Oahu Real Estate Market Report For August 2020 | What Is Going On With The Oahu Market?

Oahu Real Estate Market Report – August 2020 | What is going on with the Oahu market?

With everything going on in the world, what is going on in the Oahu real estate market?  The last couple of months have seen positive trends in the Oahu real estate market as the stay-at-home order was lifted and some segments of our local and national economy were opening up.  However, increased numbers of COVID-19 cases and related deaths resulted in another two-week stay-at-home order and closures of large segments of our economy here in Hawaii.  Nationally, cases are also on the rise and, as of Friday, the stock market that seemed to be detached from economic reality might be showing signs of stress.  We’ll have to see what Tuesday brings when the market is open again.

 

Today the Honolulu Board of Realtors (HBR) posted the Oahu Monthly Housing Statistics Report for August 2020. The single-family home market appears to be strong with some new benchmark numbers.  The Condo market is stable, but there are definitely some weak geographic and price band submarkets.

 

Single-Family Market

The single-family market continues to strengthen, still driven by low inventory and strong demand as buyers take advantage of low Interest rates.  Annual military transitions are in full swing.  Another factor driving the strong single-family market is owners trading out of condos and into single family homes.

 

On the demand side of the single-family market, closed sales are up 2.8% over August 2019, but still down 3.4% year-to-date.  August closed sales of 370 is the second highest number of sales in the past two years, and just 2 sales behind the two-year high of 372 closed sales in July 2019.  Pending sales are up significantly, with a 24.2% increase over August 2019, and up 8.6% year-to-date.  August pending sales of 662 is the highest recorded in the last two years.  The other highs were 609 last month, and then significantly lower 533 pending sales in July 2019.  Median days on market is at 15, which is up slightly from last month, but continues to be lower than many months in the last two years.

 

On the supply side, the 387 new listings in August are down 20% from 484 in August 2019, and down 22% year-to-date.  This is somewhat concerning because new listing numbers had been increasing each month since the low of 290 in April.  There were 1,021 active listings in August, which is down 34.9% from August 2019, and the lowest level in the last two years. Months of inventory fell to 2.1 months, which is also the lowest level in the last two years.  The average for the last couple of years has been between 3 and 4 months.

 

With strong demand and limited inventory, single family home prices continue the upward recovery since bottoming out at $770,000 in June this year.  The August median price of $839,000 is up 6.2% from August 2019, and up 1.8% year-to-date.  This current $839,000 median price is actually the highest in the past two years, with the next highest median price of $835,000 in July 2019.

 

The most active area for single family homes continues to be the Ewa Plain region, with 25% of the single-family sales. The most active price band is $700-800,000.  It’s interesting to note that 58% of the buyers in the Ewa Plain region used the VA loan benefit.  The VA loan was used in 30% of sales on Oahu in August.

 

Condo Market

The condo market is continuing to weaken as typical local condo buyers are more impacted by the economic slowdown, and off island investors are impacted by travel restrictions. As noted earlier, some condo owners are trading out of condos and into single family homes.

 

On the demand side of the condo market, closed sales are down 20.1% from August 2019, and down 21% year-to-date.  After improving for a few months from the low of 254 in May, closed sales are starting to decline again.  Pending sales are down 7.9% compared to August 2019, and down 15.1% year-to-date.  Similar to closed sales, pending sales improvement over the last few months has slowed.

 

On the supply side, the 696 new listings in August are down 7.6% from August 2019, and down 19% year-to-date. The 2,346 total active listings in August are down just 4% from August 2019, and still close to the highest levels in the last two years. Months of inventory is at 4.2 months, which is the highest level in the last two years.

 

Despite significantly decreasing demand and high inventory levels, median condo prices remain surprisingly steady at $430,000, which is up 2.5% from August 2019, and up 1.2% year-to-date. I believe that has more to do with the shift in the segment of the market that is being traded rather than an indicator of the overall health of the condo market.  Some segments are stable while others are very weak.

 

The most active area for condos continues to be the Honolulu Metro region, with 46% of the condo sales.  The most active price band is $300-400,000.

 

Summary

The single family market is a strong seller’s market with indications of continued strength.  The condo market is statistically a seller’s market, but facing challenges in some geographic and price band submarkets that are definitely buyer’s markets.

 

If you’re considering downsizing from a single-family home to a condo, THIS IS YOUR MARKET!  Seller’s market on the single-family side and buyer’s market on the condo side.  There can be great opportunities for 1031 exchanges in this type of market as well.

 

Keep in mind the numbers in the August report are the result of market conditions 30-45 days ago as things were improving after the first stay-at-home order was lifted.  It’s too early to see any impact on the market now that we’re back to a second stay-at-home order and Congress still has not passed a second round of relief.

 

General economic conditions remain uncertain as we’re nearing the end of the two-week stay-at-home order and local leaders are hinting at extending it.  Nationally, our leaders seem more focused on the November election and the circus leading up to that, rather than taking care of the important matters at hand.

 

 

To see the full report, click HERE.  If you have questions about your home, building, or neighborhood, please fee free to contact me.

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