The Honolulu Advertiser reports from Hawaii. "Hawai'i developers aren't confronting ballooning inventories of unsold homes or falling prices like on the Mainland, but a few are offering special deals to keep the sales coming as buyer demand retreats."

"Corinda Wong, (an) agent who's been in the business 17 years, said she's aware of a few new-home projects offering incentives. 'I haven't seen a lot,' she said. 'It's just starting.'"

"At a 47-unit project in Makakilo, the developer last month ran a limited special giving buyers upgraded kitchen and laundry appliances, plus a two-point closing cost discount on loans through Towne Island Mortgage. Peter Aiello, president of Aiello Development, said the incentives were a response to 10 or 11 cancellations mostly from Mainland buyers."

"'That hit us hard, he said. A lot of Mainland (investors) have dropped out.'"

"To see incentives emerging at a few projects underscores the shift under way in the local real estate market that in the last few years had developers turning away buyers. Weaker demand is evident in O'ahu's resale market, where sales of previously owned homes fell 17 percent in the first 10 months of the year compared with the same period last year."

"Local developer Stanford Carr said some home builders were caught chasing the market too aggressively. Developers built homes at higher price points. But now with prices flattening, it's harder to sell higher-end homes that aren't affordable to the bulk of buyers. 'It's just an adjustment,' Carr said of incentives."

"The last time Hawai'i developers offered widespread incentives for home purchases was during the mid- to late-1990s market decline. During the market's downturn, median prices for existing homes fell 21 percent for single-family homes and 42 percent for condominiums."

"Market analyst Ricky Cassiday said developers regard price reductions as the incentive of last resort. 'It's blood in the water,' he said. 'If I wanted to boost my sales I'd be doing mortgage rate buy-downs and maybe things like flat-screen TVs.'"