Are you a homebuyer on the hunt? At least if you're on O‘ahu, there are more options on the market.
The active inventory of single-family homes and condominiums last month was higher than the number of homes on the market in April 2024 by a good amount, according to April statistics from the Honolulu Board of Realtors.
Active inventory grew in most O‘ahu neighborhoods, a recent local market update from HBR, which looks at statistics by neighborhoods, noted.
In the single-family home market, the ‘Ewa Plain had 147 active listings last month, the most of all areas islandwide, while Mākaha-Nānākuli had 95, each area up from 90 the prior April, according to recent statistics from the Honolulu Board of Realtors.
Makiki-Mō‘ili‘ili was the only neighborhood to see a decline in active inventory, down 13% year-over-year with 39 homes for sale compared to 45.
The island's condominium market had more options: Waikīkī had the most condos for sale last month with 659, while Ala Moana-Kaka‘ako had 402 condos, up from 453 and 317, respectively.
Trevor Benn, president of HBR and president and owner of Forward Realty, told Aloha State Daily last week that O'ahu's condo market has about 6.8 months of inventory.
That's essentially how long it will take to sell existing inventory if nothing new comes on the market.
The "norm," he said, is about two months, "so we're over triple our normal inventory months."
"I think that's pretty easily correlated to the increases in hurricane insurance and what the effects of that are," he said. "Whenever you increase the monthly carrying costs for a real estate asset, then in like kind, you need to expect the underlying value to decrease. But we've been pretty fortunate that we've been pretty resilient in that the median [home price] hasn't changed a whole lot."
According to Benn, Fannie Mae, a government-sponsored enterprise that buys mortgages from lenders and bundles them into mortgage-back securities that then are sold the investors, will not buy loans for properties in buildings that do not have 100% replacement hurricane insurance.
That means buyers may not be able to get mortgages for units in buildings without full coverage, which may also limit people’s ability to sell units they already own. It also increases the maintenance fees in buildings that have acquired the required insurance. Benn says some policies have increased tenfold.
The number of single-family homes for sale also has grown a bit, with about 3.5 months of inventory, when the norm is about 2 months, he said.
Benn said the single-family home market seems to be "a little more stable than condos right now."
"People who have condos are concerned about the carrying costs," he continued. "It's not just the hurricane insurance, but your maintenance fees are going up because of pipe replacement, because of fire sprinkler suppression systems they want to see installed after the Marco Polo fire [which killed four residents and a dog in 2017]. Our statistics show that maintenance fees have gone up about 60% over the last 10 years in the buildings that we can track through the MLS. We also have about 178 buildings that have special assessments."
But any real estate agent selling condos right now, "will tell you that they're taking longer to sell, but interestingly, the prices have been holding, so that's interesting."
Benn sums it up: The condo market is feeling pressure due to higher carrying costs from increased maintenance fees and hurricane insurance. Residents will have to determine their own situations, but if you're looking for a condo, it's "a good time to get something for a good price."
There were 805 single-family homes for sale islandwide in April, compared to 618 in the same month last year, an increase of 30.3%, according to HBR. And there were a total of 2,512 condos for sale last month compared to 1,575.
Popular areas
‘Ewa Plain was the most popular area for buyers in April, with 30 sales. That number was down from 52 the prior year.
Meanwhile, Mākaha-Nānākuli saw 24 sales and Kailua-Waimānalo had 22. Both of those neighborhoods had 26 sales in April 2024.
Waikīkī had the most condo sales in April with 88, down from 107 in April 2024, followed by 49 in Ala Moana-Kaka‘ako, down from 52.
Benn says buyers choose neighborhoods based on their own specific needs.
"If you work in town and you need to be somewhere between Nu‘uanu and ‘Āina Haina, you're not even looking at something that comes on the market in Waipahu."
When asked about the neighborhoods that saw the most sales, Benn said in ‘Ewa, for instance, "You've got military and locals that are seeing the value of having malls and hotels and water parks and all the stuff you need to have a viable second city — sort of the Orange County to [Los Angeles] kind of idea — and that is coming to fruition."
That area also is a draw "because there's inventory and there's amenities. If you have family near there, you're going to gravitate towards there. If your work is out there, for sure, you're going to gravitate towards that," Benn said later in the conversation. "Also the price points are more reasonable than town, so there are certain markets that are the exception to the rule. Most people that work in metro Honolulu want to live in metro Honolulu, but sometimes their options are to decide between a small condo versus maybe a starter home, single-family, and they may choose to instead go to Mililani Mauka or [developments] in ‘Ewa Beach. That's a trade-off because they're deciding that they're willing to spend more time on the road."
Interested in learning more about housing activity in specific neighborhoods? You can read the full local market update here.
Stephanie Salmons can be reached at stephanie@alohastatedaily.com.
