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Buyer Optimism Up, Despite Rising Prices
Condo sales are up 19.5% in August — an indicator that condos and townhouses remain an attractive alternative to single-family homes for homebuyers desiring a more affordable price point.
While prices continue to rise, the recent easing of loan requirements offers new encouragement to prospective buyers who feel like they may have missed the boat.
“Many lenders have recently announced that recent changes have been made to loan underwriting criteria, which may allow buyers to qualify for a higher loan amount,” says Kalama Kim, principal broker at Coldwell Banker Pacific Properties. “Low mortgage interest rates, along with the relaxation of lending criteria, allows buyers to qualify for home loans they are comfortable with, and otherwise, may not have met the financial requirements for.”
Market indicators continue to point to a strong housing market for Oahu. Days on the market stats — the length of time from listing to escrow — remain low as sales occur with lightening speed. Inventory fell again in August, as compared to this time last year. And pending sales are up 30 percent from figures released by the Honolulu Board of Realtors a year ago. These market conditions are a sure indicator the prevailing buying frenzy will likely continue at least for the next 30 to 60 days.
The number of transactions closed in August is the headline news this month. Condominium sales nudged the record high, established in August 2006 (when 580 condos closed) with 575 sales closed last month, up 19.5% from August 2016. That’s also the highest number of closings for any given month in 11 years (the record high — 831 condo closings in one month — took place in August 2005).
Single-family homes sales volume was up 5.2% — 362 homes closed last month, up from 344 during the same time period a year ago. While not a record, the closings show activity remains robust in both segments of the market.
Record-territory sales volume has, in turn, affected pending sales statistics. Currently 602 holdover single-family transactions are waiting to close — up a significant 30.3% from a year ago. And 850 such condo sales are currently in escrow, up 29.8% from a year ago, as well as a two-year high.
In August 2017, the median price for a single-family home was $786,250. While this ranks second in the all-time high MSPs for this category, it is noteworthy that SF homes sales prices only topped the $700,000 mark in 2015. This month’s stat comes in 5.2% higher that the MSP in August 2016.
Condo prices, too, continue to rise. For August, the median sales price for condominiums was $419,000, a gain of 5.3% from last year, when the MSP was $398,000.
It’s also worth noting that the percentage of original list price received, as reported by HBR, was 99.1% for single-family homes, and 98.3% for condos.
“Sellers are being more aggressive with their list prices, knowing that the market is strong,” says Kim. “To this point, buyers are still willing to pay that price or something close to it.”
With homes selling quickly and offers often subject to bidding wars, this month’s hottest markets are those neighborhoods where the percentage of sales-price-to-original-price received by the seller is consistently 100% or more, according to the latest year-to-date stats.
NOTE: The price range where the seller received the highest percentage of original list price received was $550,001 to $650,000 — sellers in that price range received 99.7% of their asking price. The sellers receiving the lowest list-to-sales price ratio were in the $1.9 million and higher category.
Single-family home neighborhood best performers:
Aina Haina – Kuliouou: 100.8%
Kalihi – Palama:107.0%
Condo neighborhood best performers:
Kailua – Waimanalo:100.2%
Source: Honolulu Board of REALTORS®, compiled from MLS data. August 2017