Housing market seeks equilibrium
BY LISA SCONTRAS
Even though there are more Oahu homes on the market than we’ve seen in recent years, sales volume continues to be steady and prices are largely holding their own. Spurred by a bumper crop of available listings, and with mortgages at bargain-basement rates, 2019 has precipitated a rebalanced supply and demand dynamic for both buyers and sellers. For an analysis of what the local housing sales statistics mean and which direction they are trending, we asked Jenny L. Brady, president of the Honolulu Board of Realtors® to share her insight.
Q: WOULD YOU SAY THIS IS A BUYER’S MARKET OR A SELLER’S MARKET?
BRADY: “We are shifting closer to a balanced market. We consider the market to be shifting toward a buyer’s market when we see the months of remaining inventory reach about six months — right now, we have between 3.7 to four months of inventory.
“While inventory is rising, the shortage is still significant for properties in the affordable to mid-range prices.
“When you compare 2018 to 2017, there was a decrease in sales volume, but an increase in median sales prices. Last month (July), single-family home prices hit an all-time high but year-to-date, prices are pretty steady — very comparable to 2018.
“In 2019, for both the single-family and condo segments, inventory is slightly up, closed sales are slightly down, and days on the market has increased. Yet, prices are holding steady, that’s how we know it is a stable and healthy market. With an increase in inventory, you might expect prices to drop, but they haven’t.
“In a balanced market, opportunities are there for buyers and sellers.”
Q: WHAT CURRENT CONDITIONS POINT TO A HEALTHY MARKET?
BRADY: “There are several forces working in our favor. First, we have historically low mortgage interest rates; they’ve dropped below 4 percent, which makes buying more affordable.
“The days on market, even though it is higher than a year ago, is still under 30 days — still considered a very brisk market.
“The increase in DOM affords buyers more time to make decisions. There was a time when the inventory was so low and the pace of the market was so fast, some buyers got discouraged, experiencing what was coined ‘buyer fatigue.’ This year’s bump-up inactivity has motivated buyers again. That’s definitely a positive influence on the market. Also, our island economy is heathy.
“One of the Honolulu Board of Realtors® themes this year is our HOPE initiative — Housing Opportunities are Possible for Everyone — aimed at encouraging a measurable increase in supply of affordable housing.”
Q: WHAT DO HBR STATISTICS SAY ABOUT FUTURE SALES?
BRADY: “Pending sales statistics indicated this is still a very active market. Based on the current statistics, we are optimistic that the September sales volume will be similar to August.”
Q: WHAT IS INFLUENCING OUR MARKET MOST RIGHT NOW?
BRADY: “Mortgage interest rates. If a buyer qualifies, 30-year, fixed rate mortgages have dropped to under 3.5 percent. With the cost of borrowing low, home shoppers have significantly more buying power, and with that, comes more properties to choose from in price ranges that were previously out of reach.”
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