Part of Oahu’s housing market took a thumping in 2022 as surging prices and mortgage interest rates sapped the wherewithal of many people to buy homes.

The number of sales for previously owned single- family homes sank 23% in 2022 to 3,474 from 4,526 — the biggest year-over-year decline since 2008 amid a recession, according to Honolulu Board of Realtors data released Friday.

Condominium sales also dropped, by 12% to 6,353 from 7,203, and represented the second double- digit decline in three years for the condo market.

The sale volume slumps were driven in large part by surging mortgage rates and prices rising to new peaks.

Single-family homes on Oahu sold for a record median $1,105,000 in 2022, up 12% from $990,000 the year before, while the condo median sale price rose 7% to a record $510,000 from $475,000.

Interest rates, meanwhile, more than doubled from about 3% on average at the beginning of 2022 for a 30-year fixed-rate loan to 6.4% at the end of the year after hitting 7.1% in November, according to mortgage buyer Freddie Mac.

“While Oahu’s real estate market started the year strong, the steep rise in interest rates and fluctuation in inventory are shifting the market dynamic,” Fran Villarmia-Kahawai, president of the Honolulu Board of Realtors and an agent with Properties International Ltd., said in a statement. “We’re experiencing a real estate market in transition.”

The University of Hawaii Economic Research Organization noted in a December report that a monthly mortgage payment for a median-priced house on Oahu, assuming a 20% down payment and a 30-year fixed-rate loan, would be $5,560, compared with $3,390 a year earlier.

“The housing market has weakened significantly and faces the possibility of a sharper downturn,” the UHERO report said.

Mike James, president of Coldwell Banker Realty on Oahu, noted that the sales volume decline in 2022 followed a strong increase in 2021, when single-family home sales surged 18% and condo sales soared 53%.

“Certainly, there was a change (last year), but we had such a historic run-up as well,” he said. “Sooner or later — and interest rates certainly contributed to it — there was going to have to be a slowdown or correction, and that’s what’s happening.”

James said it appears that the shock of where interest rates are at is wearing off for many prospective homebuyers, and he is hopeful that there will be a positive change in the market during the second half of this year.

“There is still low inventory, so I don’t expect prices to go through the floor,” he said.

UHERO forecasts that median sale prices for Oahu homes will decline moderately this year, by about 8% for single-family homes and about 6% for condos, and then slip by a little under 2% in 2024 before starting to rise again.

While median sale prices rose pretty consistently throughout 2022, a robust sales volume decline took hold midyear with year-over-year drops over 20% in every month since June for single-family homes and in every month but one since July for condos.

In December there were 202 single-family home sales, down 47% from 378 sales in the same month the year before. For condos the number of sales fell 39% to 360 from 593 in the same period.

Chad Takesue, chief operating officer of brokerage firm Locations, said in a report released Friday that it is still a seller’s market on Oahu but that sellers should price their homes conservatively and prepare to make some concessions that they may not have had to consider a year ago.

Honolulu Board of Realtors data show that it would take just over two months to exhaust single- family home inventory if no new listings were added based on inventory and sales pace in December, up from about three weeks in the same month the year before. For condos this measure was about two months in December, compared with about a month and a half a year earlier.

Also, the median number of days a home was listed for sale before receiving an accepted offer was 25 for single-family homes in December, compared with 11 a year earlier. For condos this figure was 21 in December, up from 13 a year earlier.

“While higher borrowing rates are presenting challenges for some buyers, home prices are beginning to level off and even decline in a few neighborhoods,” Takesue said in the Locations report. “We expect to see a further softening of the market this year, as buyer demand has tempered a bit in some neighborhood markets due to concerns about the economy or affordability attributed to the higher rates and prices. Determined buyers who are still in the market for a new home will have more choices — and more time to weigh their decisions — than in recent years. They’ll also have greater bargaining power.”