2012 in Oahu Real Estate went on record as one of the strongest seller's markets in a long time.  The median home price for at the end of 2012 was $620,000, up 7.8% since last year, while condos were at $317,500, up 5.8%.

A year ago, Oahu median home prices were just $575,000, and median condo prices were at $300,000.  The number of sales increased as well, up 6.5% or homes and 8.2% for condos compared to all of 2011. Hawaii house

The main factor driving up prices is the lack of inventory, with only 2.5 months of home inventory in Oahu. This led to sellers receiving an average of 97% of their asking price in 2012, as compared to 95% in 2011.

But most people want to know where the market is going in the future, not where it was in the past.  What will 2013 look like?  I have a few predictions for 2013. By the way I've been right every year for 10 years, including the down years. In April 2009, I called the bottom of the Oahu real estate market, and it's up 15-20% since then. 

The Oahu real estate market in 2013:

  • Inventory will increase a little bit, leading to prices being more stable and not increasing as quickly as last year.  I predict a 10-15% increase in inventory, mostly due to the banks pushing foreclosures through the courts again.  In 2012, there were almost no foreclosures as banks had to figure their way through Act 48
  • The number of sales will increase almost proportionately to the increase in inventory, which means that prices won't rise as quickly.  
  • Prices will rise around 1-2% for 2013.  In 2012, the average house took 34 days to sell.  In reality, a nice house in a nice neighborhood sold in a day or two if priced correctly.  I had many listings with multiple offers, even though they were well over $1 million. However in 2013, I think that will slow slightly by about the end of summer, which will lead to prices rising slower than last year. 
  • I predict we will finish the year with homes selling in an average of 40-45 days. 
  • Sellers will still get about 95-97% of their asking prices.  It's still going to be a seller's market, because inventory will continue to be low by historical standards.  We currently still have crazy low inventory, and a slight increase won't change the market because of continuing high demand and the increase in military presence coming this year. 

At the end of 2013, it will be a more balanced seller's market, and buyers will wish they had bought sooner.  One thing is for sure - if you own a Hawaii home in 2013, your mortgage will have been paid down for one more year, which means no matter what you will have banked some money.