Oahu Market Report May 2024
The Federal Reserve was expected to lower interest rates, but they pulled back. As a result, rates have slightly increased and are now around 7%. This change is important to keep in mind as it affects overall affordability and mortgage payments.
Last month, the market showed some mixed results. Sales of single-family homes dropped by 5.0% compared to last year and the previous month. In contrast, condo sales saw a strong rise, increasing by 9.1% year-over-year and 10.9% from the previous month.
As for prices, the median sales price for single-family homes was $1,085,000 in May, reflecting a 2.2% decrease from May 2023. Condos had a median price of $495,000, a slight dip of 2% year-over-year. However, there is a silver lining. When looking at the year-to-date figures, median prices for both single-family homes and condos have seen modest increases of 2.4% and 1.0%, respectively.
Buyers in the single-family home segment acted swiftly, with properties spending a median of 14 days on the market—selling a week faster than the previous year. Conversely, condos took slightly longer to sell compared to last year, though they saw quicker sales on a month-over-month basis, with a median of 25 days in May.
These trends present both opportunities and cautionary notes for the market. The increased demand for condos signifies an opportunity for developers and investors to capitalize on the growing preference for affordable housing options. However, the decline in single-family home sales and prices suggests a need for caution, as it may indicate potential challenges in affordability or shifting buyer preferences.
In May 2024, the affordability of the real estate market in OÊ»ahu saw significant movement, particularly in the lower price ranges. Single-family homes priced at $899,999 and below made up 28% of total sales. Buyers in this price range purchased properties across various regions, including Leeward, ‘Ewa neighborhoods, Central OÊ»ahu, Pearl City, Kaneohe, and Metro Honolulu. This distribution offers buyers an opportunity to access more affordable housing options across diverse locations, making homeownership feasible in multiple attractive neighborhoods. However, sellers in this price segment may face heightened competition and pressure to price their homes competitively to attract buyers.
Conversely, condo sales in the $300,000 to $399,999 range rose by 43.6%, totaling 89 units and making up the largest share of sales at 18.7%. This surge contributed to a lower median sales price for condos in May. Another factor was the increased sales of smaller units, particularly studios and one-bedroom condos, which also drove down the median price. For buyers, particularly those looking for more budget-friendly options, this price range offers numerous choices, especially as the lower median sales price for condos in May suggests greater affordability.
On the seller's side, the increased sales volume and demand in this segment imply a potentially quicker turnaround and an opportune moment to list properties. However, it also calls for wariness, as the high demand for these units might intensify competition among sellers.
In May 2024, the real estate market on Oahu displayed significant trends that present both opportunities and considerations for buyers and sellers. The number of new single-family home listings increased by 11.7%, totaling 345, while condo listings saw a 13.1% rise, reaching 658. This uptick in inventory provides a broader selection for potential buyers, especially in the condo market where the $300,000 to $599,999 price range accounted for the largest share of new listings at 45%, or 296 units. Sellers, particularly those with properties in higher price brackets, might find this an opportune time to list their homes, as single-family homes priced at $1,400,000 and above saw a notable 39.6% increase in new listings year over year .
Active inventory has also been on the rise, with a 3.6% month-over-month increase for single-family homes and a 4.8% increase for condos. Year-over-year, the inventory of single-family homes grew by 17.9%, while condo inventory surged by an impressive 47.7%. The increase in active inventory could lead to more competitive pricing, providing potential buyers with greater leverage in negotiations. For sellers, particularly those with single-family homes priced at $899,999 and below, which represented 24% of active listings (a 16% increase), it may be crucial to adjust pricing strategies to attract buyers in a more saturated market.
Single-family home contract signings remained relatively stable, concluding the month with 260 pending sales, only a slight increase from the previous year. This stability suggests a consistent demand for single-family homes, which presents a more stable but competitive market environment.
In contrast, condo signings experienced a significant slump, dropping by 16.8% year-over-year, with May ending at 422 pending sales. This decline highlights a potential concern for sellers in the condo market. For buyers, this may present an opportunity to negotiate better deals or find more favorable pricing, particularly in a market with increased inventory and less competition.
In May 2024, the total sales for single-family homes were 249, marking a decrease of 5% from the 262 sales recorded in May 2023. Additionally, the median prices for these single-family homes witnessed a decrease of 2.2% compared to the previous year.
Condos also experienced an increase of 9.1% in sales, with 478 closed sales in May 2024 as from 438 in May 2023. Condos also saw a decrease of 2% in median sales price in May 2024.
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