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Sales of existing single-family homes on Oahu in September suffered their biggest drop so far this year as rising mortgage rates and near-record prices amid high inflation and recession concerns deterred buyers.
The Honolulu Board of Realtors reported Thursday that resales of single-family houses dropped 34% in September to 278 from 424 in the same month in 2021.
September’s decline represented the eighth consecutive year-over-year decrease in monthly sales volume for single-family residences on the island and followed declines of 26% in August, 23% in July and 21% in June.
“As mortgage rates continue to rise and concerns around inflation and the economy mount, we’re continuing to see a slowdown in the Oahu real estate market,” John Connelley, principal broker for Hawaii residential real estate brokerage firm Locations, said Thursday in a company report.
Connelley also characterized what he described as moderation in the market as more of a return to typical market conditions than an indication of a falling housing market.
Median sale prices for single-family homes on Oahu haven’t shown signs of significant weakness this year.
In May this measure set a record at $1,153,500. September’s median sale price was $1,100,000, which represented a 5% gain from $1,050,000 in the same month in 2021.
For Oahu’s condominium market, sales volume declined 19% to 496 units in September from 615 a year earlier. The drop followed decreases of 25% in August, 23% in July and 14% in June.
The median sale price for condos was $502,500 in September. That was up 5% from $478,000 a year earlier. The record was set in June at $534,000.
Chad Takesue, a Locations agent and president of the Honolulu Board of Realtors, said in the trade association’s report that properties are spending more time on the market before moving into escrow and that purchase offers above asking prices are becoming less common.
“We’re in a different market environment than we experienced one year ago,” he said in the report. “With rising rates and inflation, buyers are reevaluating what they can afford, and this is having ripple effects across supply and demand in our local housing market.”
According to Freddie Mac survey data, average nationwide mortgage interest rates recently reached a 15-year high of about 6.7%. A year ago the average was at 3%.
Connelley said in the Locations report that home sales prices may be flat in the coming months, but added that broad demand makes the local housing market less subject to negative impacts from higher borrowing costs or economic uncertainty compared with most other U.S. housing markets.
“While properties are taking a bit longer to sell and competition has fallen from its peak in 2021, the market is healthy, and the supply-demand balance continues to favor sellers,” he said.
HOME SALES
The number of homes sold on Oahu in September with the median price and percentage change from the same month in 2021:
HOMES
SALES MEDIAN PRICE
2022 278 $1,100,000
2021 424 $1,050,000
Change -34.4% 4.8%
CONDOS
SALES MEDIAN PRICE
2022 496 $502,500
2021 615 $478,000
Change -19.3% 5.1%
Source: Honolulu Board of Realtors
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