Median home price rises to record $700,000
Oahu's housing market has pushed into new territory, breaking a 7-year-old record that appeared ready to fall after being brushed a few times in recent months.
The old record — $685,000 for the median sale price of single-family houses, set in June 2007 — was buried by a $700,000 median price in June, according to statistics reserved for release Monday by the Honolulu Board of Realtors.
A record also was set last month for condominiums with a $360,000 median sale price. The prior high was $359,450 in February.
"June was a remarkable month," Julie Meier, president of the Honolulu Board of Realtors and an agent with Prudential Locations LLC, said in a statement. "This shows the very strong demand we're currently seeing for housing."
Real estate professionals and local economists have been anticipating that 2014 would be a third consecutive year of higher median home prices at an annual level following the last dip in 2011.
However, it was more difficult to predict when the top price for any single month would be eclipsed for single-family home sales. That's because it was a frothy period in mid-2007 followed relatively quickly by a downturn, a few bumpy years and now perhaps another move from modest to more robust growth.
The prior single-month record of June 2007 was clearly under pressure after being tied in December. There also were three other times since November that the median price came just above or below $680,000, suggesting the record was near falling.
It only took a 3 percent gain last month to break the old record, given that the median sale price in June 2013 was $677,250.
The University of Hawaii Economic Research Organization predicts that Oahu's single-family house median sale price this year will rise about 10 percent to roughly $710,000.
UHERO also predicts that next year will see a 9 percent gain that pushes the median to about $775,000.
This year through June the median single-family house sale price is up 7 percent to $669,500 from $625,000 in the same period last year.
In the condo market, UHERO predicts that median prices will rise about 6 percent this year to about $355,000 and another 6 percent next year to about $375,000.
For the first six months of this year, the median condo sale price is up 7 percent to $350,000 compared with $326,750 in the same period last year. For June alone the median price rose 9 percent over the $330,000 median price in June 2013.
Fueling the gains in Hawaii's biggest residential real estate market are low interest rates, rising personal income and job growth that are elevating demand while relatively little new housing is being delivered and there has not been a flood of people selling existing homes.
There were 1,200 single-family houses on the market for sale at the end of June. That was up from 1,153 in the same month last year but down from 1,279 in May.
Condo inventory was 1,749 at the end of June, up from 1,473 a year earlier but down from 1,793 in May.
Meier said she expects inventory to rise, but not enough to offset demand, especially for single-family houses.
The relatively tight inventory helped keep a lid on the number of sales. There were 303 single-family house sales last month, down 2 percent from 308 in the same month last year. The condo sale tally was 411, up 5 percent from 392 in the same period.
"That demand, coupled with low inventory, is what's causing the continued growth in median sales prices," Meier said.
The number of homes sold on Oahu in June with the median price and percentage change from the same month last year:
June 2014 ..........................303$700,000
June 2013 ..........................308$677,250
June 2014 ..........................411$360,000
June 2013 ..........................392$330,000
Source: Honolulu Board of Realtors
Printed in Star Advertiser on July 7, 2014