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Home sales sink at end of summer, median price rises

LIHU‘E — A stagnant local housing market showed no signs of recovery in the final month of summer, as home sales plunged amid a backdrop of lofty mortgage interest rates.

Sales of single-family homes on Kaua‘i dropped to 16 in September from 28 in September 2022, according to monthly data pooled from multiple sources by Hawai‘i Realtors in Honolulu. That marked a decrease of 42.86 percent in the period.

At the same time, the median price of a home climbed 20 percent to $1,185,000 from $987,500. The median price is the point where half of the homes sell for more and half sell for less.

“No inventory and terrible interest rates — a great combination,” said Jimmy Johnson, who is broker in charge at RE/MAX Kaua‘i, on the state of the island’s single-family housing market.

The condominium market was slightly more inspiring with sales of 26 in September, although that was unchanged from 26 in September 2022. In the same period, the median price retreated 12.88 percent to $565,000 from $648,500.

Neighbor islands

Maui was the only one of the four major islands to post an increase in single-family home sales and the median price in the final month of summer. Single-family home sales climbed 13.7 percent to 66 in September from 58 in September 2022, while the median price jumped 27.30 percent to $1,294,500 from $1,016,850.

But condo sales tanked 32.65 percent to 66 from 98, while the median price slipped 1.31 percent to $789,500 from $800,000.

O‘ahu posted a 16.55 percent decrease in single-family home sales to 232 in September from 278 in September 2022, while the median price eased 4.55 percent to $1,050,000 from $1,100,000.

Condo sales fell 24.19 percent to 376 from 496, while the median price was up 5.97 percent to $532,500 from $502,500.

Hawai‘i Island recorded a 22.44 percent decline in single-family home sales to 159 in September from 205 in September 2022, while the median price was unchanged at $530,000.

Condo sales increased 12.00 percent to 56 from 50, while the median price was unchanged at $620,000.

Interest rates

The island chain housing market is being hurt, in large part, by the mortgage interest rate environment, which is less than pleasant for anyone looking to finance a home purchase.

The 30-year, long-term rate, which is the most popular form of home financing, came in last week at its highest in more than 20 years.

The 30-year rate stood at 7.79 percent, as of Thursday, Oct. 26, up from 7.63 percent on Thursday, Oct. 19, according to Freddie Mac, the Virginia-based mortgage giant. A year earlier, the 30-year rate stood at 7.08 percent.

The 15-year, fixed-rate mortgage weighed in at 7.03 percent, as of Oct. 26, up from 6.92 percent on Oct. 19. A year ago, the 15-year rate stood at 6.36 percent.

The increase in rates can add hundreds of dollars to a monthly mortgage, in turn making it much more expensive for would-be homebuyers to break into a market, particularly one as expensive as the island of Kaua‘i.

“Rates have risen two full percentage points in 2023 alone and, as we head into Halloween, the impacts may scare potential homebuyers,” said Freddie Mac Chief Economist Sam Khater on Oct. 26.

“Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory.”

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Wyatt Haupt Jr., editor, can be reached at 808-245-0457 or whaupt@thegardenisland.com.
Source: The Garden Island

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