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Market Update: July 2022
Oahu’s real estate market shows strength despite decline in sales volume
Oahu’s finite amount of available island land on which to build, and historically limited inventory of homes for sale has long been the fundamentals for the island’s relentless housing demand, sustained rise in prices, and a prolonged seller’s market.
But, in July, there was a much-needed inventory relief for frustrated buyers. Active single-family inventory increased 38.8% — from 415 homes for sale in July 2021 to 576 last month. And active condo inventory jumped from 969 listings in July 2021 to 1,050. These higher active-inventory counts hint that a more buyer-friendly market is emerging — a welcome change — for buyers left frustrated by months of slim pickings. [read more including neighborhood standouts]
“Fewer buyers and less competition equal more price reductions and fewer sales — good news for buyers,” says Mike James, president of Coldwell Banker Realty. “And sellers are happy too because while sales volume figures are down from a year ago, when we compare last month’s closed sales volume to pre-pandemic 2019 figures, they are about the same — the market remains strong. Prices are also trending up — Oahu condos set another record month in July.”
But even with some price reductions, and less competition, and more inventory, some buyers are struggling with the effects of higher mortgage interest rates. A year ago, July 2021, 30-year term mortgage rates were below 3% — under 2.5% in some cases. Today, rates are consistently above 5% and moving higher, meaning the same house costs more money each month — causing borrowers to reevaluate what they can afford. The higher rates are literally knocking some buyers out of the game completely.
“So, the market is a bit more buyer-friendly for those who can still qualify for a sufficient mortgage,” adds James. “But some buyers may be forced out of the market — that’s how impactful interest rates can be. And that may also account for last month’s slowing sales volume. When mortgage money gets tight, the qualified-buyer pool shrinks, and sales slow.”
The “big picture” market indicators are positive: Median sales prices are up. Active inventory is trending up. Most sellers are receiving full list price — some higher. Homes are selling very quickly. Median days on the market, while slightly more than a year ago, is still very low.
Sales of Single-Family Homes and Condos | July 2022
Source: Honolulu Board of REALTORS®, compiled from MLS data
July housing sales volume dropped 22.8% from July 2021, with fewer closed sales for single-family homes and condos closed. Single-family homes dropped from 404 in July 2021 to 312 last month, and condo sales tumbled from 671 a year ago to 518.
This was the third consecutive month with double-digit declines in sales volume.
Single-family home sales fell across most regions on Oahu, with the largest drop in volume occurring in the Ewa Plain, Kaneohe, and Leeward regions. In the condo market, the Metro region accounted for the largest decline in sales volume.
Median Sales Price of Single-Family Homes and Condos | July 2022
Source: Honolulu Board of REALTORS®, compiled from MLS data
The median sales price for a single-family home on Oahu was up for the 12th consecutive month in July — to $1,107,944, from $992,500 a year ago, and 11.6% increase. And the MSP of a condo in July was up 5.3% to $500,000 from $475,000 the previous year. This was the 5th consecutive month the condo MSP came in at $500,000 or higher.
And both year-to-date figures are trending higher than the year-end for 2021. Year-to-date, the SF MSP at the end of July was $1,110,500, compared to $990,000 at the end of 2021. The condo year-to-date figure in July was $515,000, compared to $475,000 in 2021.
NEIGHBORHOOD MARKET STANDOUTS
While overall sales volume on Oahu dropped last month in most neighborhoods, this was not the case island wide. So where were the number of closed sales up? Below are the neighborhoods when, in June, closed sales were higher than 2021.
| SF | Closed sales June 2022 |
Closed sales June 2021 |
% change |
| Mililani | 27 | 17 | 59% |
| Moanalua/Salt Lake | 5 | 4 | 25% |
| North Shore | 13 | 7 | 86% |
| Waipahu | 27 | 20 | 35% |
| Condos | Closed sales June 2022 |
Closed sales June 2021 |
% change |
| Ewa Plain | 62 | 60 | 3% |
| Hawaii Kai | 25 | 20 | 25% |
| Moanalua/Salt Lake | 29 | 23 | 26% |
| Waikiki | 133 | 126 | 6% |
Does the Housing Market Still Favors Sellers?
Ever since interest rates decreased at the beginning of the pandemic, it has been a sellers market in real estate. With low interest rates, buyers took the opportunity to buy homes and secure mortgages at these low rates. Competition for homes has increased significantly along with prices, sales continue to be brisk, and inventory remains low. However, market conditions may be changing in the near future.
