Oahu home sales decline, although prices are holding

Prices manage to remain relatively stable as the Leeward side bears the brunt of the drop year-over-year

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Honolulu's real estate market continued to show signs of cooling, with home sales dropping 33 percent, and condo sales dropping 30 percent in August from last year.

Yet prices remained relatively stable last month due to less inventory coming online in the market.

More than half of single-family homebuyers paid $635,000 for a house in August, according to the Honolulu Board of Realtors, a 2.3 percent decline from the year-prior $650,000.

Buyers also paid a median price of $328,000 for a condo, up 0.9 percent from August 2007.

Single-family homes were on the market an average of 44 days in August, and condos an average of 38 days.

While this may pale in comparison to the peak of the market three years ago, when properties were moving in only two to three weeks, it shows a somewhat stable environment for buyers and sellers, said board President Dana Chandler.

Real estate agents said sales can be slow or brisk, depending on pricing and location. The most dramatic drop in sales for year-to-date in August was on the Leeward side.

The total dollar sales volume for the first eight months of 2008 was recorded at $2.67 billion, 25.2 percent lower than a year ago.

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Honolulu's cooling real estate market has gotten colder, with significant sales declines in both existing homes and condos on Oahu, according to the latest data released by the Honolulu Board of Realtors.

Home sales down The number of homes sold on Oahu in August with the median price and percentage change from the same month last year: Single-Family Home Sales August 2008 255 August 2007 381 Change -33.1% Median price August 2008 $635,000 August 2007 $650,000 Change -2.3% Condo sales August 2008 345 August 2007 495 Change: -30.3% Median price August 2008 $328,000 August 2007 $325,000 Change: 0.9% Source: Honolulu Board of Realtors

Home sales dropped 33 percent and condo sales dropped 30 percent in August compared with a year ago. Only 255 existing single-family homes were sold in August this year, compared with 381 in August 2007, despite a 2.3 percent drop of the median home price to $635,000.

A total of 345 condos changed hands in August compared with 495 a year ago. The median condo price, however, went up a scant 0.9 percent to $328,000 from $325,000 in August 2007.

Dana Chandler, president of the Board of Realtors, said residential sales during August show that the Oahu housing market continues to cool, but that the median prices paid for island properties are being maintained.

"Market time hovers in the rather speedy 40-day range, demonstrating that Oahu's market continues to provide a stable environment for buyers and sellers," said Chandler.

Single-family homes were on the market for an average of 46 days in August, said board economist Harvey Shapiro, and 48 days for condos. At the peak of the market in August 2005, homes were on the market an average of 21 days, and condos an average of 14 days.

For the first eight months of this year, however, total single-family home sales, at 1,919, have declined 26.8 percent from the same period a year ago. Total condo sales through August, at 2,868, declined 27 percent from last year.

Dollar sales volume for the first eight months of the year was recorded at $2.67 billion, 25.2 percent lower than $3.58 billion a year ago.

Another indicator of a contracting market is the smaller number of new listings coming into the market, said Shapiro.

This August, 514 single-family homes and 622 condos were added to the inventory, he said, significant declines from counts of 622 homes and 914 condos that were added in August 2007.

"Honestly, it doesn't look like we've hit bottom yet," Shapiro said. "We're still fortunate that our prices are holding, and it's probably because there aren't that many properties coming on the market."

By neighborhood breakdown, Makakilo on the Leeward side experienced a 49.1 percent drop in homes sold for the first eight months of this year, followed by Waipahu, which experienced a 39.8 percent drop in homes sold, year-to-date, for August.

Neighborhoods with the lowest drop in sales, year-to-date in August, were the Windward coast, which only experienced a 5.6 percent decline, and Aina Haina-Kuliouou, which recorded an 8.2 percent decline in home sales due to limited inventory.

Abe Lee of Abe Lee Realty said while the market is slowing down, sales will depend on whether a home is priced right in the right location.

Lee said he knows of a home in Nuuanu that recently went to open house with seven offers, most of them at higher than the $720,000 list price. The home went into escrow almost instantly.

Chason Ishii, president of Coldwell Banker Pacific Properties, said sales seemed to drop most dramatically for homes in the $500,00 to $750,000 range.

The "local family buyer," which at one time purchased homes in that price range as far as Makakilo, Mililani, and Hawaii Kai, is now seeking to find a home closer to town.

"When you start to get too far east or west, those are the areas where we're starting to see a lot more slowdown," said Ishii. "Those individuals want to move in closer because the gas prices and the commute is a real concern."

Sales in the high-end luxury market remain strong, said Ishii, with three sales last month at the $5 million and above level, which he called "quite remarkable."

Anita Bruhl, a Kahala specialist for Mary Worrall Associates Sotheby's International Realty, said average sold prices in the area are still more than $2 million, and holding steady.

"But they're taking longer to sell," said Bruhl. "A lot of buyers out there are taking their time, being very cautious and meticulous because they have more choices, and they're looking for deals."