At Hawaii Living we display a lot of Oahu real estate statistics. From our homepage to our search result pages (ex: Oahu condos for sale page) and all data is pulled from the Oahu MLS.
Real estate statistics is important to review and analyze for both buyers and sellers. However, it is important to analyze statistics from the right perspective and understand some data may not always be that relevant and sometimes even somewhat misleading.
Good to Know About Oahu’s MLS Statistics
New Developments: Sometimes developers upload sold properties to the MLS after a project is complete and buyers have officially & legally taken ownership (examples: Waiea, Anaha, Park Lane) and other times developers do not upload sold properties to the MLS (example: Ritz-Carlton Waikiki, The Collection, Keauhou Place). In the ladder case – developers not uploading sold properties to the MLS – sold data is missing from the MLS data and in the former case – developers uploading to the MLS – the large amount of data uploaded to the MLS within a short period of time can create a false impression of values within a neighborhood, the year the data was uploaded. For instance, Park Lane Ala Moana – a luxury condo in the Ala Moana neighborhood – was completed in 3 phases year 2017 and all 180+ units officially sold by the developer year 2017 were uploaded to the MLS year 2017. That means year-to-date (through Dec 21, 2017) the median condo sales price in Ala Moana is a whopping $1,584,000 compared to just $305,000 for year 2016, which doesn’t really reflect median value in Ala Moana condos.
PS! Next year – 2018 – I am sure we won’t see 100+ luxury condos selling in Ala Moana and the median sales price for condos in Ala Moana will therefore surely be well below year 2017 level.
Days to Sell: It used to be that Oahu real estate agents had to select “Active Continue to Show” or “Pending” when a property went into escrow (under contract, but not yet sold). The idea was for agents to select the “Active Continue to Show” status when the agent was still showing & marketing the property and further change to “Pending” once the agent was no longer showing & marketing the property. However, a significant number of agents would select “Active Continue to Show”, even though they weren’t showing & marketing a property.
The terminology changed this year – 2017 – and agents now have to choose between “In Escrow – Showing” and “In Escrow – Not Showing” when a property goes into escrow. With this new terminology, a much larger number of agents have been selecting “In Escrow – Not Showing” earlier in the transaction process than the number of agents who used to select “Pending” when that was the wording and this has significantly impacted the days on market count. Why? Because the days on market stops counting from the moment a property is listed as “In Escrow – Not Showing” – formerly “Pending”. Because real estate agents have been more inclined to use the “In Escrow – Not Showing” status earlier in the transaction process (as opposed to the old “Pending”), it makes it very hard to compare this year’s days to sells vs previous years. For instance, single-family homes sold in Honolulu shows a median of 72 days to sell for year 2016 and dropped to just 22 days for year 2017 (through Dec 21, 2017). Honolulu homes for sale aren’t selling at that much faster a rate – if a faster rate at all – but the MLS data indicates otherwise.
Also, when new developments are uploaded to the MLS it will often show as 0 days to sell. A buyer of a new condo may have signed a purchase agreement 3 years earlier, before construction even started, but when the buyer officially takes ownership – 3 years later – the developer uploads the sale to the MLS and it shows 0 days to sell – not a very good representation of reality. Let’s take Kakaako condos as an example: Year 2015 the median days to sell was 77 (no new condo developments completed), year 2016 the median days to sell dropped to 51 (many developer sold Waiea units uploaded to the MLS) and year 2017 the median days to sell was just 14 (a bunch of Anaha developer units uploaded to the MLS).
Days on Market: A property may have been listed for sale in the MLS for hundreds of days, then the property is taken off the market for a short while, and as it is re-listed it shows as a new listing. An agent is allowed to take a property off the market and then re-list that same property 14 days later with a new MLS number and a new MLS number means it is considered a brand new listing and the days on market count starts all over.
PS! We display each property’s recent history so you can see – among other things – if the property has previously been listed for sale.
Leasehold: We estimate, as of writing, that somewhere around 5% of Oahu properties are leasehold – properties where your rights to the property has an expiry date – and that can really skew data. For instance, Waikiki has a larger number of leasehold condos – close to 50% of all Oahu leasehold properties may be in Waikiki – and if we calculate Waikiki’s year-to-date (through Dec 21, 2017) median sales price it comes to about $390,000. However, excluding leasehold data and the median sales price is year-to-date (through Dec 21, 2017) $454,000.
Good to Know About Statistics in General
Lack of Data: If only few properties have sold within a neighborhood it may be difficult to conclude a lot statistically. For instance, let’s assume within a 1 year period 3 homes sold in a neighborhood – 1st home sold @ $1M, 2nd home sold @ $4M and 3rd home sold @ $4.2M. That gives us a median sales price of $4M. However, if we objectively tried to determine the market value of all homes within this neighborhood (let’s say the neighborhood has 100 homes) the median price may likely be much different.
Sold Price to List Price: A condo building, neighborhood etc may show sold price to list price ratio as 98.5%, which is good to know. However, if a property is listed for sale at $1,000,000 that doesn’t by default mean the market value is about $985,000 (98.5% of $1,000,000), especially not if a comparable property just sold for $900,000.
Average vs Median: We often prefer to use median as opposed to average. Median being the middle figure and average being the average of all figures. Example: In a neighborhood 1 condo sold for $1,000,000, a 2nd condo sold for $2,000,000 and a 3rd condo sold for $10,000,000. The median price in the neighborhood would be $2M, whereas the average would be $4.33M. This would possibly be a rather rare case, but the bigger point being that analyzing median data set may in many cases make more sense to review, as extreme outliers won’t impact the analysis as much as averages would.
A lot of valuable information can be absorbed from analyzing statistics and that’s why we display so much statistics here on our website. The purpose of this post is merely an attempt to outline some ‘please keep in mind’ points when reviewing and analyzing statistics for Oahu real estate.
Feel free to leave comments or questions below – thank you.
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