Oahu's housing market is near the end of what is almost certain to be a year where fewer people bought homes.
The Honolulu Board of Realtors has released data for November, and the report included double-digit decreases in sale volume for both single-family houses and condominiums.
This kind of double-barreled slowdown hasn't occurred since 2014, which was the last time there was an annual sales volume decrease.
In November, the number of single-family home sales dropped 13.3% to 288 from 332 in the same month last year. Condo sales dropped 14.4% to 429 from 501 in the same period.
For the first 11 months of the year, single-family home sales are down 5.6% while condo sales are down 2.3%. So barring an unexpected dramatic surge in sales this month, 2018 will end three consecutive years of sale volume growth that ranged roughly from 5% to 6.5% each year for single-family homes and from 4.5% to 8.5% for condos.
Downward pressure on sales recently is coming from rising prices combined with rising interest rates.
Oahu single-family homes sold in November for a median $797,000, which was up 3% from $773,500 in the same month last year. The condo median sale price was $420,000 last month, up 3.7% from $405,000 a year earlier.
The median price is a point at which half the sales were for a higher price and half for a lower price.
The record median sale price for any month was $812,500 in September for single-family homes and $435,000 in March for condos.
This year through November, median prices are $790,000 for single-family homes, up 4.2% from $758,000 in the same period last year, and $425,000 for condos, up 4.9% from $405,000.
Interest rates also have been rising. The average rate for a 30-year fixed-rate mortgage last week was 4.75%, up from 3.94% a year earlier, according to Freddie Mac.
As prices and interest rates rise, fewer people can afford the inventory that's available.
Local economists noted recently that personal incomes on average in Hawaii have been rising faster than home prices in recent years, making the relative affordability of homes today better than it was a decade ago when also considering interest rates.
Still, over the past year it's become more challenging for many buyers to make a purchase even though available inventory has grown.
Scott Higashi, president and CEO of local residential real estate brokerage firm Locations, said in a recent report that the continued rise in median sale prices over the past 12 months shows that pent-up buyer demand and competition still exist in the market.
"Median home and condo prices rose at a steady rate this period — a reflection of pent-up demand and continued competitive market conditions," he said.
Darryl Macha, Honolulu Board of Realtors president, said in the trade association's report that the sales volume decline last month was part of what he considers a market that continues to "normalize."
Macha also noted that inventory listed for sale is up 28% for single-family homes and 14% for condos this year but that more inventory at lower prices is needed.
"Though when you consider the overall conditions including more selection, continued low interest rates and a stable economy, it's a favorable time for buyers to purchase a home," he said.
More buyers, however, don't appear to see it that way.
Sales counted in the board's report reflect purchases completed in November that typically stem from contracts signed one to three months earlier.
The number of sales pending in November but not completed was dramatically lower than a year earlier: 405 compared with 508 for single-family homes and 574 compared with 727 for condos.
