Home sales drop but prices edge up
Oahu's median price gain shows market fundamentals still strong
The pace of home sales last month continued its sharp descent in Oahu markets, but monthly median prices for single-family homes and condos rose to their third highest level of the year.
"It's still a good strong fundamental market out there, and that's helping support this continued healthy price gain," said Scott Higashi, vice president of sales for Prudential Locations LLC.
The number of single-family home sales declined 28.2 percent in October from the same month last year, with 296 homes changing hands, according to Honolulu Board of Realtors data released yesterday. At the same time, only 425 condominium units sold in October, a 31.9 percent drop from the year-ago month's 624 units.
But when it came to home prices last month, euphoria was back, as more buyers who had been watching the game decided to ante up before the stakes got any higher.
More than half of Oahu single-family home buyers paid $645,000 or more last month. That's a 4 percent increase from both a month ago and a year ago.
While the median condominium sales price dropped to $310,000 from September's $320,000, it was up 6.9 percent from the year-ago $290,000 median.
"The buyers who have been waiting are starting to realize that there are lots of choices, and interest rates remain very low compared to historical perspectives," Higashi said.
Prices will continue to increase slowly in the single digits, Higashi said.
However, he expects the market to remain flat in neighborhoods where prices had risen sharply in the past or that have the largest number of homes up for sale.
The current market also offers buyers far more negotiating power than they've had in the past, said Lehua Rosa Malott, a homeownership counselor at the Hawaii HomeOwnership Center, which helps homebuyers navigate Oahu's pricey residential real estate market.
"Three months ago, I wouldn't have talked about sellers' credits," said Rosa Malott, whose own home has been on the market for more than 110 days.
"Now, I'll drop my price and I'll even carry the boxes," she said. However, she also said she feels sure she'll make a reasonable profit on her investment.
Although Oahu housing statistics indicate a change in sales and total volume from a record 2005, consumers continue to pay higher prices, said Harvey Shapiro, research economist at the Board of Realtor.
For the first 10 months of 2006, sales volume was off 13.6 percent for single-family homes and down 19.5 percent for condominiums, while median prices were up 9 percent for single-family homes and 19.2 percent for condominiums.
However, overall sales at nearly $4.7 billion were down 7.9 percent as compared to the nearly $5.1 billion generated during the same period in 2005.