Home Buyers
Over the past few months, interest rates have been steadily increasing. While rates averaged around 3% at the end of 2021, they have since increased to an average of 5% at the end of May. Additional increases are planned by the Feds. Despite the sea of potential buyers on the market, the higher interest rates have some of them postponing their home purchase which is allowing the market to move towards some stability.
Home values rose by upwards of 20% over the course of 2021, which means that buying a home today is more expensive than it was just a year ago. Yet, the increased competition for homes has made multiple offers on homes the norm, making it difficult for many buyers’ to have their offer accepted. As demand decreases among buyers, home inventory will begin to increase and purchasing a home may become easier.
In general, housing demand is expected to still be strong and inventory to be relatively low. But, the market won’t be as intense as it was in 2021. Home prices are expected to rise this year but shouldn’t come close to the 20% increase that occurred in 2021.
Home Sellers
If you’re looking to sell your home, the housing market still favors sellers who hold negotiating power. There may not be a lengthy bidding war when you list your home on the market, though. If you want your home to be sold without delay, perform any necessary upgrades and repairs before putting it on the market.
It is unlikely that the housing market will shift completely to favoring buyers. Yet, it’s increasingly likely that the market will become more balanced over the next year or so. A balanced market is great for buyers and sellers alike.
Where will Real Estate’s Wild Ride Go?
One could say that the housing market in 2021 was like a rollercoaster that kept on climbing. On average, home prices rose 10.6% across major cities nationwide in the 3rd quarter of 2021. This marked the fastest rate growth in nearly 17 years. Days on market, mortgage rates, median sales prices and inventory all broke records in 2021.
Why did median home prices rise by 19% for single-family homes on Oahu as well as the rest of the country which experienced similar or even higher double-digit increases? Four key factors: the government stimulus, accrued savings during the lockdowns, a pandemic-induced reassessment of lifestyles, and low interest rates.
With the historically low interest rates, first-time homebuyers flooded the market in search of properties nationwide. However, with the low inventory of homes and the continued shortage of new build homes, competition for properties was fierce and the share of first-time buyers in November was 26% across the U.S. This is the lowest percentage seen since 2014.
Second home buyer demand, on the other hand, is up 83% from pre-pandemic levels in the U.S. This is largely due to the fact that lockdowns and remote work have made vacation destinations more desirable. Many are opting to exchange cramped city life for more space. This demand is expected to continue.
What to Expect In 2022?
Here are my key takeaways from all the data I’ve seen:
* The real estate market will be strong, and more balanced compared to 2021
* The severe inventory shortage and price growth of single-family homes will continue the surge in condo sales
* Mortgage rates will increase
* Median home prices will increase moderately
* Rental prices will continue to rise
If you’d like more details on specific neighborhoods, have been thinking about making real estate moves in 2022 or know someone who may be, let’s chat!
For more details on the housing market:
The Housing Market was on a Wild Ride this Year. Here’s what to expect in 2022 – CNN Business
A Very Special Account
The first week of 2022 is in the books! I hope your year is off to a fresh start and that your holiday season was filled with joy and peace. I relished the down time indoors to bake, practice yoga, read, watch some movies, and close out the year with reflection. My key takeaway: much gratitude for the simple, everyday blessings I couldn’t live without. Family, friends, good health, fulfilling work that I love, and this special place I call “Home.”
I’d like to share a story that I heard recently which made me stop and ponder as we begin a new year…
Imagine there is a bank that deposits $86,400 to your account each morning. The account carries over no balance from day to day. Every evening, whatever part of the balance you failed to use during the day is withdrawn. What would you do?
Each of us has such a bank. Its name is TIME. Every morning, Time credits you with 86,400 seconds each day. Every night it writes off, as lost, whatever of this you have failed to invest to good purpose. It carries over no balance. It allows no overdraft so you can’t borrow against yourself or use more than you have. Each day, the account starts fresh. Each night, it burns the remains of the day. If you fail to use the day’s deposits, the loss is yours. There is no drawing against tomorrow. The time you have is the time you have. It is never the case of not having enough time to do things, but whether we want to do them and where they fall in our priorities.
Best wishes for happiness, new adventures, and health in 2022!
