Residential property sales at Hawai'i vacation resorts this year are on pace to post a fourth consecutive annual decline and the first average price decline since sales began receding, according to an analysis of resort home sales in the first half of this year.

A report by local housing market researcher Ricky Cassiday notes a slight average sales price decline to $1.65 million this year through June compared with $1.66 million in the same period last year.

The price weakness actually began to show in the second half of last year, Cassiday said, but strong sales earlier in 2007 helped the full-year average price rise. Cassiday forecasts that this year's average price will drift downward.

Cassiday's report covers new and previously owned condominiums, single-family homes and house lots at master-planned resorts such as Wailea on Maui, Hualalai on the Big Island and Ko Olina on O'ahu. Areas with resort zoning that aren't master-planned communities, such as Waikiki, aren't included.

Resort homes are a significant portion of the state's broader residential real estate market. Total dollar volume peaked at $2.8 billion in 2005 and was $2.5 billion last year. Cassiday projects total dollar volume will be $2 billion this year.

"It's bad relative to recent history," he said. "But it's great or good relative to other real estate markets — especially real estate markets in high-end places across the nation."

There were 614 resort residential property sales in the first half of this year, down 31.5 percent from 896 in the same period last year and about half the 1,222 sales in the first six months of 2004, after which sales began to slow.

Bob Hansen, a real estate agent for Coldwell Banker on Maui, said stricter lending requirements have caused more sales to fall through because some would-be buyers no longer qualify for a mortgage. "There is a glut in the market," he said.

Cassiday said the decline in buying has been more dramatic for lower-priced resort home properties, with the withdrawal of speculators who had been dealing mostly in property priced under $1 million.

The exit by broad-based speculators actually has helped keep the average sale price high, because more high-end property sales were left to represent a greater share of total sales.

Cassiday said demand at the high end has been relatively steady, with sales of property over $2 million down just 1 percent to 158 in the first half of this year. In contrast, sales of property priced under $1.75 million generally fell by closer to 30 percent. "The rich are definitely still in the market," he said. "They can speculate without being hurt."

The most expensive property bought earlier this year was a new home on a nearly 1-acre lot at Hualalai Resort for $20 million. According to public property records, the buyer was Hideyuki Busujima, CEO of Japan's leading pachinko machine manufacturing firm, Sankyo Co. Ltd. in Tokyo.

Busujima, property records show, also bought a $10 million home last year at the oceanfront Kuki'o golf resort on the Big Island, and a $15 million property at Hualalai in 2003.