Median condo prices hit new high
Real estate sales on Oahu are slowing, however, including single-family homes
Oahu condominium prices hit a record median of $329,000 in July even as real estate sales continued to slump amid higher mortgage rates.
Single-family homes, meanwhile, sold at a median of $660,000, just below the market's May peak of $668,300, according to figures released yesterday by the Honolulu Board of Realtors.
During July, single-family home sales declined 9.3 percent to 379, but a larger drop -- 27.2 percent -- was experienced by the condominium market, which recorded 498 sales in the month.
Year-to-date sales volume is down 8.5 percent for single-family homes and 12.8 percent for condominiums compared with last year. However, median prices have maintained a respectable rise in both the single-family home and condo markets.
"The pace of residential sales continues to ease, and median prices are being maintained," said Mary Flood, president of the Honolulu Board of Realtors.
Honolulu's decline in sales volume is not a harbinger of doom for the marketplace, said Scott Higashi, vice president of sales for Prudential Locations LLC.
"Overall we detect no inherent weakness in the market," Higashi said. "The transaction volume is what we expected, and prices are continuing to move up. We aren't losing any ground in the marketplace."
The year-to-date median for single-family homes, $635,000, is an increase of 12.5 percent over the first seven months of 2005. Through July the median price for a condominium was $310,000, a solid year-over-year increase of 24 percent.
"We felt about a year ago that condo prices were unusually low in terms of median prices, and we're seeing that market catching up with itself," Higashi said.
But the drop in sales has caused the total dollar volume of Oahu home sales to stay relatively flat. Through the first seven months of this year, total sales rose 1.6 percent to $3.31 billion from the year-earlier $3.26 billion.
The Oahu housing market is seeing a pattern of higher pricing with fewer sales, said Harvey Shapiro, research economist for the board of Realtors.
"Median prices in Waikiki were much stronger, showing a 26.5 percent increase from a year ago to $322,500. However, condominium sales were down in most island neighborhoods, particularly in our most populated area, Waikiki, where the number of sales were just half of last year's figure," Shapiro said.
As Honolulu's prices have continued to rise along with mortgage rates, real estate agents and sellers have noted that it has become more difficult for buyers to qualify for loans, said John Riggins, owner of John Riggins Real Estate.
"People are looking at townhouses and condos, but we're also seeing lots of people sitting on the sidelines thinking that prices will drop," Riggins said.
Hawaii lenders and owners are trying to jump-start the market by offering strong loan packages and incentives, he said.
"America is officially into a buyer's market, so (there is) no reason to sit on the sidelines and wait for a price drop," Riggins said. "Just like home builders are offering incentives, more and more sellers are offering incentives such as holding the note, paying down the interest rate or assisting with closing."