Honolulu Housing Market Stabilizes

The Honolulu Advertiser reports that the Oahu housing market held steady again last month, as median prices for existing homes rose slightly on increased sales of single-family homes and fewer sales of condominiums.

February’s single-family home median resale price was $614,500, up $1,000 or 0.2 percent from February 2006, according to data released yesterday by the Honolulu Board of Realtors.

No question about it, Hawaii mortgage loans aren’t cheap. The median price, which means half the homes sold for more and half for less, on the island has hovered between $600,000 and $615,000 since November.

The record was $668,300 in May.

“The market’s just steady,” said Harvey Shapiro, research economist for the Honolulu Board of Realtors.

Condos sold for a median price of $320,000, up $5,000 or 1.6 percent in the same comparable period. As for the condo market, prices have floated between $305,000 and $320,000 since August, following a record $329,000 in July.

February saw somewhat of a surge in sales for single-family homes, rising 9.7 percent to 272, compared with 248 a year earlier. Last month’s volume also was higher than January’s 263 sales and 266 sales in February 2005.

But Shapiro stopped short of calling the recent Honolulu housing market activity a rebound.

“It’s definitely a positive sign,” he said. “But we’ll just have to see what the future shows.”

There were 402 condo sales recorded last month, down 17.5 percent from 487 a year earlier. The number of sales for condos and single-family homes last year was lower in most months vs. 2005, while median prices mostly rose — a trend that doesn’t appear to have changed yet.

“The residential sales market continues the trend of slower sales but higher prices,” Shapiro said.

The inventory of unsold single-family homes on the Hawaii housing market continued to shrink, while the backlog of condos grew slightly.

There were 1,717 single-family homes on the market in February, 30 fewer than in January and down from the recent peak of 2,052 in November. As demand for mortgage loans wanes, inventory had been on the rise since summer but was as low as about 800 in early 2005 and early 2004.

Condo inventory in February was 2,294, six more than January but lower than the peak of 2,750 in September. The recent low was around 900 last May.

Berton Hamamoto, president of Property Profiles Inc. and the Board of Realtors, said more sellers are taking their homes off the market, while fewer people may be putting homes on the market.

“The ones who had to sell already sold. It’s coming back to a balance between supply and demand,” he said.

It took a median of 70 days to sell single-family homes last month, up from 42 days a year earlier and 60 days in January. The median number of days homes spent on the market hasn’t been as high as 70 since 1999.

Condos spent a median 59 days on market before selling, up from 31 a year ago and 55 in January.

Isi Nau, a special education teacher and part-time mortgage broker, said he believes the market has settled after the immense run-up in prices over the past five years and yearlong slowing of sales.

Nau said that as housing affordability slipped, sellers who feared there was a bubble about to burst inflated supply in a panic while buyers held out for prices to fall. So far, neither has come to pass.

“The bubble hype has already begun to wear off. I believe that by mid-2007 we will see real estate here in Hawaii pick up again.”

Other brokers and some local economists anticipate that median prices this year should achieve a low single-digit percentage rise or decline on fewer sales.

SOURCE: Honolulu Advertiser