The median price of previously owned single-family homes sold on O'ahu in May suffered its biggest decline in the present market downturn, falling 15.3 percent to $550,000 from $649,500 in the same month last year.

The nearly $100,000 drop, reported by the Honolulu Board of Realtors, continues a slide in O'ahu median home resale prices that began as a small one last year but has grown close to 10 percent this year through May. For all of last year, the median price dipped just 3 percent.

Harvey Shapiro, research economist for the local trade association, said that while broad price weakness persists, prices may be starting to attract more buyers into the market.

May was the first month since October that there were more than 200 single-family home sales.

There were 225 homes sold in May. That was still down 10.7 percent from 252 in the same month last year. But the decrease was the smallest percentage point drop since 8.3 percent in October.

Since October, year-over-year sales volume declines have ranged between about 19 percent and 47 percent.

"We have a substantial number of buyers who are willing to come into the market," Shapiro said.

Brenda Mahoney, an agent with Century 21 Homefinders of Hawai'i, said some of the heightened activity is concentrated in O'ahu's biggest submarket, the 'Ewa plain, where much of the short sales and foreclosures have hit. The attractive prices have produced multiple offers on homes, with one attracting 11 bids.

"There are buyers out there," she said. "Of course buyers are looking for a deal."

A rise in sales typically is the first indicator of a real estate market rebound, and the next few months will provide a better indication whether such a trend is building.

The University of Hawai'i Economic Research Organization in March forecast that median single-family home prices on O'ahu will fall 9 percent this year, 4.9 percent next year and 0.6 percent in 2011.

For the first five months of this year, the median price was $570,000, down 9.5 percent from the same period last year.

One major factor keeping prices from falling more severely is a fairly stable inventory of homes on the market. There were 1,739 single-family homes for sale last month, down from 2,043 a year earlier and 1,822 in April. Inventory in May 2006 and 2007 also was roughly between 1,700 and 1,800.

'TIGHT' MARKET

Some Mainland housing markets have had median prices tank 30 percent or more, in some cases due to huge inventory overhangs produced by developers — something that didn't happen significantly in Hawai'i.

"We still have a tight housing market," Shapiro said.

Homes that sold in May spent an average of 49 days on the market before selling. That compared with 52 days a year earlier and 51 days in April.

Based on the inventory and rate of sales, it would take 9.2 months to sell every single-family home listed on the market. That's still higher than 8.0 months a year ago but is down from 9.7 months in April.

A level of six to 10 months of remaining inventory is generally considered to be the range where prices tend to remain more or less flat.

The median price, a point at which half the sales are for more and half for less, tends to be an imprecise indicator of the market value of real estate because the mix of homes by quality, age and size influences the measure.

For instance, a 1,600-square-foot home in Hawai'i Kai sold last month for $745,000, or 14.4 percent less than the $870,000 sale price in February 2008.

But in Kapalama, a 1,160-square-foot house sold last month for $590,000, or 4.4 percent more than the $565,000 it sold for in September 2006 near the frenzied peak of the market.

For the first five months of this year, median prices in the five largest submarkets on O'ahu ranged from a 3.3 percent decline in Mililani (the second-largest submarket with 84 sales) to a 14 percent decline in Kailua-Waimanalo (tied for third largest with 68 sales).

The median price was down 7.8 percent for the 'Ewa plain, O'ahu's largest submarket with 136 sales this year through May.

CONDO PRICE STABLE

In O'ahu's condominium market, the median price in May was down 9.6 percent to $305,000 from $337,300 a year earlier. The decrease has been higher twice in the past 12 months, but May's median price matches the recent low that has now occurred four times in the past six months.

The median condo price was also $305,000 in December, January and March, helping put the median for the first five months of this year at $305,000, down 7.6 percent from the same period last year.

There were 263 condos sold in May, down 31.2 percent from 382 a year earlier.

Condo inventory at the end of May was 2,438 units, down from 2,717 a year earlier and 2,514 in April.

Units sold last month spent an average 52 days on the market, up from 41 a year earlier but down from 66 in April.

Based on the inventory and rate of sales, it would take 9.5 months to sell every condo on the market. A year earlier, the figure was 7.1 months, and in April it was 10.1 months.

The University of Hawai'i Economic Research Organization projects the median condo price will decline 8.5 percent this year, 10.4 percent next year and 7.2 percent in 2011.