Attached please find the May 2009 Honolulu Board Of Realtors Stats for May, 2009. There is a lot of good news here for Hawaii real estate. The good news will be clear to see for anyone – except the media who is still comparing everything to last year. If you look at what is going on so for this year – it is looking much better.
One important thing to keep in mind. Median home sales prices were down compared to April `09 and of course to May of last year. This was expected. It was expected because median sales price is measuring the median price of the property sold within the month. With a strong influx of first-time home buyers in Hawaii, it was expected that median sales prices would drop, because FTHB purchase at the lower end of the price range.
This is another reason it is silly to compare May of 2009 to May of 2008. They are apples and oranges. The characteristics of the properties sold in May of 2009 are completely different from the properties sold in May of 2008. Comparing the two just makes no sense. And further, to imply that this indicates all prices are falling equally makes no sense. Even so, the media will compare and scream about how prices (and sales) are plunging, falling, slipping, sinking, diving, dropping, declining, dipping, tumbling, and of course, plummeting.
Here is a quick summary for May:
- Sales up strongly - again: Single Family Homes at 225; Condos at 263 were both up compared to 189 and 257 in April of 2009, however lower than May of 2008’s SFH of 252 and Condo of 382. Look for the media to scream, “sales still falling!” However they aren’t falling. So far this year, sales have increased every month with May `09 SFH sales almost double what they were in January `09. This upward trend is clear.
- Median prices: SFH at $550,000 and Condos at $305,000 were below April of 09, and below May 2008 of SFH $649,000 and Condo at $337,500. As discussed above, comparing these numbers to last year is useless. Be prepared for the headlines – SFH prices fall almost $100,000! It still looks like January 2009 SFH was the bottom at $539,500.
- Days On Market are lower again. SFH at 49 and Condos at 52 are in the range they were for 2006, 2007 and 2008. Don’t look for this to be featured in the media however.
- Oahu Homes Inventory is down big time! This is the big news from the May stats. SFH at 1,739 units, Condos at 2,438. Both if these are lower than May of 2008, and consistent with numbers from 2007 – even back to 2006. The lower the inventory numbers, the more upward price pressure that is created. Sellers become less flexible as they face less competition.
- Months of remaining inventory dropped again for the third straight month to 9.2 for SFH and 9.5 for Condos. And Months Of Remaining Inventory near 10 months indicates stable prices. The lower the MORI moves below 10 months, the more the upward pressure on prices.
The other big news is that interest rates are beginning to sneak up. What this means is that the unique circumstances that made this market so perfect for buyers are beginning to unravel. Inventory is dropping and rates are creeping up. It is still great for buyers. But it will get less great over time.
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