More Homes Available for Sale on O‘ahu
A bigger inventory of homes for sale is usually good news for buyers but other data suggests they should not break out the champagne.
Last month the inventory of single-family homes actively for sale in the U.S. increased by 31% – a record high growth rate – giving prospective buyers a lot more choices. Active inventory on Oʻahu rose by 39%, and while that seems like good news for home shoppers, the collection of homes actively marketed in July was actually half the number on the market during the summer before the Covid-19 pandemic.
Oʻahu’s active inventory of single-family homes increased to 576 in July, the most in two years. That’s 161 more houses for sale than in July 2021, when there were just 415 listings, according to the Honolulu Board of Realtors.
But consider that three years ago, in July 2019, before anyone had heard of Covid, there were 1,137 single-family homes actively for sale on Oʻahu – about double last month’s inventory, which was already 10% smaller than in July 2020.
Oʻahu’s trend is similar to the mainland’s: Realtor.com reported last week that the number of homes on the market in the U.S. rose 30.7% in July compared to the same month last year, breaking June’s record growth rate of 18.7%. But July 2022’s inventory was also 15.7% smaller than July 2020’s and down 45.4% from the pre-pandemic average from 2017 to 2019.
Recent Trends in Housing
New listings of single-family homes declined last month, nationally and on Oʻahu. But while the number of new listings nationally declined by 2.8% from July 2021, Oʻahu saw a drop of nearly 18% to 386 new listings, from 469 in July 2021. Compared with pre-pandemic July 2019, new home listings dropped 26%.
That translates to 1.6 months of remaining inventory – a metric that measures how long it would take to sell every home currently for sale if sales continued at the same pace and no new listings come on the market. That is only slightly more than the 1.1 months of remaining inventory in July 2021.
That’s far from the six months needed for a stable market, says Realtor Abe Lee of Century 21 iProperties Hawaii. It’s been about 10 years since the months of remaining inventory has been that high. Even in pre-pandemic December 2019 it was only 2.5 months.
Meanwhile, the number of sales on Oʻahu declined by 22.8% in July, ostensibly because higher interest rates and inflation are pushing some buyers out of the market, yet the median price of a single-family home last month rose to $1.1 million, an 11.6% increase from July 2021.
“We still have a lack of inventory because you’re supposed to have six months of inventory to be a stable market between buyers and sellers,” says Lee. “And we’re still in a seller’s market, and the median price has gone up to a record high.”
Another report released last week ranked urban Honolulu fourth among the 10 most expensive metropolitan markets in the U.S. for the second quarter of this year. The three most expensive metro areas were in California: San Jose, where the median price last month was $1.9 million, followed by San Francisco with a median of $1.55 million and Anaheim with a median of $1.3 million, according to the report from the National Association of Realtors.
At 17.3%, Honolulu was one of 148 markets to record year-over-year double-digit growth in median price in the second quarter, compared with the second quarter of 2021. The national median price grew by 14.2%, while the largest year-over-year gains – 25% or more – were mostly in the South. Of the top 10 markets for median price growth, seven were in Florida.