If you haven’t been paying attention, the Oahu real estate market continues to climb higher and higher. While most even passive observers may not be surprised at the trend, some feel that an inevitable flattening out or even market downturn may be coming in the not too distant future.
Nevertheless, December’s monthly report from the Honolulu Board of Realtors showed median sales prices of $690,000 and $361,250 for single family homes and condos, respectively (and a record price for condos). Those are rather gaudy numbers for those who have been watching. Average days on market were only 23 for single family homes and 22 for condos — a further indication of a tight market with sought after inventory. For those looking to sell, these are encouraging signs.
In the meantime, Honolulu County homeowners are reaping the benefit of increasing equity in their homes. More equity means fewer upside down mortgages and, therefore, fewer homeowners needing short sales or loan modifications. Those who do need to sell their home to avoid foreclosure are in a greater position to sell it normally, either on the traditional market or to an investor, as opposed to requiring debt write-offs or bank negotiations. A healthy local market has few such distressed properties, although there will always be some inventory that fits into this category.
It is generally expected that the Oahu market will pierce $700,000 and stay there once and for all in the very near future, possibly even by February or March 2015. This is the new reality. Some experts even expect the median county home price to be near $800,000 by year’s end, a figure once thought completely unrealistic and unobtainable, even for Hawaii.
With interest rates still near all-time lows, inventory tight and the likelihood of a market that’s not slowing down, buyers on the fence are feeling the pressure to make a move now or be priced out for the foreseeable future.