Sales for February were reported today by the Honolulu Board of REALTORS® and the figures were very low, both compared to last year and in real terms. Median prices, however, continue to be holding at current levels.

The reported sales for February came in at 163 single family homes and 321 condominiums. These figures represent a significant decline from a year ago when the numbers were 272 and 402, respectively, and this means sales decreases of 40.1% and 20.1%.

The median prices for February were $599,000 and $335,000, with the latter price tying records set last year. The single family home price fell below the $600,000 mark for the first time since 2005, but only by $1,000, and prices are still double what they were in 2000.

Why did we have such a major sales shrinkage? My theory is that there’s been an overwhelming number of negative reports on housing in the national media that consumers are reacting to and are taking a wait and see attitude. Even though the economic conditions in Hawaii remain pretty strong, incomes are still rising and unemployment is still low, people are afraid of what’s around the corner.

I continue to believe that the current softness is probably a normal part of the regular business cycle and shouldn’t be a reason to avoid the market. Financing costs are still quite low and the FHA loan limit was just raised, a positive move for the housing industry. Asking prices for the inventory continue to be reduced, even though there hasn’t been much of an increase to the supply of available homes.

We need to see what happens to the economy in the next few months to predict when (not if) the market will recover, but this is certainly a good time to arrange a deal on real estate.