Median sale price of Honolulu homes fell by 7.9 percent in 2009
by Andrew Gomes
Advertiser Staff Writer
O'ahu's housing market has recorded its second consecutive full-year decline in the median sale price of previously owned single-family homes.
The median price — a point at which half the sales were higher and half lower — ended the year down 7.9 percent at $575,000, according to the Honolulu Board of Realtors.
A year earlier, the median had slipped 3 percent to $624,000 from the 2007 peak of $643,500.
Transactions were down 5.7 percent to 2,585 last year, from 2,741 a year earlier, though sales activity has been on an upswing since September.
"2009 was a heck of a correction year," said Jim Wright, president and CEO of Century 21 All Islands. "We're still correcting. We're not out of the woods on housing."
Last month, the median sales price for single-family homes was $550,000, down 12.2 percent from $626,500 in December 2008. The number of sales was up 37 percent, to 265 from 194.
The rise in sales continued a trend that began in September, which, if it persists this year, could bring an end to five years of decreased sales volume.
Increased demand has in part been driven by a federal stimulus tax credit worth up to $8,000 for first-time homebuyers. The stimulus program, originally set to expire last month, has been amended to add a credit up to $6,500 for qualifying repeat buyers and extended to cover sales contracted by April 30 and completed by June 30.
"Well-qualified buyers are finding reasonably priced properties, and the federal tax credits coupled with low interest rates have encouraged many of those who were 'on the fence' to purchase a new home," said Brian Benton, a Prudential Locations agent and 2010 president of the Honolulu Board of Realtors.
Another factor cited in rising sales activity are many homes that lenders acquired through foreclosure that are now back on the market, usually at lower prices.
Wright said the repossessed homes, known in the industry as real-estate-owned properties, have become a significant part of the market that he expects will continue to boost sales volume this year, though the distressed assets also are helping keep median prices down.
Wright said he suspects the fallout from foreclosures could help drag median prices down 8 percent to 10 percent this year.
A University of Hawai'i Economic Research Organization forecast published in September predicts the median price for O'ahu single-family home sales this year will dip 2.4 percent.
At the beginning of last year, some observers predicted that Hawai'i would follow some of the hardest-hit Mainland housing markets that cratered 20 percent to 30 percent in the past year or two. Others said that because there isn't a significant oversupply of new homes and because available land is limited, the fall in O'ahu home prices should be moderate.
Much of the new-home construction on O'ahu in the past several years consisted of high-rise condominiums.
The median price for condo sales ended the year at $302,000, down 7.1 percent from $325,000 in 2008.
Last year was the first decrease in the condo median price since the number of sales began falling in 2006. There were 3,467 condo sales last year, down 11.8 percent from 3,933 sales in 2008. The decrease was the smallest in the past four years, when annual declines ranged between 13.8 percent and 28.5 percent.
In December, there were 349 condo sales, up 44 percent from 243 sales in December 2008. The median price was $300,000, down 1.6 percent from $305,000 in the same period.
Together, single-family home and condo sales last year accounted for 6,052 transactions, down 9.3 percent from 2008 and the lowest total since 5,127 sales in 1998. However, last year's volume still was above the trough of the previous market downturn in 1996, when there were 3,739 transactions.
By dollar volume, there was roughly $2.97 billion of residential property sales on O'ahu last year, down roughly $700 million, or 19 percent, from $3.68 billion a year earlier and about half the record $6 billion in 2005.