Home prices were consistently up again in most markets in 2018 but at reduced levels compared to recent years. High demand for few homes for sale fueled price increases, but the evidence is mounting that inventory will finally improve in 2019. This may apply some downward pressure on prices for beleaguered home buyers. A fourth interest rate hike by the Federal Reserve in 2018 spooked the stock market to close out the year. The Fed has indicated that the number of rate increases in 2019 will be halved, which may be of little comfort to an already compressed consumer.
New Listings decreased 16.1 percent for Single Family homes and 1.7 percent for Condominium homes. Pending Sales decreased 3.8 percent for Single Family homes but increased 5.6 percent for Condominium homes. Inventory decreased 13.2 percent for Single Family homes and 21.6 percent for Condominium homes.
Median Sales Price increased 3.4 percent to $708,750 for Single Family homes and 14.1 percent to $493,500 for Condominium homes. Days on Market decreased 21.1 percent for Single Family homes and 24.5 percent for Condominium homes. Months Supply of Inventory decreased 8.1 percent for Single Family homes and 22.6 percent for Condominium homes.
Unemployment rates remained remarkably low again in 2018, and wages continued to improve for many U.S. households. It is generally good for all parties involved in real estate transactions when wages grow, but the percentage of increase, on average, has not kept pace with home price increases. This created an affordability crux in the second half of 2018. Housing affordability will remain an important storyline in 2019.
For More Maui Market December 2018 report go to Realtor’s Association of Maui Website here.
For more 2019 Economic Forecast, Matthew Gardner’s forecast here.