Real Estate Report - September 2023
O'ahu Market Update
The rate of home sales and the rate of new homes coming on to the market has begun to converge. As a result, prices have increased. During the month of August, pending sales were down 14.4% for homes and 10.5% for condos. New listings on the market dropped by 13.4% for homes and 9.7% for condos/townhomes. This dynamic may continue until we see mortgage interest rates drop or prices go down. Sellers continue to enjoy a market where prices are stable and homes sell within 3 weeks if priced near recent comparable sales. The sales price to list price ratio of 99.1% for homes and 99.6% for condos could be an indicator that there is limited price negotiation in today’s market.
Since affordability has been affected by both a rise in mortgage interest rates and the price of a home, buyers should work closely with their Realtor and lender to ensure they are comfortable with the monthly payment required to purchase their desired home. If a buyer is purchasing a principal residence, they should compare their potential mortgage to their current rent and consider that 100% of the rent goes to the landlord while their mortgage payment is going towards their future ownership of the property and any appreciation which accumulates. If purchasing a property as an investment property, a Realtor can provide the data needed, allowing the investor to calculate whether or not the property will provide the cash flow the buyer expects.