Ben Severson vividly remembers what a charged competitive environment it was three years ago when he was trying to buy a home amid the frenzy that was O'ahu's housing market.

With flashlight in hand on a dark morning, the bodyboard designer and lifeguard scouted a Makaha house he heard would be listed for sale soon, and quickly made an offer to beat what he feared would be a bidding war. He edged out five other offers.

"It was pretty stressful," he said.

This year, Severson, 42, bought two more homes with relative ease months after the properties were listed for sale, illustrating the market's dramatic change from high-pressure to stable equilibrium.

The calming is not without exception, but broadly has meant more choices, more negotiating power and less urgency for buyers who can be more discerning because home inventory is up and sales are down.

For sellers, homes are taking longer to sell. And it's become far less simple to set an attractive sale price now that everyday bidding wars and rapidly escalating values have ended.

Also, the swelling ranks of real-estate agents has begun to ebb, speculative investors are largely gone, and in a few cases, people who bought a home last year and now need to sell quickly are losing money.

HEALTHY ACTIVITY

"The market that we're now in is much more balanced," said Steve De La Peña, vice president of O'ahu operations for Century 21 All Islands. "Buyers have the time to look around and make choices. They have less pressure to jump on something right away. It makes it easier on everybody."

De La Peña said the heady market clearly began to mellow around the middle of last year, but that today's level of activity remains healthy.

"It's still a great market," he said. "Stepping down from the best market in the history of Hawai'i real estate — that's OK."

The number of O'ahu single-family home and condominium sales peaked in 2005 at 12,607. Sales dropped 17 percent to 10,421 last year, and have continued to decline this year but at a slower pace.

Homes that a couple of years ago spent a median 15 to 30 days on the market before selling have spent a median 40 to 70 days on the market this year.

Inventory, which dropped to roughly 1,700 units in mid-2005, has been around 4,000 this year.

Median prices, meanwhile, began to wobble late last year after doubling since 2001. This year through April, the single-family home median price is up just 1 percent to $630,000. The year-to-date median condo price is $322,000, up almost 6 percent compared with a 15 percent rise last year.

The number of active O'ahu real-estate agents also recently began to dip, after surging from 6,143 in mid-2002 to 8,719 in mid-2006. As of April 16, there were 8,503 active agents, according to the state Real Estate Commission.

Brokers often are working harder to cinch sales now that the scene of quick-action buying has dissipated, and they are earning less as a group.

During the first four months of the year, total dollar volume of O'ahu home sales was $1.66 billion, down 7 percent or $125 million, from $1.79 billion during the same period last year.

Angie Pasion, an agent with Aloha Hawai'i Realty, said she typically had three to five clients a month four years ago as prices and sales gained steam. This year, she has two or three clients a month.

"It has slowed down," Pasion said, adding that business is not bad. "I think this market is healthy."

LENDING CHALLENGES

Pasion said one of the bigger recent challenges has been dealing with tighter lending standards instilled in the fallout of several Mainland lenders struggling with defaults on exotic mortgages.

"It has a tremendous effect," she said. "I find that more challenging than selling. I have the product, but it's the mortgage companies now providing the pressure."

For buyers who can qualify for a mortgage, they generally have more power to negotiate as the seller's market transitioned to a more or less evenly balanced environment.

The shift, however, hasn't been pleasant for Kapolei homeowner Regina Akpinar, who would prefer that the market's robust growth had continued.

Akpinar and her husband bought their home during the frenzy in October 2005 after moving to Hawai'i from Florida.

"We were extremely shocked about the market," she said, explaining that they often competed against multiple bids above prices asked by sellers. "We were basically chasing after homes. We were never fast enough."

Now with inventory up and price appreciation more or less stalled, the couple put their home on the market in February after Akpinar's husband, who's in the military, received unexpected orders to relocate to the Mainland.

The Akpinars received an offer fairly quickly, but will take a slight loss on the sale after factoring in money they invested to fix up their home.

"I think we bought at the worst time, and are selling at a bad time," Akpinar said.

Sharon Naukana of 'Ewa Beach bought her house at a great time — 2001 before prices started taking off. But now the single-parent is selling because she'd like to be closer to family members moving to the Mainland.

Since Naukana's three-bedroom home went on the market in November, there have been no offers.

"It's frustrating because everyone is lowering their prices," she said, adding that she reduced her asking price by $7,000 to $448,000 but isn't willing to go lower. "I will be patient. I don't have to sell."

SOME COMPETITION

Prudential Locations agent and partner Artie Wilson, who's been in the real-estate business for more than 30 years, said the market is generally softer but some neighborhoods still exude stiff competition.

For instance, six weeks ago he represented a buyer who made an all-cash offer $75,000 above the asking price on a Kahala house listed for $1.5 million. "We didn't even get a response," Wilson said. The home sold for nearly $1.7 million.

"If you price your home well, you'll get immediate activity ... in most good neighborhoods," he said. "There are still areas that are still extremely aggressive and hot."

Severson, a former pro bodyboarder who's become a real-estate investor, said he's seen sellers price property relatively low to entice competing bids — a strategy that was rare at the top of the market. But many sellers, in his view, are still pricing property as though the boom isn't over.

"I think people are still living eight or 10 months ago and trying to gouge," he said.

So Severson takes a patient approach to buying.

In February, he bought a four-bedroom house on an acre lot in Makaha that went on the market in November and fell out of escrow with another buyer a month later. Severson believed the home was undervalued by $50,000 at its $530,000 list price, and snapped it up using equity from the home he bought in 2004.

Severson also is in escrow to buy another Makaha house that was on the market 186 days and had its list price reduced to $239,000 from its tax-assessed value of $279,000.

Still, other buyers, like Dara Young, a hotel company employee who bought a condominium this year, felt compelled to act fast despite the slowing market.

Young started searching a year ago as prices were peaking but sales were falling. At the time, she vowed not to rush as a first-time buyer.

"I felt I'm not going to jump in until I really feel it's right," she said. In her search last year, Young saw many overpriced run-down fixer-uppers, and submitted a couple of offers that were topped by others. "It was very frustrating."

Even though the market had significantly cooled by January, Young saw a Kapi'olani condo she liked a lot, and rushed to put in an offer the same day. "I didn't let anybody squeeze in there," she said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.