Number of Oahu Single-family Homes for Sale is Plummeting

If you’ve been searching for a home on Oahu this year — especially a single-family home — you’ve probably noticed there’s not much for sale. Single-family home inventory has been limited for many years, as new home construction has not been keeping pace with demand for decades. In March, homes for sale fell by 55% from a year ago, fueled by low interest rates and increased buyer demand.

There’s always been strong demand for housing on Oahu — both from locals, and from Mainland and international buyers. Since the pandemic began more than a year ago, the rise of remote work and Hawaii’s relative safety has lured more buyers. Thanks to super-low interest rates and rising home equity, there’s also been an increase in local buyers looking for a home or neighborhood that better suits their changing needs.

For-sale inventory by market area

There are currently just about 400 single-family homes for sale on the entire island, and for-sale inventory has declined in all single-family home market areas. The biggest decline is in the Mililani market — which had no homes for sale as of mid-March. In general, the market areas with the sharpest declines in inventory tend to have lower median home prices; however, this isn’t always the case. The smallest drop in inventory is in Manoa, where just 8% fewer homes are currently for sale compared to a year ago. Nuuanu-Makiki and West Honolulu (which extends from Kalihi to Salt Lake) have also seen softer drops in inventory than other parts of the island.

It’s a seller’s market

With just 1.2 months of remaining inventory, now is a great time to be seller (a balanced market is considered to have six months of remaining inventory). So far in 2021, one in two single-family homes have sold for above the asking price as a result of a bidding war. In February, half of all homes sold for more than $920,000 — a record high. Sellers who have owned their homes for at least a few years could have a significant amount of home equity — making this year an ideal time to move up or downsize.

Advice for buyers

It’s a challenging time to be a homebuyer, but it’s not hopeless. Prospective buyers should get pre-qualified for a loan and be ready to act quickly. In this market, it’s also imperative to partner with a knowledgeable Realtor ® who can alert you to new listings and put in offers quickly. Buyers who can be fl exible when it comes to choosing a neighborhood or home type, such as a condo or town home, may have more choices. Interest rates, while still near historic lows, are ticking up. So, prospective buyers who have been on the fence about buying should consider acting sooner rather than later.

To set up automatic alerts when a new listing becomes available in your desired neighborhood, download the free Locations app or visit locationshawaii.com.