The turmoil in Congress over the proposed rescue of the financial industry continues, as do the mounting real estate losses in some communities on the mainland, but for now both are still far removed from Hawaii's real estate market, local experts said last night during a round-table discussion.

Hawaii will not experience the real estate meltdown as seen on the mainland, but despite more positive market fundamentals, sales are likely to continue slowing and average prices are likely to remain flat though year's end. However, there still will be some winners in real estate in 2008. Those who weed through neighborhoods to identify good values likely will come out ahead.

That was the opinion of three renowned Hawaii real estate experts - Bank of Hawaii Chief Economist Paul Brewbaker, Prudential Locations Chief Executive Bill Chee and Mike Sklarz - who shared their thoughts during “;Real Perspective 2008: The State of Hawaii Real Estate.”;

Hawaii's low rate of foreclosure and stable mortgage industry insulated it to some degree from the housing troubles on the mainland, Brewbaker said.

“;While home sales in Hawaii have been declining since the end of 2004, home values across the Hawaiian Islands have remained more stable than mainland counterparts,”; he said.

Severe building permit restrictions also have kept inventory low and demand strong, Chee said.

“;We really have a crummy city and state government. They have severely restricted building permits,”; he said. “;But, we really have to thank them. There's a lot less housing stock here.”;

That said, appreciation in the Hawaii market cannot be taken for granted in 2008. It is still all about location, Chee said.

“;Some specific neighborhoods will experience declining pricing, while others will show stable or increasing prices,”; Chee said.

The subprime situation, which has resulted in less Hawaii investment from heavily affected markets like California, could be responsible for slowing in some Hawaii neighborhoods, Sklarz said.

“;A large concern is the subprime situation causing California home prices to decline more significantly, such that investors and second-home interest is impaired,”; he said.

Sklarz added that while there is potential for growth from international markets, such as China, it is not likely to offset the losses for several years.