Low interest rates, tight inventory and competitive bidding have led to the highest median home prices ever recorded, and still residents, visitors and investors are entering the supercharged market in record numbers.

But the market's gripping forces present ever more challenging situations for consumers faced with selling or buying a home.

Robert and Stacy Barclay were shopping for a $350,000 home. After nine months of searching, Robert, a writer,

and Stacy, an attorney, swallowed hard and plunked down $430,000 for a three-bedroom, 2 1/2 -bathroom home in Kane'ohe.

"We were concerned about the price, but we were concerned that if we didn't buy now we'd be priced out," Robert said.

For Hawai'i Kai homeowners Liane and Royd Liu, high prices for neighboring units in their townhouse complex encouraged them to sell, especially after the arrival of a baby made them want more space. But finding a replacement — that's another story.

"It's not an easy process," said Liane Liu, who with her husband decided to move in with his parents after their sale closes and until they can buy something else.

Last month, about 1,700 homeowners on O'ahu listed properties for sale, while about 1,100 people bought previously owned homes, according to the Honolulu Board of Realtors.

Many buyers are finding it necessary to move farther away from the city's urban core and to trade long commutes for more affordable or spacious homes. Others are settling for condos or older, smaller houses with improvement needs .

Interest rates still near 40-year lows, and rising incomes have allowed buyers to qualify for larger mortgages that keep the market popping with record numbers of sales.

For sellers, fair-priced homes in good shape spend only a few days on the market and often receive multiple bids above the asking price. Many owners are being motivated to sell because of rising values, but then face the problem of buying, renting or making some other living arrangement like the Lius.

Meanwhile, prices and interest rates continue to rise — putting pressure on sellers and buyers to make high-stakes decisions that only future trends will reveal as fortune or folly or something in between.

"It's a lot to think about," Liane Liu said. "If you put your home on the market and you don't have any place to go, what are you going to do once you sell? The market is so hot. You can buy smaller for a bigger price. It's not an easy process."

Liu said their two-bedroom, two-bath townhouse drew interest from 32 couples and several real estate agents at an open house that resulted in six offers, some above the asking price.

A sale is expected to close in mid-July, but the Lius are not in a hurry to buy again. Liane Liu said that even with mortgage rates moving up — the average rose nearly 1 percent since March to about 6.25 percent last week — there is little pressure, considering they had a 7.75 percent rate on their last mortgage in 1999.

"Relative to that, 7 (percent) is still pretty good. I think people have been spoiled with their 5 percent interest rates," she said.

The Lius have other considerations such as trying to find a bigger, preferably single-family, home in Hawai'i Kai. But to do that they likely will have to either buy an older home or a fixer-upper or take out a substantially bigger mortgage.

"We're open to options," Liane Liu said. "We're fortunate because we had the opportunity to move in with my in-laws."

Other residents are dealing with the market in different ways. Corinda Wong, agent for Prudential Locations, said she has a client who bought a studio near Punahou School about five years ago, and has been looking to buy a two-bedroom condo in 'Aiea since marrying and having a baby.

She said her client could have afforded a bigger place by selling the studio, but opted to keep it as an investment and take out a loan with 5 percent down to buy the second property.

But finding a new place has proven competitive. A Pearl City condo seller passed on an offer by Wong's client, who is now waiting for word on a bid on a Salt Lake condo.

Derrick Yamane of Prudential said competing bids can frustrate buyers. "A lot of times they're playing second fiddle and that's no fun. They keep looking."

Yamane said he has one client preparing to list their Royal Kunia home in Waipahu and search for a bigger house closer to town.

"They're trying to take advantage of selling high, but they have to buy high," he said.

Yamane's client would like to move to the roughly 20-year-old community Royal Summit in the hills of 'Aiea where prices generally start at around $700,000.

There were few homes available there until listings picked up after one sale cracked $1 million last month, Yamane said.

"Some of these sellers are coming out and saying, 'You know what, I'm never going to get this much money, so I'm gonna just sell and rent or I can downsize.' I think it is on a lot of people's minds," he said.