The "booming housing market is stalling out," said David Harrison and Nicole Friedman in The Wall Street Journal. Trapped between near-record prices and soaring mortgage rates, buyers are pulling back. In July, figures released last week show, sales of existing homes slipped by 5.9 percent — a sixth straight month of decline. Sales of newly built homes fell even more, declining 12.6 percent for the month, and down nearly 30 percent from a year ago. "Homebuilding is also drying up, and mortgage applications are falling." Housing has seen prices advance relentlessly, rising 46 percent nationally in just the past three years. Now home affordability is the lowest it has been since 1989, and the market has turned quickly. The one reason prices remain high is that "years of depressed new-home construction following the 2007–09 recession have left the housing market undersupplied."

Will home prices just "flatten" out, or "collapse"? asked Jonathan Levin in Bloomberg. Both the industry and economic policymakers think it's likely to be the former. The Fed wants to make housing more affordable, and bring home price increases down to 5 percent a year. But this is "treacherous territory," and once prices start slipping it's hard to predict where they will end up. Less than six months ago, home values in California were surging. Then San Francisco and San Jose saw steep declines. A few other markets, like Austin and Seattle, followed. Now prices are falling in 22 of the 100 biggest U.S. markets. Americans are less indebted now than they were during the mid-2000s housing crisis, "which means there probably won't be a round of forced selling." But "a lot of things have to go right" to avoid a broad fall in prices. Homeowners and brokers are being too optimistic, said Jonathan Ponciano in Forbes. Homebuilders, who may have the best insight into demand and costs, are much less confident. Close to one-fifth of them have "slashed prices to help bolster sales or limit cancellations." This is starting to look more and more like a "housing-market recession."

Sales of O‘ahu Homes Return to Pre-Pandemic Levels

Median sales price for condos dips to under $500,000

More than 300 single-family homes and more than 500 condos sold in August, which is near pre-pandemic annual average closed sales per month for single-family homes and above average for condos. Median sales prices remained on pace with recent months, with August’s single-family home median sales price rising 7.2% year-over-year to $1,125,500 and the condo median sales price marking a nominal decline of 0.3% to $498,500.

“As market activity continues to slow with the rise in interest rates, it’s important for buyers to remember that homeownership is still possible,” said Chad Takesue, president of the Honolulu Board of REALTORS®. “More than 250 properties on O‘ahu, most of which were condos, sold for under $500,000 last month.”

While new listings fell 17.2% for single-family homes and 15.7% for condos, active inventory increased 43.3% for single-family homes and 12.9% for condos, though this lags behind pre-pandemic levels. A larger share of new listings remained active at the end of the month – 61% compared to 46% last August for single-family homes and 59% compared to 48% for condos – which is another indication of the cooling market. In both markets, properties that sold in August were on the market for a median of 13 days.

Here is more detail about the O'ahu market in general, but please reach out to me if you want more specific information about a region or neighborhood.