Oahu real estate March Sales Statistics (again)

There are so many numbers on the monthly statistical report that it's hard to know exactly which ones are the most important. Is it the median price of all single family homes on the entire island of Oahu? That number is very broad, and perhaps an indicator, but not very helpful for understanding if a particular area is doing well or not.

It's also not helpful for understanding whether prices are rising in Honolulu real estate, because it could just be that cheaper homes sold while more expensive homes sat, even if their prices rose.

Then there's the amount of inventory, the number of sales, the number of months of available housing, the number of new listings in each neighborhood, the days on market of homes and condos in Oahu, and of course, the average price, which is different than the median price.

The most helpful numbers seem to be always very specific. If you have a house in Kailua and you want to know its value, it's more helpful to know how many homes sold and the actual prices of the properties than anything else. The median price can be way off if just a few large properties sold on Kailua Beach, or if several small properties sold all at once.

In fact some of the numbers on the Honolulu Home Sales Statistical report can be completely opposite of each other, depending on how you view them. For instance, in Aina Haina this March, the median price was $1million even, with 7 sales, which is up from last March's $990k. However, year to date the median price is $895k, which is down 22% year to date compared to 07 year to date.

So is the market in Aina Haina up or down? These summarized numbers are not helpful at all in knowing the answer. The answer can only be known by looking at the individual sales, the size of the homes, the quality of the properties, etc. Suppose that the median price went down, but all the sales were tiny little tear down shacks. In that case, a nicely remodeled larger house with an ocean view might sell for $100k more than it would have last year, even though the median sales prices in the area are down.

Another factor is that some months you might have very few sales, which can dramatically effect the median and average prices. For instance, in Honolulu, 57.1% more homes sold in March of this year than last year. But that's because only 14 homes sold last March compared to 22 this March. Is that really a huge rise? Not as huge as 57.1% makes it sound. Year to date, the number of sales is actually down 10%, so the monthly numbers are pretty deceiving.

I could walk around and tell people that Honolulu home sales are up 57% since last year, which is true, but not the whole story. Prices are up 4% year to date, which is probably the most helpful number in this case.

So when you hear people throw around statistics, you have to know what they mean, how to interpret them, and their context. Knowing the entire market is the only way to really understand how things are going.

And that's why it's a full time job selling houses...