Weakness in O'ahu home prices persisted last month with a 2.4 percent decline in the median single-family home resale price to $628,000, marking a fifth straight month of lower or unchanged prices from the same month a year earlier.

The number of single-family home sales also was down, as it was for condominiums, though the median condo resale price was higher by 2.6 percent, according to Honolulu Board of Realtors data released yesterday.

The single-family home pricing trend is expected to worsen a little as the year continues, according to a projection last month by the University of Hawai'i Economic Research Organization that forecasts a full-year median price decline of 3.2 percent.

If the UHERO projection is on target and single-family home prices decline this year, it would be the first annual reduction since 1999, when the median dipped 2.4 percent to $290,000.

UHERO also projects that O'ahu's median single-family home sale price will decline 2.3 percent next year.

Still, given slowing local and national economies, weak home purchase demand and constrained mortgage market financing, a modest decrease in O'ahu's median home price isn't too bad.

"Even with the instability in the finance industry, the market for O'ahu residential properties appears to be holding, unlike the very negative conditions we hear about on the Mainland," said Dana Chandler, Honolulu Board of Realtors president and broker-in-charge at Hawaiian Island Homes Ltd.

Local economists are generally of the consensus that O'ahu home prices won't drop significantly because personal income is still growing, unemployment remains relatively low and new home construction is limited by land and development rule constraints.

The economists doubt home prices will fall more than a few percentage points unless there's a shock to the state economy that reverses job and income growth, creates a population exodus or boosts interest rates sharply.

Last month's 2.4 percent decrease in the single-family home resale price followed a 2.5 percent decline in February and no change in January. For the first three months of the year, the median price was unchanged at $620,000 compared with the first three months of last year.

The number of sales was down 14.5 percent to 282 last month from 330 a year earlier. Condo sales were down 27.5 percent to 392 from 541 in the same comparable period.

The median condo sale price was $329,300 last month, up 2.6 percent from $321,000 a year earlier. For the first three months of the year, the median condo price is up 3.1 percent to $330,000 from $320,000.

UHERO projects that the median price for condos will decline 1 percent this year, followed by a 2.8 percent decline next year.

"Some downward drift in home prices will occur, but Hawai'i will avoid the large-scale contraction that is occurring in many Mainland cities that must work off home price bubbles," the UHERO report said.

Helping put pressure on prices have been prospective buyers willing to wait for sellers to list homes at more attractive prices or reduce prices. According to Honolulu Board of Realtor data, the average list price for homes on the market was $725,000 last month, which compared with roughly $750,000 all last year and a peak of $850,000 in mid-2005.

"The sellers are starting to come more in line (with buyer expectations)," said Chason Ishii, president of Coldwell Banker Pacific Properties. "It's really becoming more of a buyers' market."

As fewer homes sell each month, inventory has generally risen slowly but still is not above recent peak levels in 2006.

Last month there were 1,919 single-family homes listed for sale, which was five fewer than there were in February but up from 1,876 in January. In March 2007 there were 1,714 homes for sale. The recent peak was 2,052 in November 2006.

Condo inventory last month was 2,581, up from 2,476 in February and 2,349 in January. In March 2007 there were 2,238 condos for sale. The recent peak was 2,750 in September 2006.

In another bright spot for the market, the time it took for homes on the market to sell declined last month. Single-family homes spent 47 days on average before selling, down from 59 in February and 65 in March 2007. Condos spent 39 days on the market before selling, down from 50 days in February and 40 in March 2007.

Condo resales decline, but median price sees slight gain