Housing market
could be cooling

Oahu’s single-family home sales
are down, and costs may be next

Oahu's white-hot real estate market finally contained a glimmer of good news for home buyers last month.

Though it's too early to tell whether the market's high-water mark has already been reached, key indicators of sales activity softened nearly across the board in August as the market's long and stunning run-up took a breather.

A total of 410 single-family homes changed hands last month, the first month-on-month decline since February and the first significant year-on-year dip since April 2003, according to figures from the Honolulu Board of Realtors.

The August sales figure was 3.5 percent lower than the 425 homes sold the previous August.

"That's real significant. It's a real sign that we're taking some of the edge off the pace of the market," said Scott Bradley, co-managing director of Coldwell Banker Pacific Properties.

Other August indicators such as housing inventory and the amount of time properties spent on the market turned in buyers' favor. Those figures had been key factors fueling housing costs, as competing buyers anxiously bid prices up.

Home prices appeared to reflect the more relaxed playing field. Prices of single-family homes dipped on a month-to-month basis to $450,000 from the $480,000 reached in July, though they remain 14 percent higher than a year earlier.

Sales remained sturdy in the condominium market, which has gained pace this summer as high home prices forced buyers to lower their sights.

There were 728 condos sold in August, up 12.7 percent from a year earlier. Median prices ticked 4.2 percent lower on a month-to-month basis to $207,800 from July's $217,000, though they remain 15.8 percent higher than August 2003.

If August's numbers prove to be a trend in the making, that could force sellers to start meeting buyers halfway.

Stefan Cipres has already gotten a hint of this. His three-bedroom, three-bath home on Kaneohe Bay home has languished on the market all summer, and he recently dropped his price 5 percent to $1.08 million. Still no offers.

He's considering cutting the price even further.

"I'm not sure what's going on, but I guess people are just on the sidelines now and waiting for something better to come along," he said.

More people opted to stay on the sidelines in August. The board said the average number of days on the market increased, though it did not specify a figure for days on the market for either homes or condominiums.

But that figure could not have gone much lower after hitting an average of just 17 days for single-family homes and 16 days for condos in July.

The number of homes on the market has been trending higher in recent months -- after bottoming out in May at 784 single-family homes and 1,034 condos -- as a growing number of homeowners have tried to cash in on high prices out of fear the market might soon run out of steam.

Inventory remains extremely tight, but there was more selection last month, with 1,179 homes and 1,658 condos available, compared with 1,141 and 1,604 in July.

Coldwell Banker's Bradley said that if the current pace of inventory growth continues, there will be twice as many homes available on the market by the end of this year.

But he warned not to read too much into the August numbers, saying Coldwell Banker projects continued price growth through the end of the year.

"I don't think one could say the market is down based on one month's statistics," he said.