Overall, this Market is a very, very healthy market! Those of you who were of the thinking that things were going to cool down a lot may want to revaluate their conclusions. What is happening is this market is going through a readjustment, slowly, and without pain to most buyers, sellers and current owners.
In December of '05 the market turned. It turned from a solid, strong seller's market to a buyer's market. What the market was to all buyers and sellers prior to Dec.'05 is no more. We are now playing by a different set of rules. The only problem is there is a significant amount of sellers who are still pricing their properties for sale well above what they are actually worth in Today's market. The good news is this is occurring mostly in the $Million+ homes for sale.
From December of '05 to April '06 Single Family Home (SFH) for sale inventory increased on Oahu +6%. In some neighborhoods the increase was double digits. Similar gains in for sale inventory were in Kauai, Maui and the Big Island.
At the same time the inventory was increasing in these months the # of sales for Oahu SFH's increased by +6% from Dec.'05 to April '06. However, in April '06 the # of SFH sales dropped by -15% from March'06 to end of April'06. This is approximately a 30 day period! I believe we are pausing for further price adjustments, downward.
Why might you ask did sales drop for three months and then go back up? Well, everyone knew that the market had changed in Dec.'05 when the Days on Market (D.O.M.) went up dramatically. D.O.M. is a how long it takes for a home that is for sale to get an accepted offer. Between April '05 and April '06 the D.O.M. rose by huge +55%! Why? Simply, prices are negotiable now. Major shifts in the price categories that were selling prior to Dec.'05 to April '06 have occurred. Single Family sold prices shifted lower while the huge increase in Million $ + Solds took a heck of a lot longer to sell!
Understand this: The # of Expired Listings and Withdrawn Listings for Oahu SFH's between Dec. 1st.'05 to April '06 was 1106 listings!!! Granted many of these listings were listed much prior to this period, but 1106 individual listings were pulled from the market and many of them were most certainly re-listed again with lower prices!
Important: When looking at the Market Data straight up you must look at the Expireds and Withdrawns. This is vital information not readily available to the average buyer or seller and you must get this information from your Realtor.
As you can see the amount of new for sale listings on Oahu for SFH's increased dramatically between Dec.'05 and April '06.
Normally during the summer months beginning at the end of May through October is when greatest # of sales occur while at that same time for sale inventory drops. This same pattern could be observed for this year until April '06 when the sales dropped and the inventory increased. Is this a hiccup? I am not sure what it will mean until next months May figures are released. We will have to wait and see if this is a trend.
I do not have a 'Crystal Ball' but I think it is safe to say that the market will repeat it's high cycle of sale this Summer but with one exception... for sale prices will be lower somewhat. I say somewhat because the high demand for Hawaii homes is still there and will continue to be strong. Prices will actually go up during these summer months as inventory is expected to continue to drop. Simply, supply and demand.
Median sold price history shows us that over all SFH median sold prices for right now are at best flat line. We will have to see what the summer brings us in terms of sales and median price sold for Single Family Homes.
This article would not be complete if we did not mention here what is happening in the Condo/Town Home Market.
On Oahu Town Homes and Condos are lumped together as one category of sales. There is no breakout given by the Honolulu Board of Realtors which is where this information comes from. However it is possible to break out these figures if someone needs them by neighborhood. Please call or email me for more information on this.
Oahu Condo/Town Home median sold price history shows us a similar story as Single Family Homes.
There is notable difference in the # of for sale Condos/Town Homes on Oahu between the different months of March for the last year. The number of for sales of Condos and Town Homes in April '06 was 23% lower than April '05!!! This at the same time inventory build up in this category is rising pretty fast.
The following Months of Supply Graphs are based upon Current Rate of Sale
Specific details for your Neighborhood or this Monthly report are available for the asking by calling or emailing Mike Gallagher R.A., Prudential Locations, L.L.C. Mikeg@hawaii.rr.com 808-384-9015.
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