Oahu Home Sales

The Honolulu Advertiser reported on Friday that the mild weakening of O’ahu home prices that has emerged this year should continue for at least two more years, according to a new local economic forecast that predicts an 11 percent median price drop over three years.

A lot of factors, including where interests rates may move and the future health of the local and national economies, lend uncertainty to where O’ahu home prices will move.

But if the projection by the University of Hawai’i Economic Research Organization is on the mark, the median price of previously owned single-family homes on O’ahu in 2010 would be about $570,000 — $70,000 below last year’s presumed peak of about $640,000 and $20,000 below the median price in 2005.

In the forecast update published today, UHERO predicts a 3.6 percent decline in the median home price this year, followed by a 5.2 percent decline next year and a 2.6 percent decline in 2010.

UHERO said such a change would still be a relatively modest decline compared with Mainland housing markets, but is worse than the organization was forecasting in a March report. In March, UHERO forecast a 3.2 percent decrease in home prices this year, followed by a 2.3 percent drop next year.

This year through August, the median price is down 2.8 percent to $629,000, according to the Honolulu Board of Realtors, which tracks sales differently than UHERO to arrive at slightly different median price figures.

UHERO said the degraded view of home prices is driven by continued turmoil in credit markets, weak housing demand and growing unemployment.

The following charts were provided:

This entry was posted on Friday, September 5th, 2008 at 11:50 am and is filed under For Buyers, For Sellers, Market Watch, Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.