Why Staging Matters Even in a Seller’s Market
Homes may be selling faster in this brisk market, however staging a property to showcase it in its best light can benefits both buyers and sellers. Staging helps buyers to see the full potential of a given space or property and leave a memorable impression. Staging a property can also help sellers get the best ROI on their home. Read more…
Following are some “before” and “after” photos of one of my listings. The “before” photos were taken with my iphone before staging while the “after” shots were staged and professionally photographed. Naturally, the “after” shots have better lighting and a better photographer, but do you see how just a little bit of staging can make a difference?
Results? This home received multiple offers within a week and closed more than $100,000 above the asking price. So happy for my clients!
New Project Highlight: ULANA at Ward Village
Ulana will be the newest residential condominium in Ward Villages in Honolulu. Hawaii residents will have the opportunity to purchase Reserved Housing units in studio, 1-, 2- and 3-bedroom floor plans. Just minutes from the South shore, residents will become part of a vibrant community near cafes, dining, shopping, activities and parks. Residences will be offered at below market rates to qualified individuals and families. Reserved Housing was designed for those who earn too much to qualify for Federal Assistance programs, but not enough to purchase a market-priced residence. If you’d like to learn more, please let me know.
Studios starting at $271,000
1 Bedroom starting at $400,500
2 Bedrooms starting at $504,100
3 Bedrooms starting at $550,000
Tips for gardens great and small
Like the fabled “Victory Gardens” of WWII before them, urban and backyard vegetable gardens became a vital source of food and purpose for many people last year when world events threw supply chains into disarray. A year has passed, but interest in do-it-yourself food production has remained, and more and more DIYer’s are getting into growing their own crops.
Your ability to grow fruits, vegetables and a variety of herbs at home depends primarily on just three things: climate zone, space available and your level of commitment. With plenty of warm days ahead, it’s not too late to get started on a garden of your own.
If you’re limited to an indoor garden, consider hearty options like avocados, carrots, microgreens, lemons and scallions. You’ll need some large, south-facing windows to have a successful garden. If that’s not an option, grow lights and hydroponic kits have become a popular option in recent years as they’ve become more and more affordable.
For outdoor gardening, the first step is to check local zoning ordinances and/or homeowner’s association rules. Then determine your plant hardiness zone to help narrow-in on recommended plants for your area. Like anything else, having a solid plan in place is critical.
When it comes to plot-size, people tend to envision lush rows of crops and tilled soils, producing plant after plant of vegetable-producing crops. If you’re lucky enough to have such ample space at home, you’re limited only by the time and effort you want to expend.
If space is scarce, never fear. Urban gardeners have developed innovative ways to garden in small spaces.
- Go vertical: If space is limited, consider a garden wall. You can utilize vertical space by attaching planters to exterior walls that get lots of sun exposure. Don’t have an appropriate wall? You can find prebuilt ‘grow towers’ with a quick internet search, or build your own DIY version using a large plastic drum, some PVC pipe and a drill.
- Garden in other containers: Use containers of all sorts on your porch, balcony or patio to maximize your growing space including buckets, planter boxes, hanging baskets, pots, and barrels.
- Create a rooftop garden: Utilize the space that most of us never even think about, your rooftop! If you have a flat space on your roof and a safe way to access it, consider designating that area as your growing space. Just make sure consult a professional to ensure that your roof can carry the load.
If gardening at home just isn’t an option, check to see if there is a community garden in your area. Community gardens can be a way to share in the work, build community bonds and enable others to participate. With the right equipment and some sweat equity, any community can turn a vacant lot into a food-producing zone.
However you decide to grow your home-garden, once you’ve tasted your very first home-grown tomato or finished your first batch of pesto made from your home-grown basil, you’ll know the hard work was worth it!
Prefer a New Build Home?
There is strong demand for homes from buyers wanting to lock in on low interest rates. Because of this, inventory of new listings has not been able to keep pace. Perhaps you may not be in a rush to find a new home? Or, you may prefer to buy a brand new home. Whether it be a single-family, town home, or condo development, buying a new build home offers you choices. You are able select the lot or unit location within a new community, as well as choose finishes and design preferences, among other benefits.
There are several new developments taking place around Oahu. One new condominium development that will begin sales very soon is the Park on Keeaumoku, offering studios, 1-, 2- and 3-bedroom residences.
Conveniently located in the walking-biking hub near the Ala Moana and Makiki/Punahou neighborhood, this project will include residences, shops and eateries fronting a brand new park. Nearly half an acre of lush greenery will enhance open spaces where residents can eat, shop, and relax. My company is the exclusive project broker, so if you are interested in a preview, let’s get together virtually or in-person in our new showroom!
