O'ahu's median single-family home resale price managed to eke out another gain last month, rising 0.8 percent, or just $5,000, from a year earlier to $620,000.

The increase was the slimmest this year, and follows a slowing trend for prices that are rising more slowly but have yet to fall in any month this year when compared with the same month last year.

The anemic gain reported by the Honolulu Board of Realtors shows that the market is flirting with a price decline — something that hasn't occurred for one month vs. the same year-ago month since August 2001, when the median price eased 0.6 percent to $307,000.

"It looks pretty clear to me that the housing market is starting to come down," said Barry Warmkessel, a retired engineer in California who has been looking for a second home on O'ahu since May.

"I'm having second thoughts about buying over there — especially soon," he said.

The record median-price high for previously owned single-family homes was $668,300 in May. September's median was the lowest since $615,000 in April.

Local economists have generally predicted that O'ahu home prices will flatten over the next couple of years and not drop significantly unless there is a shock to the local economy that reverses job and income growth, creates a population exodus or boosts interest rates dramatically.

But the slowing price appreciation this year has been quicker than some expected, spurring some industry observers to begin predicting a price decline is in store for the market.

Last year, the median single-family home sale price rose 28.3 percent, which was the biggest increase since 30.4 percent in 1990.

This year, gains in the median price started strong at 21.8 percent in January, narrowed to about 10 percent by midyear, and in August was a meek 1.6 percent.

Even if median prices dip a little in the last few months, O'ahu's median home price should comfortably rise around 8 percent this year over last year.

What happens next year is uncertain. Harvey Shapiro, research economist for the Honolulu Board of Realtors, said he expects median prices in 2007 won't move up or down by more than $20,000 or $30,000 over this year's levels.

Jim Wright, president and chief executive of Century 21 All Islands, recently forecast that there could be a 10 percent drop in home values in the next 24 to 36 months.

Paul Brewbaker, chief economist for Bank of Hawaii, predicts that a year from now the single-family home median price should be about the same, though he said it would surprise him less if the price was lower by about $25,000 than if it were $25,000 higher.

Brewbaker also figures that when accounting for seasonal differences, prices have already declined from about $635,000 at the end of last year to $625,000, or 1.6 percent.

Prospective buyers such as Warmkessel don't want to buy a home only to see its value drop soon afterward and hand them negative equity.

"Hawai'i in the '80s and '90s saw a bump," Warmkessel said. "I see that bump coming again."

Dara Young, a 36-year-old renter in Mo'ili'ili isn't worried about a repeat of O'ahu's housing market crash in the mid- to late-1990s. But she is surprised by how fast the current market has slowed.

"I do think it is really softening," said Young, who has been searching to buy a condominium in town for about six months and feels that many properties are overpriced.

"It's been challenging," she said. "You need to do your homework and be patient. I'm not going to rush."

Patience has been a mantra for buyers of late, as more are holding off on purchases to see where the market goes. That has translated into weaker demand, helped push inventory up and is resulting in homes taking far longer to sell.

There were 359 single-family home sales last month, a 19.9 percent drop from 448 sales in September 2005.

There were 481 condo sales, a 37 percent decline from 764 a year earlier. The median condo sale price was up 11.5 percent to $320,000 in the same period, and was short of a record set in July at $329,000.

Inventory of single-family homes for sale last month was 2,005 units, which has been steadily rising from the prior low of 814 in April 2005 and hasn't been above 2,000 since 1998.

Condo inventory last month was 2,750 units, which is up from 935 in May 2005, which was the lowest in at least 20 years.

The median number of days property is taking to sell is 48 for single-family homes and 42 for condos, which means half sold in less time and half sold in more time. A year earlier, median sale times were about half what they are now.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.