Analyzing the strength of the Hawaii market

I read in the New York Times this weekend about how their real estate market is performing.  Most price points are doing well, but it is still rather sluggish at the upper end above $10million.  This put in mind to analyze Oahu’s inventory at various price points.  From this past months statistical reports it is clear to see that Oahu inventory of active listings will last just slightly over 6 months.  This means that is no new listings come onto the market, it would take in general 6 months to sell all of the inventory.  But, this does not take in consideration the various price points in the market.

As a side note, 6 months is a relatively short time and usually indicates that there will be upward momentum in list price and of the median sales price, but that has remained a bit flat likely because of the concern over economic growth.

Separately this out to different price points becomes very interesting and gives much light as to the activity in the Hawaii real estate market.  Below $1 million is where the financing is the easier and has the most inventory available, but at the rate that the sales are occurring we only have 2.23 months of inventory if no more houses come onto the market.  That is very tight and should be a strong indicator of not only a short days on market time, but a strong upward momentum in list price and sales prices.  Under normal circumstances this would be a likely indicator of a price spike.

Next looking into the $1 million to $1.5 million which still has financing available especially with those who have regular paychecks.  The months of inventory is at a healthy 8.3 months.  This is a healthy pace, but not necessarily in a position to drive prices significantly higher in a normal market.    The houses that seem to sell the fastest in this price range are well cared for and fixed up so that a potential buyer need not do anything.

These are in sharp contract to the housing market of over $3 million.   At these inventory levels it will take over 21 months to sell the existing inventory.  This is definitely usually a slower moving segment of the market, but it is clear that there is perhaps a glut of higher priced properties.  They are selling however.  Six sold in the month of August and 88% of their list prices on average.

If you are interested in certain analysis or are interested in buying or selling property in Hawaii contact our principal broker, Malia L. Meenderman, R.