing listing prices to help make sales. For instance, one house at Ocean Pointe in Ewa Beach was listed for sale in November at $1.1 million and sold last week for $960,000 after the asking price was reduced to $975,000, sale records show.
Typically, sales reported in the trade association data take place one to three months after a buyer and seller agree upon a price with a contract.
Average interest rates on 30-year fixed-rate loans more than doubled from about 3% at the beginning of 2022 to 6.4% in December after hitting 7.1% in November. Last week the average was 6.1%.
Interest rates and other factors weighing on Oahu’s housing market also have been putting downward pressure on prices and sale volume of condominiums.
The number of condo sales in January sank 50% to 275 from 552 in the same month a year earlier. A string of falling year-over-year sale volume began in June with a 14% decline that grew in size over the second half of 2022 to around 40% in November and December.
Condos sold for a median $495,000 in January. That was down 3% from $510,000 a year earlier. The record was $534,000 in June.
The University of Hawaii Economic Research Organization in December forecast that housing prices on Oahu this year will decline moderately, by about 8% for single-family homes and about 6% for condos, and then slip by a little under 2% in 2024 before starting to rise again.
HOME SALES
The number of homes sold on Oahu in January with the median price and percentage change from the same month in 2022:
HOMES
SALES MEDIAN PRICE
Jan. 2023 150 $970,000
Jan. 2022 326 $1,050,000
Change –54.0% –7.6%
CONDOS
SALES MEDIAN PRICE
Jan. 2023 275 $495,000
Jan. 2022 552 $510,000
Change –50.2% –2.9%
Source: Honolulu Board of Realtors
