2023 Year-End Report
In 2023, Oahu experienced a significant decrease in home sales, with a drop of more than a quarter. Single-family home sales declined by 26.3%, and condo sales were down by 28.0%. Home prices experienced a slight decrease, with the median price for single-family homes remaining above $1 million, finishing the year at $1,050,000, representing a 5% decrease. Condos had a median price of $508,500, reflecting a marginal 0.3% drop.
Sellers received slightly less than the original list price for their properties. The overall sales price to original list price ratio decreased, with median ratios of 98.3% for single-family homes and 98.6% for condos. This decline occurred despite competition in specific parts of the market due to low inventory.
This suggests that buyers might have a bit more negotiating power when it comes to the price of a home.
Affordable Homes Thrive Amidst Decline in Single-Family Sale
Throughout 2023, single-family home sales faced a decline across various price points, except for properties priced at $699,999 and below. This particular segment experienced a noteworthy 10.7% increase in sales. The exceptional performance of homes in this price range can be attributed to various factors.
One contributing factor is the heightened demand for more affordable housing options, especially among first-time homebuyers and individuals with budget constraints. The allure of relatively lower-priced properties likely attracted a larger pool of prospective buyers, boosting sales in this category.
The geographical distribution of these affordable home sales also played a role in their success. A significant majority of these transactions, accounting for 62%, occurred in the Leeward region. This suggests that the appeal of affordable homes was particularly strong in this area, potentially due to factors such as accessibility, amenities, or community preferences.
Conversely, properties within the $900,000 to $1,399,999 price range experienced a substantial decline of 34.0%, resulting in 543 fewer sales. This decline could be influenced by factors like tightened lending conditions, economic uncertainties, or a shift in buyer preferences towards more budget-friendly options.
In the condo market of Oahu, there was a widespread double-digit decline in sales across all price points in 2023. However, Kailua stood out as the exception, showing minimal change with only two fewer sales than the previous year. In contrast, all other regions experienced significant sales declines of 24% or more.
For sellers, particularly in regions where significant sales declines occurred, the market may become more challenging. The reduced number of sales could impact property values and potentially lead to longer listing durations.
In contrast, for sellers in Kailua, where sales remained relatively stable, the market conditions may offer a more favorable environment for selling properties. Buyers may find opportunities in regions experiencing sales declines, as the increased inventory and potentially reduced competition could lead to more negotiating power.
In 2023, both the single-family home and condo markets experienced a significant decline in new listings. Single-family home listings dropped by 20.2% to 3,324, while condo market new listings decreased by 18.0% to 6,123. This decline in new listings carries important implications for both buyers and sellers.
One key reason behind the decrease in new listings is the reluctance of sellers to enter the market due to the prevailing high-interest rate environment. Many homeowners, already benefiting from mortgages with lower interest rates, are hesitant to sell their properties and potentially face higher interest rates available in today's market. This reluctance contributes to the scarcity of available properties, limiting choices for prospective buyers.
Furthermore, the decline in closed sales above the original asking price signals a shift in market dynamics. In 2023, only 29% of single-family homes received offers above the original asking price, compared to 50% in 2022. Similarly, in the condo market, 21% of condos sold above the original asking price in 2023, down from 37% in 2022.
For buyers, this situation means a reduced inventory of available homes and potentially less competition, but it could also lead to fewer options. Sellers, on the other hand, may find it challenging to command offers above the original asking price, requiring careful pricing strategies and a keen understanding of market conditions to navigate the changing landscape.
A decline in pending sales was evident, primarily attributed to elevated borrowing costs, affecting overall buying activity. Single-family home contract signings dropped significantly by 18.7%, totaling 2,796, while condo contract signings witnessed a decline of 22.1%, reaching 4,721.
The increase in borrowing costs serves as a primary driver behind the decline in pending sales. Higher interest rates make obtaining mortgages more expensive for buyers, potentially deterring them from making purchasing decisions.
The decline in pending sales may translate into a more competitive market with fewer available options. With reduced inventory, potential buyers faced challenges finding suitable properties within their desired price range.
The duration for selling homes on Oahu increased compared to the previous year. Single-family homes had a median selling time of 22 days, indicating an 83% rise, while condos took 21 days, showing a 75% increase.
The total sales for single-family homes in the year-to-date (YTD) 2023 reached 2,560, marking a 26.3% decrease from the 3,474 recorded sales in 2022. Additionally, the median prices for these single-family homes decreased by 5% compared to the previous year. Condos also faced a decline in sales, experiencing a 28% drop, with 4,573 closed sales in 2023 as opposed to 6,353 in 2022. Furthermore, condos saw a slight decrease of 0.3% in median sales price in 2023.
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