The Honolulu Advertiser reports from Hawaii. "There's been a dramatic turn in O'ahu's residential real estate market in the last year. It's as though value is evaporating into the salty air, $50,000 here, $150,000 there, $720,000 in Michael Choi's case."

"Choi thought he had a $1.8 million Hawai'i Kai house ready for a quick and easy sale last November, but following nearly a year with no offers, he has cut his price to under $1.1 million."

"Not only are more sellers dropping their asking prices, but more properties are selling for below list price. The trend is clearly benefitting buyers and frustrating sellers."

"'The sellers are still a little bit out of touch with reality of where the market is,' said agent Bryn Kaufman. 'They're pricing initially higher and they don't get any offers, and then they lower their price. The buyers are in a mindset where they feel the market has peaked. There's a lot of inventory, and they're looking for deals. It's a battle of two mindsets.'"

"According to Kaufman, about 70 percent of single-family homes this year sold for below their list price, compared with about 50 percent a year earlier."

"According to O'ahu home sale data, there were 1,798 cases of sellers dropping their asking price last month, compared with only 633 a year earlier. The number of price drops for homes on the market, which includes more than one drop for the same property, has been steadily rising from 1,081 in January to 1,604 last week. The average drop for single-family homes was 7.6 percent."

"Lowering an asking price can give sellers the depressing feeling that a good part of their home's value has evaporated rather substantially."

"About 18 months ago, a disability forced Dolores Martinez to retire and refinance her Punalu'u home, but higher mortgage payments became unaffordable. Martinez said she had to sell, and in April with a broker's assistance listed the three-bedroom house 'steps from the ocean' for $775,000."

"There was little buyer interest. 'One person looked, and that was in the door and out the door,' Martinez said. In July, Martinez dropped her price to $675,000, and then to $550,000 last week, a collective 29 percent reduction."

"If her home sells for $550,000, Martinez, who plans to move to the Mainland, said she can live with it. 'It wouldn't be good, but I'd be all right. I hope it sells soon.'"

"The median list price on O'ahu hit a peak in May 2005 at $850,000 and now stands at $770,000. Median list prices for single-family homes have been below their year-ago levels in each month this year except January."

"Many sellers have been slow to accept that the top of the market has passed. 'It's taken them a while to agree that the heat has gone out of the market,' (broker) Jim Wright said. 'People are starting to realize it's slowing down,' added broker Rob Burns. 'Prices are going down to where they ought to be.'"

"Choi, the Hawai'i Kai home seller, was one who got caught expecting buyers would keep bidding up values. Choi at the time had been a real estate agent for about two years and felt buyers would snap up the 1,668-square-foot house with three bedrooms, two-and-a-half bathrooms and a pool. List price on Nov. 8, 2005: $1.8 million."

"'It was pretty bad timing,' he said. 'The real-estate cycle was so good up to that time. Now I can say that that was the top of the market, but I couldn't see that at that time.'"

"Choi in January reduced the price to $1.58 million. By May it was $1.38 million, and then $1.23 million in July. Still, no offers. Now Choi said he plans to bring the price down to $1.08 million and install new carpet and paint."