In May 2023, the real estate market in Oahu demonstrated positive growth in sales volume for single-family homes and condos, although there was a decrease in volume compared to last year. This presents a favorable situation for buyers, who now have more opportunities to discover better deals. The peak of the market was during the summer of 2022 when there was a significant influx of buyers capitalizing on the lower interest rates as the Federal Reserve rapidly increased rates. During that time, inventory reached an all-time low, resulting in high demand and less than two weeks' worth of available properties. Consequently, May 2022 became one of the most expensive periods in the history of Hawaii's real estate.
In May 2023, the sale prices of Hawaii real estate continue to remain robust and are still rising in most areas of the island. The most substantial increase in median sale price is observed in the more affordable regions, such as Aiea. This trend reflects a reduction in the purchasing power of many buyers who rely on mortgages.
Currently, the market offers an excellent environment for cash buyers interested in luxury and vacation properties priced between 1.5 million and 2.5 million. Cash investors have opportunities to benefit from the slowdown in the multi-unit market and the extensive inventory of buildings with below-market rents.
For markets situated near military bases like Kaneohe, Mililani, and Pearl City, terms and prices can be negotiated as the Permanent Change of Station (PCS) season brings much-needed inventory and a strong desire to sell quickly. VA loan assumptions remain a popular option for buyers, although finding a seller willing to undergo a significantly longer escrow period may be necessary.
May 2022 vs May 2023
Market Overview
In May 2023, the real estate market in Oahu exhibited various interesting trends. The sales volume of single-family homes and condos showed positive growth on a monthly basis, with single-family homes experiencing a significant rise of 26.0% and condos seeing a more modest increase of 4.3%. However, when compared to the same time last year, closed sales for both single-family homes and condos decreased, with single-family homes witnessing a decline of 23.8% and condos experiencing a larger decrease of 36.3%.
The Oahu real estate market in May showed signs of increased activity with improved sales volume for homes. However, compared to the same period last year, there were significant changes. Prices experienced a slight decline, and the number of closed sales decreased for both single-family homes and condos.
These shifts in the market create a favorable situation for buyers. With slightly lower prices and a decrease in closed sales, buyers may have more opportunities and negotiating power in their favor. It's a market where buyers can potentially find better deals and make more informed decisions.
Longer Time on Market but Higher Percentage of Full Asking Price Sales
In May, homes in the market took longer to sell, spending an average of 21 days before being sold. This was twice as long as the previous year, indicating a slower pace of sales. However, despite the increased time on the market, a higher number of homes closed at the full asking price or even higher compared to the past seven months.
It is important to note that although more homes achieved the full asking price or more, the percentage was lower compared to the previous year. Approximately 45% of sales in May received the full asking price or more, whereas around 75% of sales in May 2022 achieved the same result.
Despite buyers having increased bargaining power due to the extended time on the market and a larger inventory to choose from, it is important to recognize that the Oahu real estate market still favors sellers. The higher number of homes closing at the full asking price or above demonstrates the continued demand and competitiveness in the market. Sellers can still benefit from favorable conditions while buyers navigate an environment that offers them more options and potential negotiation opportunities.
Thriving Real Estate Market Anticipated This Summer on Oahu
This summer on Oahu promises to be a bustling season with a multitude of relocation activities taking place. The island is experiencing a notable surge in both local residents moving within the area and individuals coming from or heading to other parts of the country. Furthermore, there's a positive trend emerging as international travel gradually resumes, bringing back a welcome influx of visitors to Oahu.
However, what truly sets this season apart is the PCS (Permanent Change of Station) season for our esteemed military personnel. With military members undergoing transfers and reassignments, there will be a significant presence of this dedicated demographic actively engaging in the local housing market. It's a time when the purchase and sale of properties on Oahu are expected to see heightened activity, presenting an opportunity for the real estate sector to thrive.
Neighborhood Statistics
Currently, the Oahu real estate market is experiencing a decline in home sales compared to previous years. However, as we enter the summer months, traditionally a time of increased sales and prices, potential buyers can anticipate a more favorable environment with reduced competition and a wider selection of homes in neighborhoods where inventory levels are higher.
On the other hand, sellers in these areas will need to adopt a strategic approach to attract potential buyers successfully. Pricing their properties appropriately becomes crucial in order to stand out amidst the increased choices available to buyers. Setting a competitive and enticing price that aligns with the market conditions will enhance the chances of generating interest and securing a sale.
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.
