Like every other sector of the economy, residential home sales froze at the start of the Covid-19 pandemic. But unlike nearly every other sector, they’ve roared back to record-setting heights.
It was an ordinary house in Niu Valley, 57 years old and due for some updates. When Coldwell Banker Realtor Tommy Kim listed it for $1.25 million — yes, million — 92 groups of people, standing the required six feet apart, lined up down the street for showings.
He received 17 offers, all for more than the asking price.
That’s the current housing market, driven by low interest rates and limited inventory, and, in part, an influx of wealthy buyers participating in the work-from-home-from-anywhere phenomenon. Real estate records are being broken.
For example, the median price of a single-family home on Kauai topped $1 million dollars earlier this year for the first time. This is partly due to the effect on the median value of high-end properties and Kauai has seen two home sales this year of more than $10 million each.
But as the Niu Valley example shows, these median prices aren’t just being skewed by high-priced mansions, but by extreme competition for even unremarkable houses.
Economist Paul Brewbaker notes that, “In 2019, fewer new housing units were authorized on Oahu than in 1928.” In 2020, there were just 1,200 units authorized. These are historically low levels of home production that are contributing to the shortage that is driving up prices.
