Sales of new homes on O'ahu rose sharply in the third quarter as a surge in new high-rise condominiums coming on the market more than offset a decline in single-family home sales.

The volume of overall sales rose to 599 from 263 sales in the same quarter a year earlier, according to data compiled by market researcher Ricky Cassiday for Central Pacific HomeLoans.

The big swing came from the condo market, which had 479 sales in the recent quarter compared with 59 a year earlier. Such volatility is common in the condo sales market where a large number of units coming to market in one quarter can skew sales data for that period.

Single-family home sales totaled 120 in the recent quarter, compared with 204 a year earlier.

"Condominiums continue to show strong demand," Cassiday said in the report. "Single-family (home) demand has been declining."

The average sale price was $624,472, up 17 percent from $535,859, in the same period.

Cassiday said completion or near completion of some single-family home subdivisions has left developers with less land to build on until they get new projects going.

For condos, one downtown Honolulu high-rise project, Capitol Place, accounted for the bulk of sales, with 340 of the 479 in the quarter.

Capitol Place units, which sold for an average $640,000, also helped sway the market's average price. The remaining 50 or so available units in the 394-unit project are expected to nearly sell out by the time the tower is completed in the second quarter of 2008, according to project representatives.

Karl Heyer, principal of Heyer & Associates LLC and project broker for Capitol Place, said buyer demand today is less frenzied than it was in the last few years, but that there is a lower rate of cancellations.

"The people that are buying now tend to be more discerning, but once they commit, they stick with the purchase," he said.

The second biggest selling condo project in the third quarter was Keola La'i with 40 sales, according to Cassiday's report.

Keola La'i developer Alexander & Baldwin recently reported that the Kaka'ako tower has sold 217 of 289 units available to the general public. Sixty-three additional units reserved for moderate income buyers at below-market prices are slated to be sold via lottery in the first quarter of 2007.

A&B said units are selling at an average of one a week, and that the project should be sold out when complete in early 2008.

Sales are defined in Cassiday's report as binding sale contracts, which are typically converted from initial nonbinding reservations. Converting contracts to completed sales, also known as closings, can take a year or two while homes are built.

New-home closings in the third quarter totaled 398, which was up 5 percent from 378 a year earlier.

For the first nine months of the year, sales are up 17 percent to 1,600 from 1,364 a year earlier, and closings are up 64 percent to 1,858 from 1,132.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.