AGENT MLS HOME FINDER

The Oahu real estate market, which encompasses the suburban and rural regions of the island in addition to the large city of Honolulu, saw a downturn in sales volume and median price in March 2011, as well as increased vacancies in office space and continually high rates of foreclosure. According to statistics released by the Honolulu Star Advertiser, the median sales price of a single family home on Oahu in March 2011 was $548,500, marking a substantial decline of nearly nine percent from the $600,000 figure recorded in March 2010. Despite this drop in sales price, there were two and a half percent fewer single family homes purchased in March compared to year ago levels – falling from 255 in 2010 to 249 in 2011. Condominiums showed a year over year uptick in median price between 2010 and 2011, but a month over month decrease compared to February 2011. There were substantially fewer condos sold in March 2011, declining more than eight percent relative to the same time last year. Interestingly, the best performing part of the market was at the upper end, where investors and potential residents continued to take advantage of low interest and mortgage rates.

Foreclosures in Hawaii continued to comprise a substantial percentage of home sales, and consequently also depressed median price. One study indicated that the average foreclosure was sold for less than two-thirds of the median sales price of Oahu, a figure which may change as the considerable quantity of ‘shadow’ properties gradually makes its way onto the market. On the other side of the market, the Oahu office space market continued to experience higher rates of vacancy throughout the first quarter of 2011. This period represented the fifth straight quarter of increased vacancy, as the vacancy rate rose from 11.8 percent to 12.1 percent. According to figures released by the Honolulu Star Advertiser, vacancies were largely centered around the Kalihi area, while the business center of Honolulu actually gained some tenants. Rising electricity charges, which are related to the skyrocketing price of oil, may continue to boost rates of vacancy despite some experts’ tentative optimism moving into the next quarter.