LIHU‘E — A woozy housing market couldn’t get off the ropes in May, as home sales sank more than 41 percent on Kaua‘i amid a backdrop of lofty interest rates that have significantly raised the cost of buying a home.
Sales of single-family residences dropped to 30 in May from 51 in May 2022, according to monthly data pooled from multiple sources by the Hawai‘i Association of Realtors in Honolulu. That marked a decrease of 41.18 percent.
At the same time, the median price of a home climbed 10.19 percent to $1,125,000 from $1,021,000.
Despite the rocky market conditions, there is some optimism on the home sales side provided sellers are willing to temper expectations.
“You know what — I’m still seeing if a property is priced right, it will sell,” said Jimmy Johnson, broker in charge at RE/MAX Kaua‘i.
He pointed to a single-family home transaction in Wailua Homesteads, which came on the market at $1.8 million. One week later, the residence sold for $1.7 million.
“A nice, super-clean house on 6.5 acres,” Johnson said.
The condominium market on Kaua‘i wasn’t much better in May, as evidenced by a 36.59 percent drop in sales to 26 from 41. On the bright side, at least for buyers, the median price retreated 23.03 percent to $615,000 from $799,000.
Neighbor islands
Single-family home sales also dropped on the three major neighbor islands.
O‘ahu posted a 23.84 percent decline to 262 in May from 344 in May 2022, while the median price eased 3.86 percent to $1,109,000 from $1,153,500. At the same time, condo sales decreased 36.34 percent to 438 from 688, while the median price slipped 2.23 percent to $505,000 from $516,500.
Hawai‘i Island recorded a 30.63 percent drop in home sales to 188 from 271, while the median price eased 1.20 percent to $495,000 from $501,000. Sales of condos were down 41.84 percent to 57 from 98, while the median price was off 1.21 percent to $550,000 from $556,750.
Maui home sales dropped 26.00 percent to 74 from 100, while the median price rose 4.87 percent to $1,271,500 from $1,212,500. Sales of condos plunged 42.86 percent to 88 from 154, while the median price jumped 16.70 percent to $835,000 from $715,500.
Interest rates
Home and condo sales have tanked across the Hawaiian Island chain, in large part because of higher costs associated with financing a purchase.
Long-term mortgage rates have been well above 6 percent for months, with the 30-year rate weighing in at 6.71 percent in the one-week period ended Thursday, June 29. That was up from 5.70 percent in the same period a year earlier, according to weekly data from Freddie Mac, the Virginia-based mortgage giant.
The 30-year mortgage is the most popular form of home financing. But upward swings in long-term rates can add hundreds of dollars a month in financing costs depending on the sale price of the home.
The 15-year mortgage rate came in at 6.06 percent in the one-week period ended Thursday, June 29, compared with 4.83 percent in the same period a year ago.
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Wyatt Haupt Jr., editor, can be reached at 808-245-0457 or whaupt@thegardenisland.com.
