Home sales down, prices up

Despite rising prices, now may be the time for buyers to buy.

HONOLULU — Recently released home and condo statistics for Oahu and statewide provide insight into a dynamic housing market that continues to show movement in a variety of aspects. As median single family and condominium prices rise, the number of sales falls. The number of April 2012 home sales fell from April 2011 numbers, as well as from March 2012. Falling sales and rising prices could make this a time for both buyers and sellers to act.

Home prices have risen in the first four months of 2012, over the same period last year. A major factor in the rise in home prices is a low inventory of homes on the market. The number of single family homes and condos on the market are at their lowest level since mid-2005. “We may be seeing lower sales not driven by low buyer interest but limited by extremely low inventory,” says Carl Worthy of Prudential Locations.

The relatively low median number of days a home or condo on the market contained in the recent report also indicates that there is strong buyer interest in the market. The low number of available properties is the primary reason for a decrease in sales.

Other indicators of a seller’s market include the relatively obscure statistic “months of remaining inventory”, which estimates the amount of time it would take for all of the currently homes on the market to be sold under current conditions. 

“Six months is considered the break point between a buyer’s and a seller’s market,” says Worthy. “The farther you move from that 6-month point, the stronger either the buyer or seller is favored. At about 4.5 months, says Worthy, “we are seeing the beginnings of a strong seller’s market.”

However, despite it being a “seller’s market” now may the time for home buyers to make their purchase, particularly if prices and interest rates are rising.
“It will get very tough for new buyers to qualify,” says Worthy. “For a first time home buyer, waiting can be fatal.”

“It will get very tough for new buyers to qualify,” says Worthy. “For a first time home buyer, waiting can be fatal.”

Presently, there are compelling reasons to both buy and sell real estate in Hawaii. Factors affecting home prices and the number of homes sold continue to change, and only those closely monitoring current trends and statistics will be able to get the best possible value.

Just as home buyers may fare better by buying sooner than later due to rising prices, sellers may consider selling before the number of home buyers dries up due to rising prices and/or interest rates. Sellers benefit when there are a high number of bidders for their property. With fewer buyers, sellers are less likely to see their asking prices met or exceeded.

Presently, there are compelling reasons to both buy and sell real estate in Hawaii. Factors affecting home prices and the number of homes sold continue to change, and only those closely monitoring current trends and statistics will be able to get the best possible value.

For more information about the Hawaii real estate report, visit here.

 

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