Hawaii Real Estate News

Oahu home sales, prices slipped in 2011

Jan 10, 2012

By Andrew Gomes - Honolulu Star Advertiser

Hawaii's slow and uneven economic recovery appeared to rub off on Oahu's housing market last year, as median prices dipped a little on relatively flat buyer demand.

The Honolulu Board of Realtors released a report Monday with sale results for December and the full year.

Some observers had hoped that positive momentum in sale volume and median prices that occurred in 2010 would continue in 2011, but in recent months the trend has been clear that the market was sliding back a bit.

Single-family homes sold for $18,000 less, or 3 percent, based on median prices of $575,000 last year compared with $593,000 in 2010.

The number of single-family home sales declined 2.7 percent, representing 83 fewer transactions, to 2,974 from 3,057.

For condominiums the median price slipped by $5,000, or 1.6 percent, last year to $300,000 from $305,000 the year before.

The number of condo sales was the only piece of the broad market to realize a gain, though it was only 1.3 percent as people bought 52 more units to raise the total to 4,029 last year from 3,977 the year before.

Numerous factors helped make for a soft housing market last year.

Interest rates were at attractive historic lows, but tight lending requirements disqualified many would-be buyers. Also, relatively low inventory put positive pressure on prices, but an overhang of foreclosure properties helped keep prices down.

HOME SALES

The number of homes sold on Oahu in December with the median price and percentage change from the same month last year:

Homes

Sales Median Price
December 2011 268 $605,000
December 2010 312 $585,000
Pct. change -14.1% +3.4%
Condos
Sales Median Price
December 2011 333 $285,000
December 2010 356 $300,000
Pct. change -6.5% -5.0%
Source: Honolulu Board of Realtors
Meanwhile, Hawaii's choppy economic recovery didn't help, as tourism modestly grew while construction stayed in the doldrums and unemployment decreased little.

The University of Hawaii Economic Research Organization issued a report in November saying Hawaii's economic recovery was in "pause mode."

The UHERO report forecasts that Oahu's median single-family home price this year will inch up 1.5 percent while the median condo price stays the same as last year.

Mike Sklarz, a local economist who operates the real estate research firm Collateral Analytics, said the local housing market could bump along sideways for a couple of more years until what he predicts will be another boom in sales and prices.

"We're in the middle of what could be an extended sideways period," he said.

Joe Paikai, president of the Honolulu Board of Realtors and broker-in-charge at Valcore Realty Group in Kakaako, expects the real estate market to improve this year based on gains in some regions of Oahu.

Last year single-family home median prices rose the most -- 9 percent -- in Hawaii Kai among regions with many sales. In Kailua the gain was 2 percent. The biggest region for sales, the Ewa Plain, eked out a 1 percent gain. Overall though, median prices were up in just five of 20 regions with significant sales.

"We feel very bullish that this year will be a turnaround for (more) of the neighborhoods," Paikai said. "We see people being more confident in the marketplace."

Another positive possible sign looking ahead is that the median price for Oahu single-family homes rose in the last two months of 2011 over the same months the year before.

A 1 percent gain in November was followed by a 3.4 percent rise in December. Last month's median of $605,000 was the highest for any month last year.

The median price for condos, however, had two consecutive months of 5 percent drops after a nearly 2 percent gain in October. Last month's condo median of $285,000 was the second lowest for any month last year.

The number of sales in December was down for both single-family homes and condos. There were 268 single-family homes sold last month, down 14.1 percent from 312 in December 2010. Condo sales dipped 6.5 percent to 333 last month from 356 in December 2010.