Sales of O‘ahu Homes Cool Amid Rising Mortgage Rates
Median sales prices remain relatively flat, active inventory builds gradually
According to resales figures released today by the Honolulu Board of REALTORS®, rising mortgage rates are weighing on home sales. Year-over-year, single-family home and condo sales dropped 34.4% and 19.3%, respectively, and compared to August 2022, single-family home sales were down 11.5%, while condo sales dipped 2.4%. Pending sales activity was also muted compared to last year, with contract signings falling 43.7% for single-family homes and 30.7% for condos.
Using data collected from its computerized Multiple Listing Service (MLS) system, the Board reported the following statistics:
Single-Family Home Resales
|Number of Sales||Median Sales Price|
|September 2022||278 -34.4%||$1,100,000 +4.8%|
|Number of Sales||Median Sales Price|
|September 2022||496 -19.3%||$502,500 +5.1%|
Median sales prices remained relatively flat over the last several months and saw a slight bump up compared to the same time last year. In September, the single-family home median was $1,100,000, up 4.8%, while the condo median sales price was $502,500, a 5.1% increase from a year ago.
“With rising rates and inflation, buyers are reevaluating what they can afford, and this is having ripple effects across supply and demand in our local housing market,” said Chad Takesue, president of the Honolulu Board of REALTORS®. “Fortunately, our 10-year appreciation rates on O‘ahu have been historically favorable, so despite interest rates being about 6%, real estate is still a smart investment. It’s important to remember that the market varies from neighborhood to neighborhood, and housing opportunities are available for everyone.”
New listing volume continued to fall, declining 26.2% for single-family homes and 18.6% for condos from a year ago. However, properties are spending more time on the market. The median days on market for single-family homes rose to 18 days, compared to 9 days in September 2021, and condos marked 14 days in September, compared to 11 days during the same period last year. Although active inventory increased, up 43.9% and 10.8% for single-family homes and condos, respectively, it is approximately 40% below its 2019 pre-pandemic level.
Fewer single-family homes and condos are closing above the asking price, with 36% of single-family homes sold above the original offer compared to 64% in September 2021 and 29% for condos compared to 40% during the same time last year.
“We’re in a different market environment than we experienced one year ago. Now, we see properties spending more time on the market before moving into escrow and bidding over the asking price is becoming less common. That’s why it’s essential to work with a trusted REALTOR® to help meet your real estate needs, especially during this time as the market transitions,” Takesue added.
Additional single-family home market insights
Single-family home sales fell across most price points in September, with the largest decline in the $600,000 to $899,999 price range, down 45.4% from last year. Sales also declined in most regions. Pearl City was the only region where sales increased slightly, with 22 sales compared to 20 last year. Of the new listings that came on market in September, only 23% were in escrow or sold by the end of the month, compared to 56% last September.
Active inventory rose across most price points due to the decline in pending sales. Homes in the $999,999 and below price range made up a slightly larger share of inventory at 33%, compared to 30% last year, with active units up by 59.2% year-over-year.
Additional condominium market insights
September’s decline in condo sales occurred primarily in the $799,999 and below price range, down 23.6% from a year ago. Condos priced in the $800,000 and above price range increased by 10.4% year-over-year. New listings declined across most price points and regions, and by the end of the month, 33% of those listings were in escrow or sold, compared to 49% of listings last September.
Condos priced between $500,000 and $999,999 saw the greatest increase in active inventory, up 58.6%, followed by the $1,000,000 to $1,999,999 range, up 50.5% from a year ago.
Overview of third quarter stats
The third quarter of 2022 ended with sales well below the same period in 2021. Quarterly sales fell 27.9% for single-family homes and 22.4% for condos. Year-to-date, the shift in affordability has had a greater impact on the single-family home market, with sales down 15.8% from a year ago. The condo market is slightly trailing 2021 sales, with sales down 3.3% year-to-date.
The Q3 median sales price in most regions remained elevated from one year ago. However, the rise in median sales prices appears to have slowed or perhaps even reversed course in some areas. In the single-family home market, compared to Q2, the North Shore region saw a 15.1% decline, the Diamond Head region was down 12.8%, and the Leeward region dropped 10.5%. In the condo market, the Makakilo region saw the greatest decline in median sales price, down 7.8%, from Q2.
Compared to the same period one year ago, new listing volume in Q3 was down 20.1% for single-family homes and 14.0% for condos.