Oahu property sales continue drop in July
Oahu condos in July hit a record median price of $335,000
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While residential real estate sales continued dropping in July, inventory remained low, demand stayed strong and values held.
Low inventory, especially in popular markets like East, Metro and Windward Oahu, gave sellers a bit of an edge last month and increased the pace of sales as buyers coped with a relatively narrow selection. Still, rising interest rates and prices forced sellers to remain reasonable in view of a continually declining pool of qualified buyers.
A drop in July sales brought the total single-family home sales on Oahu to 2,241 for the first seven months of 2007, a decrease of 6.5 percent over the same period a year ago. Total condominium sales through July were 3,435, a 14.4 percent decrease from last year.
However, prices remained strong. Year-to-date median prices paid for Oahu properties in the first seven months this year were $645,000 and $325,000, respectively, increases of 1.6 percent and 4.8 percent, respectively, over the 2006 prices of $635,000 and $310,000.
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Residential real estate sales continued declining last month, but prices held in most neighborhoods and demand remained strong as evidenced by the record setting pace of sales.
Sales of single-family homes and condominiums sped up in July with the days-on-market indicators setting record paces for 2007, according to statistics released yesterday by the Honolulu Board of Realtors.
"The sales pace quickened in July, even though fewer sales were recorded for the month," said Berton Hama-moto, president of the Honolulu Board of Realtors.
The average days on market for single-family homes dropped to 37 days, the fastest this year and almost a week faster than last year, Hamamoto said. The average days on market for condominiums were just 35 days, also the speediest of 2007 and three days faster than a year ago, he said.
"It's a very interesting market and one that is quite unique in the history of Hawaii," said Chason Ishii, president of Coldwell Banker Pacific Properties. "You would think that if the market is slowing down that listings would build -- but that hasn't been the case. Buyers don't have the kind of selection that they would hope for, so right now if a new listing comes onto the market that is priced well at market value, it will move quickly."
During July, single-family home sales dropped to 339, a 10.6 percent decline from the prior year. Condominium sales also experienced an 8.2 percent year-over-year drop to 457 sales.
"We just aren't seeing the number of new listings coming onto the market as we should be," Ishii said. "It appears that sellers might be wondering if they would be able to sustain the prices that they are looking for, but actually it's a good market for sellers who have properties that are priced appropriately for the market."
In July, condominiums on Oahu set another record with the median price escalating 0.3 percent to $335,000.
"Condominium prices have been steadily increasing since last October when the median was $310,000," said Harvey Shapiro, research economist at the Board of Realtors.
Single-family homes, on the other hand, fell 3 percent to $640,000 as rising prices and interest rates caused some buyers to turn to condominiums or to single-family homes in the more affordable Leeward Oahu area.
Fifty-five percent of single-family home sales this month were in the more affordable Leeward Oahu area, compared to 44 percent last month, which could explain some of the variances in median prices, Shapiro said.
Rising finance costs also have begun to skew affordability in Oahu's market, which has seen the total dollar-sales volume generated in the housing market for the first seven months of the year drop 7.2 percent to $3.075 billion, a decrease of $238 million, compared to the $3.313 billion produced one year ago.
"A 30-year fixed rate mortgage today is about 6.25 percent, about a half-percent higher than at the beginning of the year," Shapiro said.