Stick a fork in it, maybe. O'ahu's housing boom could be done.

A leading Hawai'i economist predicts that 2005 will be the last year in a nine-year run in which more previously owned homes are sold than the year before.

Prices, however, are projected to keep rising in 2006, although more slowly, according to Paul Brewbaker, chief economist at the Bank of Hawaii.

"My sense of it is that transaction volumes have already peaked, on a seasonally-adjusted basis," he said. "They may not fade rapidly. The market could sustain relatively robust trading volume for some time."

Brewbaker's forecast that O'ahu's housing market will cool mirrors projections that the national housing boom will end next year with fewer sales and slower price appreciation.

The Bankoh economist's view is of particular interest for many observers because in mid-2003 he suggested that median single-family home prices could rise to $600,000 in a couple of years and not shut down sales — a stunning observation that proved true.

But other observers of O'ahu's housing market aren't ready to declare the expansion cycle over.

"If I had to guess, I think that resales will rise very slightly next year before falling in 2007," said Carl Bonham, executive director of the University of Hawai'i Economic Research Organization.

Earlier this year, Bonham was forecasting a drop in sales next year, but stronger-than-expected personal income growth changed his outlook.

Jim Wright, president and chief executive of Century 21 All Islands, speculates that there will be "maybe slightly less" sales in 2006 compared with this year.

Herb Conley, co-managing director of Coldwell Banker Pacific Properties, said he expects a sales decline for single-family homes, and possibly enough of an increase for condominiums that result in an overall slight gain for the combined market. "It's a bit of a toss-up," he said.

Harvey Shapiro, an economist for the Honolulu Board of Realtors, said it's too close to call for him at this point. "I don't think it's clear," he said. "It's still a strong market. I think we need to see what happens."

Even if O'ahu's expansion cycle fails to continue next year, nine years of growth is still phenomenal.

Nationally, the housing market is expected to set a fifth consecutive annual sales record this year but cool next year because of higher interest rates.

"The market will be coming off of a five-year boom and experience a soft landing next year," said David Lereah, chief economist for the National Association of Realtors.

Lereah projects that home resales will decline 3.5 percent next year after rising 4.8 percent this year.

O'ahu home sales this year through October are running 2.8 percent ahead of last year, after rising 11 percent in 2004 and about 22 percent in 2003 and 2002.

Given the level of pending home sales scheduled to close by the end of the year, it is expected that 2005 will eke out another record year even if sales soften significantly in November and December.

About 13,000 existing homes are expected to sell this year, which is more than three times what was sold in 1996 just before the present expansion cycle formed.

Experts agree that rising mortgage rates and home prices will be the biggest factors affecting sales next year.

The average interest rate for 30-year, fixed-rate mortgages is projected to slowly rise from 6.3 percent last week to 6.7 percent by the end of next year, according to the National Association of Realtors.

Brewbaker predicted O'ahu median home prices, which rose about 30 percent this year to around $615,000 for single-family homes and around $280,000 for condos, will rise next year by another 10 percent to 20 percent.

"The valuations are running out of headroom," he said. "We've always felt that 2006 was a good Post-it-note year — stick a yellow Post-it note on the calendar with a reminder that 'this is probably the last year for substantial valuation gains.' "

Brewbaker said he expects an end to significant price increases in higher-priced neighborhoods such as East Honolulu and Windward O'ahu, and strong appreciation in more moderate areas like Makaha.

How high prices rise next year largely will influence how many homes sell.

"Prices are the wild card," Conley said.

This year's 30 percent price surge, which rivals the run-up in 1990 driven by the Japanese investment bubble, has made homes less affordable for more people, which theoretically weakens demand.

But local growth in jobs and income, combined with a wealth of Mainland baby boomers entering their peak earning and retirement years, are expected to keep demand relatively robust for Hawai'i homes.

Conley of Coldwell Banker notes that even if housing transactions fall next year, 2006 would probably still be the second or third strongest year in the market's history. "It's not bad," he said. "To say (the boom) is over says there's no more cycle. That's not true. The demand is still so strong."

Reach Andrew Gomes at agomes@honoluluadvertiser.com.