Slow and Steady
At midyear, single-family home sales were six percent higher than a year ago, while condominium sales were six percent lower. Sales in both markets have been steady and are following typical seasonal patterns; however, they remain about 20 percent below pre-pandemic levels.
Oahu housing prices have risen slightly since the beginning of the year— up three percent for homes and two percent for condos, compared to last year. Additionally, more than half of Oahu’s 398 neighborhoods have experienced price increases this year.
It’s (Still) a Seller’s Market
The number of homes and condos for sale has been ticking up this year; however, Oahu’s housing inventory remains near historic lows, resulting in continued seller’s market conditions. At the end of June 2024, there were 695 homes and 1,807 condos available for sale—an increase of 10 percent and 50 percent, respectively, from a year ago. Despite these gains, the current supply of homes would sell out in just 3.1 months and condos in 4.8 months if no new listings were added—well below the six months typically considered necessary for a balanced market.
Competition Cooling (But Not by Much)
Although competitive market conditions have eased from the intense period of 2021 and 2022, strong buyer demand continues to keep days on market fairly low—at about three weeks for homes and four weeks for condos. Three in 10 homes and two in 10 condos sold midway through the year were bid-up over the asking price.
Looking Ahead
The Oahu market may be in the early years of a growth cycle, suggesting continued stable sales and prices into 2025. Sales are expected to continue at a steady pace, following seasonal trends. Prices are likely to remain flat-to-slightly rising for the remainder of the year.
For-sale housing inventory will remain historically low. For decades, Oahu has not had an adequate supply of housing to meet demand. Although inventory has increased slightly in the first half of 2024, lack of available housing will continue to challenge homebuyers and benefit sellers. Typical seasonal decreases in inventory are expected in the last half of 2024 and into 2025.
Interest rates are expected to end the year in the low-to-mid six percent range percent range, but are likely to move slightly lower in 2025. Unfortunately, the days of the three percent rate are gone, and not expected to return for some time—if ever. However, homebuyers are getting used to rates in the mid-six percent range. As mortgage rates drop, buyer demand increases, which, in turn, drives up housing prices.
Opportunities and Headwinds
The current Oahu real estate market presents new opportunities for buyers and sellers—and a few challenges, too.
Opportunities
- Although the Oahu market favors sellers, inventory has increased in several neighborhoods. Competitive market conditions have eased, and market times are normalizing, indicating a steady, sustainable market that presents buyers with opportunities for negotiation and leverage.
- Condo inventory is increasing, alleviating some competitive pressures and affording buyers with more options, especially first-time homebuyers.
- Investment in Oahu real estate continues to generate long-term wealth, and even first-time homebuyers have opportunities to get in the game with more properties for sale, creative financing options and assistance from family members who have experienced significant equity growth.
Headwinds
- Homebuyers and sellers may hesitate in the face of headwinds, such as interest rates, inflation and global economic uncertainty.
- The reduced availability and increased cost of hurricane insurance is contributing to a softer condo market.
- Affordability remains a challenge for buyers, with higher home prices and mortgage rates on the one hand and little income growth on the other hand.
July 2024 Market Report
Be sure to visit the Locations blog for a look at our July housing report. Each month, Locations’ in-house Research Department equips our agents and their clients with the latest islandwide housing statistics, along with a detailed local market update for both single-family homes and condos, giving them a competitive edge in a crowded marketplace.
What could you do with access to the most accurate and up-to-date market data, on-demand neighborhood charts and a dedicated research analyst? Get in touch with us, and let’s chat about how Locations could help you take your career to the next level.
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