Hawaii Real Estate
Hawaii Real Estate
Year in Review (2023)
What a year! In 2023, we rose to become one of the world’s top podcasts. So, in this episode, we review 2023 and preview what's to come.
YEAR-IN-REVIEW (2023)
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1259 Aʻala Street, Suite 300
Honolulu, HI 96817
Phone: (808) 733-7060
Email: HAR@HawaiiRealtors.com
Introduction
E komo mai. Welcome to Hawaiʻi Real Estate, a poducast on the buying, selling, and leasing of property in Hawaiʻi. Each episode of our podcast consists of a Real Data Report, which analyzes Hawaiʻi’s most recent real property data, and a Focus Piece, which provides legal and other special insight into a matter of major and contemporary concern for Hawaiʻi real estate transactions.
The Hawaiʻi Real Estate podcast is produced by the Hawaiʻi Association of REALTORS®, with support from its Legal Kokua program. New episodes of the podcast are released on the first Wednesday of each month.
Today is Wednesday, January 3, 2024. In this episode, we review 2023, and I’m happy to report that in 2023, Hawaiʻi Real Estate rose to become one of the world’s top 25% podcasts.
Although we will be off next month, please be sure to join us in March, when we will give you the latest Hawaiʻi property data and discuss the federal civil action currently pending in the Middle District of Tennessee against RealPage, the popular pricing software program used by landlords and property managers. The Department of Justice filed a statement of interest in that case last November arguing that RealPage engages in illegal price collusion by relying on an algorithm to guide landlords and property managers in setting rental unit prices.
If RealPage loses the case, there could be profound changes in how landlords and property managers price rental units. It could also have broader implications for whether pricing software can be used at all to help different businesses set their prices.
So tune in this March for our special look at the lawsuit against RealPage and learn how it could affect your business this year.
But for now, it’s time to look back. Here is our 2023 Year-in-Review.
Real Data Report
Inventory
New Listings
The United States saw an increase in new listings over the past year, rising from 294,908 in November 2022 to 316,990 in November 2023, marking a 7.49% increase in new listings throughout the country. Contrary to the national trend, Hawaiʻi experienced a decrease in new listings. Hawaiʻi new listings decreased from 1,346 to 1,256 from November 2022 to November 2023, a 6.69% decline. The increase in new listings in the U.S. overall suggests a potentially growing real estate market, but the decrease in Hawaiʻi and particularly in the City and County of Honolulu reflects challenges felt over the past year.
Active Listings
U.S. active listings slightly increased last year from 749,745 to 754,846, a modest growth of 0.68%. Unlike new listings data, where Hawaiʻi and the U.S. were on different trajectories, Hawaiʻi active listings are, like U.S. active listings up. The active listings in Hawaiʻi last year rose from 3,473 to 3,611, a 3.97% increase. The rise in active listings across Hawaiʻi last year reflects the slow sales rate.
Median Days on Market.
As for median days on the market, in the United States, the median days a home stayed on the market last year decreased from 55 days to 52 days, a reduction of 5.45%. In Hawaiʻi, the median days on market slightly increased, from 61 to 62 days, a 1.64% rise. The decrease in median days on the market in the U.S. contrasts with the slight increase in Hawaiʻi, indicating faster sales nationwide but a slightly slower pace in Hawaiʻi.
Prices
Despite the increased inventory, home prices last year did not decline. In the U.S., the median price for a home rose from $416,000 in November 2022 to $420,000 in November 2023, a moderate increase of approximately 0.9%. Hawaiʻi median home prices also increased last year. The median price for a home in Hawaiʻi in November increased from $847,500 in November 2022 to $849,500 in November 2023, an increase of approximately 0.24%.
Average listing prices last year increased more dramatically. The average listing price of a home in the United States increased from $698,588 in November 2022 to $742,884 in November 2023, a 6.3% increase. Likewise, average prices in Hawaiʻi increased from $698,588 in November 2022 to $742,884 in November 2023, another 6.3% increase. That the average price for homes increased significantly relatively to the median price for homes suggests that higher-end properties are holding up the market.
Interest Rates, Inflation, and Mortgage Rates
Interest rates last year continued their upward climb, but showed signs of slowing and reversing. The Federal Funds Effective Rate climbed from 3.83% on December 1, 2022 to 5.33% on December 1, 2023, a radical increase over that year of 32.75%.
Last year’s interest rates kept rising because inflation kept outpacing the Federal Reserve’s target rate of 2%. The Personal Consumption Expenditures Price Index, the Fed.’s favorite measure of inflation, kept showing unacceptably high month-over-month increases in inflation. So, to tampen [sic] that inflation, the Fed raised interest rates—over and over, again.
Towards the end of 2023, however, inflation began to slow. The Personal Consumption Expenditures Price Index in August 2023 increased over the prior month by 3.3%, but in September 2023, the same index increased by 3.4%; in October 2023, only 2.9%; and finally November 2023, 2.6%. And so the long climb in federal interest rates finally halted.
Average mortgage rates in the U.S. have responded. After peaking on October 26, 2023, the average 30-year fixed rate mortgage average has fallen from 7.79% to 6.61% and the 15-year fixed rate mortgage has fallen from 7.03% to 5.93%. Both the average 30-year fixed rate mortgage and average 15-year fixed rate mortgage have fallen over 63 days by 15%.
Those lowering mortgage rates have not yet appreciably affected the number of active and new listings or the median price of those listings, but there is no question that tide is running in the right direction.
Conclusion
And this our episode. Remember: we’re off next month. But please join us the first Wednesday of March for our discussion of the pending civil action against RealPage.
Mahalo for helping us become a top 25% podcast. A hui ho.
