O’ahu Market Update
Last month, the Tale of Two Stories continued. The single-family home market and the condo market are headed in two different directions. Home sales last month were up by 26% and condo sales increased by a minimal 2.6%. The average price for homes increased by 15.2% for homes and just 2.3% for condos. Even more notable is the difference in inventory of homes for sale. Homes were up by 15.5% and condos increased by a whopping 37.8%. Finally, buyers paid 99% of the listing price last month for homes and just 97.8% for condos.
The jury is out on the cause of the divergence between homes and condos. It could be a sign that aging condos have lost demand because of increasing maintenance fees to maintain older buildings. It could be the lack of financing available for a growing number of buildings due to the lack of hurricane insurance coverage available to condo associations, or it could be that people prefer space to amenities and convenience. Whatever the reason, demand for condos is falling while inventory is increasing. That may lead to a correction in prices or at least, a slowing of price increases.
In summary, sellers looking to sell a home took 17 days to accept an offer and sold for 99% of their asking price, caused by minimal home inventory and healthy demand from buyers who want space and have limited choices given the limited inventory of homes for sale. When selling their condo last month, sellers found that it took 29 days to accept an offer for 97.8% of their asking price, caused by rising inventory (up by 37.8%) and flat demand (2.3%).
