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Market Update

Monthly Market Update

Month-to-Month Change: Compares change from Apr. 2024 to May 2024

Team Alaka'i Market Update.gif

O‘ahu Real Estate Market Insights:

May 2024 Monthly Stats Report

In the dynamic world of O‘ahu's real estate, we have some important updates to share with you. Despite the paradise we call home, recent trends show shifts in the market due to rising mortgage rates. Here's a snapshot of what's been happening:

Single-Family Homes:

  • In May 2024, the number of single-family home sales was 249 reflecting a 5% decrease compared to last month.

  • The median sales price for single-family homes decreased by 1.4% compared to April 2024 at $1,085,000.
     

Condominiums:

  • In May 2024, the number of condo sales was 478 reflecting a 10.9% increase compared to last month.

  • The median sales price for condos decreased by 6.3% compared to last month, reaching $495,000.
       

Market Trends:

  • Single-family homes have a median of 14 days on the market, a 17.6% decrease from April 2024. While condos marked a median of 25 days on the market in May 2024, a 13.8% decrease from April 2024.
     

Mortgage Rates:

  • Mortgage rates are still fluctuating in the 7% range with the highest being 7.34% at the end of May.
     

Pricing and Sales:

  • Around 33% of single-family home sales closed above the asking price compared to 25% in April 2024.

  • In the condo market, 15% of sales closed above the asking price a decrease compared to 22% in April 2024.
     

Price Ranges:

  • Single-family homes in the $899,999 and below range accounted for 28% of sales for the month of May.

  • In the condo market, units in the $300,000 to $399,999 range surged by 43.6%

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Navigating the Market:

  • A trusted, knowledgeable REALTOR® is your best guide in this market. Opportunities exist for homeowners and first-time buyers despite the financing challenges.
     

New Listings and Inventory:

  • New listing volume decreased by 1.1% for single-family homes compared to the previous month, while condos have increased by 0.3%.

  • Active inventory showed that single-family homes increased by 3.6% and condos are up 4.8% compared to the previous month.

While these market dynamics present challenges, opportunities abound for those ready to make their move in O‘ahu's real estate landscape. For personalized guidance and insights, don't hesitate to reach out to Team Alaka'i. Subscribe to our newsletter to stay updated on the latest developments.

Single Family Homes

Statistics

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Condo/Townhome

Statistics

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June 2024 Mortgage Market Update:

Sunny Outlook for Interest Rates Faces a Major Test

Interest Rates and Market Sentiment

This week, there was a generally positive sentiment surrounding interest rates. Investors and market watchers were inclined to focus on news that supported a favorable outlook for rates, while attempting to minimize the impact of less favorable information.

The Nonfarm Payrolls Report: A Crucial Indicator

However, this optimistic predisposition faced a significant challenge with the release of the week's most important economic report: the Nonfarm Payrolls (NFP). As the headline component of the Labor Department's Employment Situation report, NFP is a critical indicator of the health of the job market. Although there are several reports related to employment, NFP stands out in importance. This time, it reported a much higher-than-expected figure.

Surprising Job Growth Numbers

While recent trends have shown a range-bound job market, Friday's NFP result was a notable exception. The report revealed an addition of 272,000 jobs, significantly surpassing the median forecast of 185,000 and well above the previous month's reading of 165,000. This substantial "beat" suggests a robust labor market that could potentially complicate efforts to curb inflation.

Implications for Inflation and Interest Rates

A strong labor market typically translates to more jobs, increased income, and higher consumer spending, all of which can contribute to inflation. As a result, the bond market's previously sunny outlook was overshadowed by this significant economic development, leading to a rise in mortgage rates.

 

A Silver Lining in the Rates Landscape

Despite the increase in rates on Friday, there is a positive aspect to consider. The rise in mortgage rates was not drastic enough to reach last week's highs, let alone the peaks observed at the end of April. This resilience can be attributed to the bond market's tendency to prioritize inflation data and the Federal Reserve's interpretation over other economic indicators when assessing the trajectory of interest rates.

Looking Ahead: Key Economic Events

The coming week promises to be highly eventful, with the potential to influence market sentiment significantly. On Tuesday, the Consumer Price Index (CPI) will be released. This report has been the most influential economic indicator on a monthly basis, often surpassing the impact of the Employment Situation report. Following the CPI, Wednesday will bring an updated "dot plot" from the Federal Reserve, showcasing each member's projections for the Fed Funds Rate in the coming years. Additionally, the Fed will release a policy statement, although no changes in rates are expected this time. The market's reaction will likely hinge on the dot plot and Fed Chair Powell's press conference, scheduled 30 minutes after the policy statement release.

Conclusion

The positive outlook for interest rates encountered a significant hurdle with the surprising job growth reported in the NFP. While this development led to a rise in mortgage rates, the overall impact was moderated by the market's focus on upcoming inflation data and the Federal Reserve's guidance. As key economic events unfold next week, market participants will be closely watching for any signs that could influence the future direction of interest rates.

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