Michael Baxter and Janice Jensen signed the deal for their Kaneohe townhouse on the back of a surfboard in January, but it was well into spring before they owned it.

“;We qualified pretty easily, but it was still difficult because we were dealing with Countrywide,”; Baxter said. “;They were doing so many re-fis that they kept putting us on the back burner.”;

The couple was ready to walk away from the $639,000 deal when complications eased and they became the proud owners of what they like to call “;the most expensive boat slip ever,”; Baxter said.

With so many lenders inundated with applications for mortgage refinancing, loan modifications, short sales (where lenders agree to accept less than what is owed) and foreclosures, “;hurry up and wait”; has definitely become an unpleasant aspect of an already slowing market. Still, there is good selection and value for cash buyers or those who get approval fast enough to lock in interest rates, said Walt Harvey, a real estate broker and certified distressed-property specialist with East Oahu Realty.

Sales and prices of single-family homes and condominiums continued to fall last month, the Honolulu Board of Realtors reported yesterday. The number of single-family home resales fell 10.7 percent in May to 225 from 252, and the median price dropped 15.3 percent to $550,000 from the year-ago $649,500. Condominium resales dropped 31.2 percent to 263 from 382, while the median price fell 9.6 percent to $305,000 from the year-prior $337,300.

Since the first of the year, short sales have comprised half of Harvey's business, which given his concentration has risen 10 percent year over year.

“;I'm seeing a lot of short sales, and I'm seeing a lot of frustration,”; Harvey said. “;The system is so clogged up, and the lenders keep changing ownership.”;

Even Washington Mutual, one of the faster companies, is taking a minimum of 45 to 60 days to respond to short sales, he said. In the meantime, as prices continue to go down and prospective buyers continue to look, some of them are walking away, Harvey said.

“;There are plenty of buyers out there shopping, but they only jump when they perceive a really good deal,”; he said.

Deals abound in the conventional market, too, and as a result, overall inventory is shrinking, said Chason Ishii, president of Coldwell Banker Pacific Properties.

Single-family home inventory fell 17.5 percent to 1,739, and condominium inventory dropped 11.4 percent to 2,438, Ishii said.

“;The inventory for single-family homes is the lowest that we've seen since April of 2007,”; he said.

Low inventory on Oahu continues to keep demand more stable than in many mainland cities, said Harvey Shapiro, HBR research economist.

“;In an otherwise lackluster housing market, these positives may predict a turnaround for real estate, even as the state's economic conditions continue to deteriorate,”; Shapiro said.

Limited inventory pushed prices in May, Ishii said.

In May, 10.6 percent of all closings were at or above the list price as compared with 6.6 percent a year ago, he said.

Well-priced properties are still selling, said Scott Higashi, executive vice president of sales for Prudential Locations LLC.

“;The number of sales in May are the highest that they've been this year, which is a positive indicator,”; Higashi said.

Also, energy has begun to return to Oahu's high-end market, whose movement tends to lead any given real estate cycle, Ishii said. “;We saw 46 $1 million-plus properties go into escrow in May,”; he said. “;That's up from 28 in March and 34 in April.”;

Pat Choi, president and principal broker of luxury real estate firm Choi International, said sales of $5 million properties doubled for her last month.

“;The fear factor seems to be subsiding,”; she said.