Honolulu months of housing inventory shrinks further

Analyzing the end of year data of the housing statistics for Oahu,  I have noticed a continued month over month decline of housing inventory.  There are several key data points that I look at to find stabilization in the overall housing market.  Of course, price is one of them.  Our median single-family home sales price was up earlier in 2009 but ended down by 8.5% from December 2008 at $575,000.  But, delving further into the numbers, I look at the median list price and number of recent listings, the average days on market, and the months of inventory available.

The months of Honolulu housing inventory and days on market numbers are key in looking forward to stabilization, increasing or decreasing market.  Both of these indicators have declined in the past year.  The days on market is half as what it was a year ago, which means that houses are selling more quickly.  The average single-family home sells in 34 days.  That is very low.  Even the year-ago figure of 65 is considered low, but the shortening of this time means that there is likely a reduced inventory, which there is, and ready, willing and able buyers are in the marketplace.

This leads me to the months of inventory.  This is found through considering the number of new properties coming on the market and seeing how long it would take to sell these, in this case, 34 days.  This leaves only 4.2 months of inventory.  That means if nothing else comes on the market in theory all available for sale properties will be gone in 4.2 months.  This is down from 12months in December 2008.

The median sales prices have not completely stabilized yet, but these indicators are an excellent sign for the future.