Market Snapshot
Welcome to your July 2023 Oahu Real Estate Market Update with your on-island real estate agent, Mike Hegazy. I trust that your summer is going well!
Interest rates for a 30-year fixed mortgage are currently around 7.62, in July it was closer to 7.14, while inflation is at about 2.97%, inching closer to the Federal Reserve's target of 2%. But how is this affecting the Oahu real estate market? Surprisingly, not much.
The median prices for both single-family homes and condos have experienced a modest decline when contrasted with the previous year. Single-family homes now hold a median price of $1,090,000, while condos stand at $500,000. Days properties spent on the market have extended by 5 days for single-family homes and 4 days for condos in comparison to the previous year.
We have an interesting twist. We're seeing fewer individuals deciding to sell their houses and condos. Why is this shift occurring? Well, many homeowners have noticed that the value of their properties has increased over time, meaning that what they own is now worth more than when they initially bought it. Additionally, these homeowners have managed to secure mortgages with very favorable terms, featuring low-interest rates. As a result of these factors, many homeowners are opting to keep hold of their properties instead of putting them on the market for sale.
Market Overview
The most recent report released by the Honolulu Board of REALTORS® highlights a decline in sales for both single-family homes and condominiums, primarily attributed to elevated borrowing costs, leading to a slowdown in summer buying activity. The data shows a notable decrease of 28.2% in single-family home sales and an 18.5% decrease in condo sales compared to the same period in the previous year.
Despite these shifts in sales activity, the median sales prices remained relatively steady when comparing year-over-year figures. The median price for single-family homes experienced a decline of 1.6%, reaching $1,090,000, whereas condos maintained their median price at $500,000.
July 2022 vs July 2023
Notably, properties that were sold in July exhibited a slightly extended time on the market, with single-family homes and condos taking around 16 days to sell.
Furthermore, there has been a decline in the number of single-family homes that were sold for prices above the initial asking amount. Specifically, only 53% of these homes managed to achieve this, representing a noticeable drop from the previous year's higher figure of 65%. Similar shifts have occurred in the condominium market, where merely 47% of sales managed to secure the full asking price or exceeded it, a decrease from the 60% recorded in July 2022.
It becomes evident that while there is a decrease in the proportion of single-family homes and condos selling at higher prices, sellers are still able to successfully sell their homes at the full asking price. In the case of single-family homes, sellers continue to achieve a 100% success rate in selling at the full asking price, consistent with the previous year's performance. However, the condo market has seen a slightly decreased success rate, with sellers achieving 98.8% of the full asking price compared to the perfect 100% achieved in the previous year.
Even though there has been a shift in the percentage of homes and condos selling above the asking price, sellers are still finding success in selling at the full asking price, indicating a degree of stability in the market's pricing dynamics.
Shifting Real Estate Trends: Homeowners Opting to Hold Onto Properties
The real estate market is undergoing changes in various aspects. One notable shift is the decline in new property listings, with single-family homes experiencing a year-over-year drop of 28.8%, while condos saw a decrease of 15.4%. This means that fewer people are choosing to put their houses and condos up for sale.
This shift in seller behavior can be attributed to several factors. One significant reason is the noticeable increase in property values over time. Homeowners have observed that the worth of their properties has risen since their initial purchase, indicating that what they own is now more valuable. Additionally, many of these homeowners have been able to secure mortgages with highly favorable terms, featuring low-interest rates. These favorable financial arrangements have contributed to the decision of many homeowners to retain ownership of their properties rather than listing them for sale. However, prospective homebuyers are comfortable with current interest rates and are looking to buy before prices rise further.
This trend has translated into fewer properties being listed for sale, thereby influencing the overall dynamics of the real estate market. As a result, the market is witnessing a unique interplay between homeowners' financial considerations and the supply of available properties.
Notable Developments in Pending Sales and Closed Transactions
Despite some weakening in the number of contracts being signed compared to the previous year, there's positive news to highlight from the Oahu market report for July 2023. Single-family homes experienced a promising increase of 6.9% in pending sales when compared to the previous month, and condos also saw a 1.4% rise in pending sales. This means that during July, there were 247 pending sales for single-family homes and 421 for condos. This movement suggests growing interest from both buyers and sellers, showing a level of activity that can contribute to a dynamic real estate environment.
However, it's important to keep in mind that even though these pending sales numbers are encouraging, some transactions might not proceed to completion due to changing circumstances, financing issues, or other factors. This is a normal aspect of the real estate process, and it's why the final closed sales numbers might differ from the initial pending sales figures.
Although there was a decline in closed sales from June 2023 to July 2023, the overall outlook remains positive. Specifically, closed sales for single-family homes decreased from 248 in June to 224 in July 2023, while condo closed sales dropped from 470 in June to 422 in July 2023. It's essential to note that real estate trends can exhibit month-to-month variations due to factors like market dynamics, economic circumstances, and buyer choices.
For potential buyers, this shifting landscape might mean that there could be opportunities to find homes at competitive prices or with favorable terms. For sellers, the active pending sales indicate that there's interest in the market, and even though some pending sales might not proceed, there's still a chance for successful transactions.
Neighborhood Statistics
In July 2023, the Oahu real estate market stayed stable and competitive due to strong demand. Notable areas like Ewa Plain, Waipahu, and Pearl City saw increased contract signings for single-family homes, growing by 18.5%, 18.8%, and 13.3% respectively. The Leeward region experienced a significant 92.3% surge in condo contract signings compared to the previous year. Condo pending sales in Ewa Plain remained unchanged year-over-year but rose by 38.2% from June to July. Single-family home prices also had a slight increase during the summer.
The local market statistics can vary significantly from one neighborhood to another, so it's crucial to keep that in mind. Please let me know if there are any queries you have regarding a particular neighborhood.
Should you have any Oahu real estate needs or inquiries, I am here to assist.
