Home prices on Oahu surge closer to $1 million median

Oahu’s housing market had another breakout month in March with a record $950,000 single-family home median sale price and an eye-popping number of condominium sales.

The median price last month represented a 17% jump from $810,000 a year earlier and was the third record set in as many months, according to Honolulu Board of Realtors data released Tuesday.

This year started with a record median sale price of $883,000 in January, followed by $917,500 in February. Now the $1 million mark doesn’t seem far off.

“It’s nuts,” said Ali Ban, a broker-in-charge at Redfin Corp. in Hawaii.

Ban said she represented a buyer last month who competed with seven others bidding on one home and that her husband, also a Redfin broker, represented a client on one property that attracted 44 offers.

“I’m just surprised at how many offers there are,” she said. “It’s a crazy market.”

Ban’s husband, Mike DeMello, said he wouldn’t be surprised if the single-family home median sale price hit $1 million later this year. But he also said it’s hard to tell whether the market has begun a new upward cycle because of unusual dynamics from the pandemic that include more people working from home and a moratorium on evicting renters who are behind on rent.

The Honolulu Board of Realtors said a sustained low level of homes listed for sale, in combination with high demand, nearly tripled the number of single-family homes and condos that sold this year through March for more than their asking price, compared with a year earlier.

“Despite new listings, demand continues to outpace our limited housing inventory,” Shannon Heaven, president of the trade association, said in a statement. “This lack of inventory is driving a very active and competitive market for prospective homebuyers on Oahu.”

The number of single-family home sales surged 19% to 361 last month from 303 a year earlier.

Condo sale volume soared 53% to 626 last month from 410 a year earlier. The last time there were more condo sales in a month was over a decade ago in June 2006 when 641 condos were sold.

The median condo sale price was $451,000 in March, up 4% from $435,000 in the same month last year.

Jason Lazzerini, president and CEO of local brokerage firm Locations, said in a report this week that the boom in condo sales was in part driven by incredibly low inventory of single-family homes and more entry-level homebuyers being edged out of the single-family home market because of high prices, strong competition and low inventory.

Inventory has been on a general downward path for more than a year, and last month there were 752 single-family homes listed for sale, compared with 1,227 a year earlier. The number of condo listings was 1,881 last month, down from 2,274 a year earlier.

If no new inventory got added to the market, it would take only 1.3 months to exhaust the single-family home supply, based on sales volume in March. The same figure for condos would be 2.9 months.

A range of six to 10 months is generally considered a balanced market where prices are not pushed up or pulled down by supply and demand.

Lazzerini noted that mortgage interest rates have been rising from near historic lows but have yet to tamp down buyer demand. The average 30-year fixed rate reached just over 3% last month, up from 2.65% in early January, according to Freddie Mac.

“We anticipate that home prices will to continue to climb as we head into late spring and early summer, pushed upward by strong buyer demand, extremely low inventory and highly competitive market conditions,” Lazzerini said in the report.