Year-end recap from Prudential Locations
Happy new year! It seems like the year of 2012 went by faster than most, and I’m sure Oahu realtors felt the same way. I could see from Twitter and Facebook posts that a lot of them were churning out sales at a frantic pace, more than usual.
I got an end-of-year report from Prudential Locations that summed up Oahu's real-estate market conditions, which explains what’s causing properties to sell quickly, at close to or more than asking prices. It’s the lack of inventory, of course, but here’s how they break it down:
- Sales: Oahu single-family home sales were 3,072, a 6.4 percent increase over 2011. Condominium sales were 4,221, a 7.4 percent increase over 2011.
- Median Price: The Oahu single-family 2012 median price is $625,000, an 8.1 percent increase over 2011. The condominium median price is $315,000, a 5.0 percent increase over 2011.
- Appreciation: The amount of home appreciation varied depending on region and neighborhood, with 68 percent of Oahu neighborhoods showing an increase in median price in 2012 pointing to a broad-based price shift.
- Bid-Up: 21.4 percent of all homes sold in 2012—or more than one in every five homes—bid-up above the asking price. For condos, 12.7 percent, or more than one in every eight condos, were bid-up above the asking price. For homes under $500,000, about 44.3 percent were bid up over the asking price in 2012—almost one out of every two homes.
- Days on Market: The Median Sold Market Times, or the number of days for a property to enter into contract, dropped from 36 days in 2011 to 32 days in 2012 for single family homes, and from 42 days in 2011 to 32 days in 2012 for condos. This is a good indicator of strong buyer demand.
- Available Inventory: Current inventory of properties available for sale is 790 for single-family homes and 1,180 for condos. These are the lowest levels on record in 30 years. Given strong buyer demand, it appears that the extremely low number of properties available for sale is constraining growth in number of sales in 2012.
- Distressed Property: The number of distressed sales dropped by almost half in 2012. About 8.5 percent of all residential property sales were either short sales or lender sales, down from 15.5 percent in 2011. Oahu’s Leeward and Ewa regions are still the hardest hit with distressed property sales of 34 percent and 28 percent respectively.
- Interest Rates: Mortgage rates are at record lows. The current rate for a 30-year conventional mortgage is 3.32 percent, effectively putting Oahu homes “on sale,” as well as increasing the number of buyers who can afford to buy.
- The market conditions above proved to be a positive combination for the Oahu market in 2012. While no two years are exactly alike, we look forward to releasing the 2013 forecast analyzing the current market vs historical performance, and leading macro-economic indicators in the near future.