Oahu Real Estate Market Outlook - November 2020: Signs of recovery and better things to come
When COVID-19 hit Hawaii in the first quarter of 2020, realtors, buyers, sellers and real estate-related business braced for a backlash. Was there an impact – yes, as might be expected. But there are clear signs that the worst might be behind us. Even in the midst of a pandemic, it doesn’t appear that Oahu is experiencing a cooling in its real estate market. While sales volumes and pricing, for both condos and single-family homes aren’t overheating, there is a perfect mix of buyer interest and seller enthusiasm.
Overall, the market saw a slight spike in new listings, from 1,051 in September to 1,128 in October this year. However, it wouldn’t be accurate to say Oahu’s housing lacks competitiveness. In fact, the number of condos and single-family homes selling above asking price has increased – showing that there is plenty of competition from buyers, though not as much inventory as the market would have liked. Part of the reason for this robustness may be attributable to the fact that more travelers are now moving to Oahu to view open houses and check what’s on sale there. And that, in and of itself, is a sign of a healthy market!
LET THE NUMBERS SPEAK
According to the Honolulu Board of Realtors, compared to the same period last year (Oct 2019), the median price of single-family homes in Oahu rose by nearly 11% last month (Oct 2020). With condominiums, however, the outlook wasn’t as rosy. Condo sales rose by just 1.7%, with median unit prices staying flat. The bright spot, however, is that condos experienced their first increase (albeit a relatively minor one!) since the beginning of the pandemic back in January 2020.
At a median price of $865,000, single-family homes experienced a healthy price increase in October 2020, compared to $780,000 last year (10.9% increase). On a month-over-month basis though, median single-family home prices experienced a slight down-tick from the $880,000 tag they commanded in Sept 2020 – that’s a 1.7% decline. October 2020 also saw slightly fewer (0.6%) single-family homes sold (345) compared to the same period last year (347).
The price tag of the median condominium was $439,500 in Oct 2020, which was around 0.3% less than what it was around the same time last year at $ 441.000 (Oct 2019). However, Oct 2020 saw 8 more units (for a total of 480) change hands than during last October (472).
The year-to-date numbers, for both single-family homes and condos highlight some interesting dynamics in Oahu’s real estate market. During the first 10-months of 2019, 3,121 single-family homes changed hands. That number was down slightly, by 1.3% (to 3,080) in the first 10-months of 2020. However, the median price of homes, on a year-to-date basis, rose in Oct 2020, from $785,000 to $818,500.
Year-to-date condo sales were slightly sluggish, with only 3,785 units moving in the first 10-months of 2020, compared to 4,546 from Jan 2019 to Oct 2019. That’s a 16.7% decline. At a median Oct 2020 price of $432,750, condo prices, however, saw a slight YTD increase of around 1.1% compared to $428,000 during the first 10-months of 2019.
SPOTTING THE TRENDS
On a y/y-basis, new single-family home listings were down by 17.6% in Oct 2020, but the bright spot was that they showed a slight up-tick – of 3.3% - on a m/m basis. The most significant trend shift was noticed in single-family homes priced in the $600,000 to $699,999 range. Compared to last year, this group of homes saw a 52.3% decline in new listings coupled with a unit sales decline of 56.8%.
Another trend shift was noted in single-family homes valued in the $800,000 to $1,199,999 price range. Their sales increased by 39.2%. When it comes to a sellers’ market, more than half of October 2020 sales (50%) in the $700,000 to $899,999 price range sold above the asking price.
Single-family Oahu homes put on sale spent an average of just 10-days on the market. That definitely bodes well for sellers looking to list their properties now!
There were some notable trends observed in the condominium sector too. Condos in the $500,000 to $599,999 price range saw an 18.5% uptick in new listings, with those priced in the $400,000 to $499,999 price range seeing a 30.23% surge in sales (112 units) compared to just 86 in the same period last year. More notably, an overwhelming 63% of condominiums listed in the $400,000 to $599,999 range changed hands above the asking price.
The median time that an average Oahu condo unit spent on the market was 18 days.
Overall, the ongoing pandemic crisis seems to barely made a dent in Oahu market, barely impacting it, if at all. The numbers speak for themselves, signaling that Oahu’s real estate market is not just resilient, but is primed for a brighter future.
Oahu housing market is definitely hot, and now’s the time get in – whether you’re buying or selling. And, the numbers don’t lie – they tell a story of a real estate sweet spot. How do we judge that? Well, the sign that a market is healthy and competitive is when sellers and buyers both walk away with what they want. Compared to last year, the doubling of single-family homes and nearly 64% of condos selling for above asking price tells a story of a robust market.
Experts believe that now is the best time for both sellers and buyers to jump into the market and get exactly what they’re looking for.
According to Tricia Nekota, president, Honolulu Board of Realtors®:
“A lack of inventory coupled with high demand from buyers looking to capitalize on historically low interest rates is driving a very competitive market for single-family homes on O‘ahu. This is an opportune time for sellers to list their properties as housing values continue to rise, and buyers are on the hunt for their forever homes,”
Clearly, while there’s demand out there from home buyers looking to move into a serene community like Oahu, there are also sellers looking to cash-in and move on. Hawaii offers excellent respite from the hustle and bustle of most parts of the world. Whether you’re looking for a peaceful retirement get-away, a vacation property or a permanent change in your home address, places like Oahu offer the perfect place to invest in.