The transition from seller's market to buyer's market is under way.

Hard braking was finally applied to O'ahu's seemingly run-away real estate market in December. Sales of single-family homes dropped 24.5 percent, the biggest decline in nearly 10 years, while the inventory jumped 47 percent.

"We expect some play on price," said Raena Donahue, a Mililani resident, who has been shopping for a new home the last few weeks. The mother of three says she has seen some prices coming down especially among homes that haven't sold after more than 120 days on the market.

"It has slowed down," confirmed Sherri Kingsley Sera, an agent with Millie Kingsley Realty. "I think people are waiting for the prices to come down."

Prices are inching downward. The median price for single-family homes sold last month was $610,000, which was down from a record $640,500 in November and the lowest median since $599,000 in July, according to the Honolulu Board of Realtors. In December 2004, the median was $495,000.

The median condo sale price last month was $305,000, unchanged from the record set in November and up from $217,000 a year earlier.

Industry experts said high prices, rising interest rates and perhaps an expectation from buyers that prices will fall contributed to lower December sales.

Bill Chee, president of Prudential Locations, said the rise in inventory, fall in sales and little change in median prices indicate that more buyers have been unwilling to pay high asking prices.

Chee said December's sales decline should reduce pressure that raised prices nearly 30 percent last year, and make the market more evenly balanced between buyers and sellers.

"I hope it continues to do that because it provides much more stability to the market," he said, predicting that the number of sales this year will decline more than 10 percent while prices rise 5 percent to 8 percent.

Only 315 single-family homes and 545 condominiums sold last month. The decline in condo sales was 22.3 percent from a year earlier.

December sales numbers are based on closings and generally reflect purchases agreed to in September and October.

Inventory for condos was 30 percent higher at the end of last year compared with the end of 2004. The number of single-family homes listed for sale at the end of 2005 was 1,542 while 1,737 condos were listed.

Harvey Shapiro, research economist for the Honolulu Board of Realtors, said sales could be somewhat lower this year, with prices possibly rising 10 percent to 15 percent.

For all of 2005, the median price was $590,000 for single-family homes and $269,000 for condos — respective gains of 28 percent and 29 percent from 2004. The median is a point where half the sales were for more and half for less.

The number of sales last year was down 1.8 percent for single-family homes, for a total of 4,617, and up 1.3 percent for condos, for a total of 7,990. Combined, there were 17 more home sales in 2005 than 2004.

"After more than eight years of explosive sales growth, current sales activities indicate a shift to a more sustainable sales rate," Shapiro said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.