Q. Rising housing prices in many parts of Hawai'i have created a situation in which the median household income isn't enough to qualify for a traditional mortgage on a median-priced home. How are average home buyers able to get into the market?

A. It used to be one wage earner in a family; now it's 2 1/4. And the parents are helping out, gifting to the kids, helping with the down payment. It's also being fueled by baby boomers buying their dreams, and this is a very affluent group of people. They're buying those dream things that when they were a kid in the '60s, being a hippie or whatever, this was the life: to be able to come to the Islands, or live in Southern California, or down in Florida. So they're the ones that are driving up prices so hard right now, but they're driving them in the resort areas. Honolulu did it on its own. It's got Waikiki, which is a pretty confined area overall, and yet the whole island took off. And so we actually pushed our own prices internally.

Q. To what extent is speculative activity driving the market?

A. A lot of local folks are speculating and buying those condos at $450,000 to $600,000 to $800,000, thinking that at the end ... you can flip it for a quarter-million profit because in three years it appreciated 90 percent. It's a dangerous thing for a regular wage earner to be doing ... because you're getting into a game with the professionals that do this in the stock market, and do this in real-estate speculation. For the average homeowner, that's not their bailiwick, so it can tend to get them in trouble.

You saw the bankruptcies we had in the mid-'90s, when speculators went out and bought all these leasehold houses and did things they shouldn't. They didn't have the pockets to play the game.

Q. How much impact are Mainland buyers having on the local market?

A. On the Neighbor Islands, a lot of it is coming from the Mainland. These are the best buyers we could have in Hawai'i. They come in, buy an asset, pay taxes and only use it part of the year. We have less stress on our roads, less stress on our water systems, sewer systems, trash systems.

Q. Looking ahead for the rest of 2006, where do you see sales volume and prices heading?

A. I think prices will rise. Condos may even rise a bit faster than single-family homes, especially on O'ahu. They'll buy condos up to, let's say, an average of $500,000 before they say, "For a little bit more, I might as well get the house."

Q. How about inventories?

A. Our inventory has increased considerably here in just the last few months. We're going to see inventories continue to grow, but the thing is, the boomers are starting to turn 60. Somewhere within two to five years, they're going to be retiring, and they're just going to keep coming.

Q. With the market cooling off a bit, what does it mean for sellers?

A. Some of the sellers already have had to drop their price. In a hot market, you can just see who wants to come after it. It's not us (the real-estate broker) that does it. It's always the seller wants more and the buyer wants less. ... We're not driving it, we're just facilitating the process. Some of the prices got too high. ... Now, if you get too far from the market price, it's just going to sit there. You'll probably get there, but not as quickly.

Q. What does it mean for real- estate companies?

A. Our company is a full-service company. In a hot market, you don't have to market as much, and sometimes you don't have to market at all. You just put it in MLS (the Multiple Listing Service) and it sells. We tend to do it all. And when it (the market) changes, our services become more valuable to the consumer because we know how to market, we've been doing it all along. But it's going to cost us more in investment than in a fast market. It changes our profitability.

Q. What does it take to be a real-estate broker?

A. Eight out of 10 agents probably won't be in the business in six months. Some of them are leaving for reasons other than (that) they weren't successful. They're changing careers, they were good at this, but now they want to do something else. Others just weren't destined to be in real estate. You really have to be self-motivated. If you have to have somebody prompt you to do something, we won't call you. If you don't show up, it's your choice. ... It's a tough business. It's not easy to be in real estate; as much as everybody thinks we're all driving Mercedes, it's simply not the case. We've got people driving Nissans just like everybody else.

Q. How much has Century 21 All Islands grown since its inception?

A. Twelve of us started this company in 1993. We grew from '93 to '98 organically. Then in '98, we bought the largest Century 21 (franchise) in the state. Then the next year, we bought the second-largest, in Kona. All together, we bought about 18 companies. Then the market got really hot, and the price of companies escalated and got to the point where I didn't want to buy them, because it would take too much of my cash flow to service the debt. So we went back to growing organically. We now have 13 offices and 419 brokers. We're No. 19 of all Century 21s nationwide in terms of sales.