January 2024 Market Report
Last month, the housing market remained relatively subdued, with single-family homes experiencing a 5.1% decrease to $996,000, while condos saw a modest increase of 1.5% to $510,000. However, this trend is expected to shift in 2024, as multiple rate cuts are anticipated. These lower rates are likely to attract more buyers to the market and encourage more sellers to list their properties, thanks to the favorable interest rates.
As a result, increased activity is expected to drive prices higher. Potential buyers are advised to start their search now and secure a property while there is less competition, with the option to refinance later. On the other hand, sellers may want to exercise patience and wait before listing their properties.
Compared to this time last year, there was an increase in single-family home sales, up by 22.7%, and condo sales also went up by 6.2%. When we look at how sales changed from month to month, January sales were pretty similar to the end of 2023, with just a small increase in single-family home sales, up by 1.1%, and a bit more of an increase in condo sales, up by 7.4%.
In January 2024, the median prices of homes were quite like what we saw at the end of 2023. Single-family homes went for about $1,021,016, which is a bit higher by 2.5% compared to the previous month but still lower by 2.8% from the median price of $1,050,000 at year-end. Condo prices in January were around $502,500, showing a small decrease of 1.5% compared to the previous month and a 1.2% drop from the year-end median of $508,500. Looking at the bigger picture, single-family home prices grew by 5.3% when we compare year to year, while condo prices had a modest increase of 1.5%.
Properties stayed on the market slightly longer than they did a year ago but still moved into escrow in less than a month. Both markets marked median days on market of 29 days, compared to 24 days in January 2023.
In both housing markets, there's a notable increase in new listings. Single-family home listings saw a growth of 6.3% compared to the previous year, with a total of 285 new properties hitting the market for sale. Meanwhile, sellers introduced 581 new condo listings, marking an impressive 11.1% year-over-year increase.
As January drew to a close, the momentum continued with active inventory levels experiencing significant upticks. Single-family home inventory rose by 10.2%, while condos saw an even more substantial increase of 12.7% year-over-year. Despite this positive trend, it's essential to note that when compared to pre-pandemic levels in January 2020, active inventory remains down by a significant 25%.
The surge in sales volume for single-family homes across all price points, particularly in the $1,300,000 and higher range, can be attributed to the strong demand for luxury properties in desirable areas such as Kailua, Diamond Head, Metro, and Hawaii Kai regions. These regions offer attractive amenities, scenic views, and proximity to urban centers, making them highly sought-after by affluent buyers.
In January 2024, sales in the $1.3 million and higher range surged by an impressive 113.3%, indicating a significant uptick in demand. On the other hand, condos in the more affordable price range of $300,000 to $499,999 experienced a surge in sales volume. This increase in sales can be attributed to factors such as affordability, especially for first-time homebuyers or investors seeking entry-level properties. The attractiveness of these condos in terms of price and location might have driven up demand, resulting in higher sales volume within this price bracket.
Conversely, sales in the outer price bands of $199,999 and below and $900,000 and above witnessed significant declines, at 52.4% and 33.3%, respectively. This decline could be due to various factors such as limited inventory, shifting buyer preferences, or economic uncertainties impacting purchasing decisions in these specific price segments.
Notable declines in contract signings have been observed, particularly evident in the $800,000 to $999,999 range for single-family homes, where pending sales dropped from 84 to 56 compared to the previous year, marking a significant decrease of 33.3%. Similarly, in the upper price tier of $1,200,000 and above, there were 92 pending sales, indicating a 16.4% drop.
These declines may be attributed to affordability constraints as home prices continue to escalate. Potential buyers may find it increasingly difficult to meet stringent mortgage qualifications or afford higher down payments, thereby dampening demand and leading to fewer contract signings.
Conversely, the condo market experienced a 14.7% year-over-year decrease in contract signings within the $200,000 to $399,999 range. Factors contributing to this decline could include limited inventory, affordability concerns, or shifts in buyer preferences.
However, amidst these declines, there are pockets of resilience. The $400,000 to $599,999 price range witnessed a moderate 8.4% increase in contract signings for condos, indicating a stronger demand or more favorable market conditions within this segment. This could be attributed to factors such as relative affordability compared to higher-priced condos and increased inventory availability.
In terms of pricing trends, the year-over-year data reveals that while transactions closing above the original asking price remained consistent for single-family homes, there was a decrease for condos. In January 2024, 23% of single-family sales closed above asking, slightly lower than the 25% recorded in January 2023. Conversely, approximately 17% of condo sales closed above asking, down from 21% in the previous year.
In January 2024, the total sales for single-family homes were 184, marking an increase of 22.7% from the 150 sales recorded in January 2023. Additionally, the median prices for these single-family homes witnessed an increase of 5.3% compared to the previous year. Condos also experienced an increase of 6.2% in sales, with 292 closed sales in January 2024 as opposed to 275 in January 2023. Condos also saw an increase of 1.5% in median sales price in January 2024.
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