Prices of homes steady as sales drop

Oahu houses are also staying on the market longer, statistics show

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Oahu home sales took a nearly 30 percent plunge in May, according to the latest numbers from the Honolulu Board of Realtors, signifying a serious slowdown in the residential real estate market.

Only 252 existing homes were sold on the market last month, compared with 357 a year ago.

The median home price, meanwhile, held steady, at $649,500, which was just a $500 drop from a year earlier, when it was $650,000.

Demand from buyers continues to decline, according to real estate agents, while inventory continues to climb. Some agents attribute home buyer hesitancy at high prices and the psychological impact of high gasoline prices.

Dana Chandler, president of the Board of Realtors, however, calls the market stable for both buyers and sellers, with no signs of weaker prices -- yet.

Board economist Harvey Shapiro, while acknowledging a reduced demand for housing and growing days on the market, said Honolulu home prices still held up well when compared with the mainland.

Condominium sales also took a nearly 30 percent dive, with only 382 existing condos changing hands in May, compared with 543 a year ago.

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Oahu home prices held steady but took a nearly 30 percent plunge in the number of sales in May, according to statistics released yesterday by the Honolulu Board of Realtors. Only 252 homes were sold last month, compared with 357 in May 2007.

Home sales The number of homes sold on Oahu in May with the median price and percentage change from the same month last year: Homes Sales May 2008 252 May 2007 357 Change -29.4% Median price May 2008 $649,500 May 2007 $650,000 Change -0.1% Condos Sales May 2008 382 May 2007 543 Change -29.7% Median price May 2008 $337,300 May 2007 $325,000 Change +3.8% Source: Honolulu Board of Realtors

The median home price, meanwhile, held steady, dipping by $500 to $649,500 in May compared with the same month last year. It did edge up slightly over the median home price of $639,000 recorded in April.

"We continue to have a decline in buying demand for residential properties in the Oahu housing market, but the median prices have been holding up remarkably well," said Dana Chandler, president of the board. "The inventory of homes and condominiums available for sales has been rising, and while this could lead to weaker prices, it hasn't occurred yet. This continues to be a stable environment for both buyers and sellers."

Condominium median prices, meanwhile, rose to $337,300, a 3.8 percent increase from the same month a year ago. Those prices also edged up when compared with the median condo price in April, at $327,000.

Condo sales, however, also took a nearly 30 percent dive to 382 in May.

Board economist Harvey Shapiro said May sales figures show a reduced demand for housing, as well as more days on the market.

Single-family homes required a median of 52 days to sell, while condos typically took a median of 41 days, both increases from last year's 42 days and 38 days, respectively.

"On the positive side, the median prices paid during May still held within a narrow range from last year, contrasting with the many reports of significant price drops in cities on the mainland," Shapiro said.

Compared with Las Vegas, for instance, which saw a 25 percent decline in prices over the year, he said Honolulu prices were holding up well.

Sales declined throughout Oahu, however, according to Shapiro -- from 21.6 percent on the Leeward side to 31.1 percent on the Windward side (not counting the North Shore).

It appears that buyers were either going for affordability on the Leeward side or a short commute to town by buying in Honolulu.

The highest number of homes sold were in the Ewa Plain, with 36 having changed hands in May at a median price of $472,500, followed by Honolulu, where 24 homes were sold for a median of $849,500.

Shapiro said the median prices for these neighborhoods always can be skewed by a particular property, especially when broken down into smaller markets.

The lowest number of home sales occurred on the North Shore, where real estate agents sold only two for the month of May at a median price of $572,500, followed by Wahiawa, where only seven homes changed hands for a median price of $665,000.

"Clearly the economic signals we're getting are pretty negative, with high gas costs and food costs," Shapiro said. "It's hard to say what the impact will be to the housing market. We're hoping it's short term and that it will get better in the second half of the year."

Jerry Bangerter of Re/Max Kai Lani said he can definitely feel the slowdown in the market. He says it is driven by two circumstances: sellers who think that prices should still be going up and buyers who expect prices to be going down.

"People that are selling think it's still two years ago and that prices should still be going up," Bangerter said. "There's a market there for them if they reduce their prices just a shade."

While it is a buyer's market, Bangerter said higher gas prices can have a psychological impact on home buyers, causing them to hold back.

A total of 1,181 single-family homes were sold in the first five months of 2008, 24.5 percent less than last year. A total of 1,803 condos were sold in the same period, 25.8 percent less than last year.

Total dollar sales volume for the first five months of this year came in at $1.67 billion, a 22.8 percent drop compared with a year ago.