A massive shift in leverage has occurred over the last six months and that leverage applied downward pressure on sellers’ list prices. According to the Honolulu Board of REALTORS® Monthly Statistical Report, last month home sellers sold for 96.7% of their list price, while condo sellers sold for 98.5% of the sellers' list price. That’s a far cry from the 102% buyers had to pay just 6 months (100% for condos) ago.
The shift was a result of more choices for buyers to choose from, less competition between buyers for properties, and additional time to make their decisions. In fact, days on market last month jumped by 127% for homes and 63% for condos. It took 25 days for home sellers and 21 days for condo sellers to accept an offer for the homes that sold last month. Additionally, the number of homes for sale rose by 93% for homes and 23% for condos.
The good news for sellers is that those numbers barely affected overall home prices as the median sales price and the average sales prices saw very little movement. The median price for homes that sold last month was $1,045,000, which is a 0.5% drop compared to the same month last year, while the average price actually rose by 1.7%.
The median price for condos increased by 3.6% to $502,500 while the average sale prices dropped by 4.6%. Why didn’t prices go down? More than likely, we are still experiencing a lack of housing overall on the island of O'ahu, which stabilizes home prices and keeps them at high price levels. According to the Department of Economic Business Development and Tourism (DBEDT), we are on track for a shortage of 46,000 housing units by 2030.
“What will happen in the next few months,” is a common question we hear from our clients. In this case, we look at short-term indicators to provide insights into potential future trends. For example, 'Inventory In Escrow' is down compared to last year by 47% for condos and 45% for condos. Since escrows typically take 45-60 days to close, these figures provide us with short-term predictions for the market.
Read the full report from the Honolulu Board of REALTORS® here.