Cooling real estate and tourism will lead to slower economic growth in Hawai'i for the next several years, according to a new forecast.

Despite the slowdown, the state's economic expansion is on track to complete its 11th consecutive year in 2007, said economist Leroy Laney during yesterday's First Hawaiian Bank Business Outlook Forum at the Dole Cannery.

Among the major factors affecting growth is a flattening of Hawai'i's real estate boom, Laney said. In 2006, sales of single-family homes fell more than 12 percent while condominium sales fell more than 20 percent. Home prices are still rising, but the steep increases in prices experienced in 2005 and 2005 have halted.

"The speculators expecting to flip a property in a year or so are gone, and those just wanting to buy a place to live in are shopping for price more carefully," said Laney, economics consultant to First Hawaiian and professor of economics at Hawai'i Pacific University.

"This may play an important role in a slower overall economy here in the next few years," Laney said. "And I do think we have several years of hiatus before any new boom begins."

Other signs of slower growth include visitor arrivals, which have been disappointing in 2007, mainly because of the faltering Japan market.

"Mainland numbers just aren't enough to offset continued anemic performance from Japan, which has been slumping for a decade now," Laney said. "This is mainly Waikiki's problem. The Neighbor Islands are doing better."

For 2008, Laney predicted that: