The median price for existing O'ahu single-family homes last month continued to hover around the $650,000 mark as Hawai'i's largest housing market exhibited more price stability amid declining sales.

October's single-family home resale price was $655,000, up 1.6 percent from $645,000 in the same month last year, according to data from the Honolulu Board of Realtors.

It is the sixth month out of 10 this year that the median price has been within $10,000 of $650,000. The low was $600,000 in January. The high was a record $685,000 in June. The year-to-date median is $649,000.

"Stability has been the key word in the market for residential properties on O'ahu," said Harvey Shapiro, research economist for the trade association representing about 6,000 real estate agents.

For the first 10 months of the year, the $649,000 median price is up 2.2 percent from $635,000 in the same period last year.

While prices remain fairly level, the number of sales continues to fall.

In October there were 265 single-family home sales, down 10.5 percent from 296 a year earlier. Year-to-date, the number of sales is down 7.6 percent to 3,142 over the same period last year.

The number of single-family homes sold has been declining for a third straight year, although the 7.6 percent reduction this year to date is less than the 12.5 percent decline for all of 2006. In 2005, the drop was 1.8 percent.

Condominium sales have followed a similar trend of a price runup that has moderated behind a sales slowdown.

O'ahu condos sold last month for a median $322,500, up 4 percent from $310,000 a year earlier. There were 423 condo sales, down 0.5 percent from 425 a year earlier.

Year-to-date, the median condo sale price is $325,000, up 4.8 percent from $310,000 in the same period last year. The number of sales is down 13.3 percent to 4,767.

Given the contraction in sales for single-family homes and condos, the sustained gains in prices continues to surprise many observers, though the price appreciation has eased in the past two years.

For single-family homes, median prices registered annual double-digit gains from 2002 to 2005. Last year, prices rose 6.8 percent.

Industry analysts say that helping sustain market prices are Hawai'i's underlying strong economy that is growing, albeit at a slower pace, and features low unemployment and rising personal income. Housing demand from investors from outside the state is another factor.

Local economists generally predict that O'ahu home prices will flatten over the next couple of years and not drop significantly unless there is a shock to the state economy that reverses job and income growth, creates a population exodus or boosts interest rates dramatically.

The University of Hawai'i Economic Research Organization in September projected that O'ahu's median single-family home resale price will end the year 0.97 percent higher at $638,160, then decline 0.63 percent next year to $634,150.

For condos, the organization projects a 5.19 percent median price rise this year to $326,360, followed next year by a 0.73 percent decline to $323,970.

O'ahu home prices this year contrast sharply with many Mainland markets where prices are diving.

But not everyone is convinced that O'ahu home values are rising. "Overall I don't think prices are going up," said Mike Gallagher, broker-in-charge at RE/Max Honolulu.

Gallagher said he believes the mix of homes — a greater preponderance of high-end homes — are boosting median resale prices.

Many developers capitalized on demand for luxury property during the price boom over the past five years, building pricey new homes or renovating old homes that when resold influences the median price, which is a point at which half the homes sold for more and half for less.

"When the higher end does sell, it's skewing everything," Gallagher said.

Much luxury development has been in urban Honolulu's high-rise condominium market. But even in the 'Ewa Plain, one of O'ahu's lower-priced markets, developers such as Gentry Homes and Haseko Homes last year were building and selling homes for close to and more than $1 million.

This year to date, the median sale price for 'Ewa homes is down 2.8 percent to $515,000, which to Gallagher indicates that home values are weakening.

The 'Ewa Plain is O'ahu's largest housing region defined by the Honolulu Board of Realtors with 512 of the 3,142 sales this year through October.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.