Oahu's residential real estate market is near or at the bottom, and prices will likely stay the same for a year or two.

However, limited supply and increased demand will cause prices to take off much as they did between 2004 and 2007, local experts said last night.

Hawaii's status as a globally sought-after, supply-constrained coastal market might help offset the possibility that looming foreclosures could hurt Hawaii's real estate market or that the inevitable end to historically low interest rates and federal tax credits might lessen demand, the experts said.

Oahu's real estate market will continue to improve as the state's economy recovers, more jobs are created and buyers begin to perceive that the market is speeding up.

That was the opinion of Paul Brewbaker, principal of TZ Economics; Prudential Locations Chief Executive Officer Bill Chee; and Mike Sklarz, president and CEO of Collateral Analytics, who shared their thoughts during “;Real Perspective 2010: The State of Hawaii Real Estate.”;

“;We may see another few years of sideways (unchanged prices), but the worst of the decline is over and we are in a rebuilding phase,”; Sklarz said.

Fueled by low rates and tax credits, home sales on Oahu started fast in 2010. Single-family home sales rose nearly 33 percent in January while condominium sales climbed

43 percent, compared with a year earlier, according to the Honolulu Board of Realtors.

Home prices were up nearly 11 percent to a median price of $597,500, while condo costs dipped by 2 percent to a median of $299,000.

“;If you are a Realtor, it's time to put on your happy face,”; Chee said, adding that the market has become favorable to first-time buyers, trade-up and trade-down buyers, as well as speculators.

Since Oahu home prices tend to reach peak appreciation every 10 years or so, Sklarz said he expects to see meaningful gains in a couple of years with the market peaking in 2015 or 2016.

“;There was a bubble in Phoenix and Las Vegas. This was not a bubble. It was a housing cycle,”; Brewbaker said.

“;By the mid- to late teens, if you haven't gotten on the train, you'll wish you had.”;

Sklarz said Oahu's real estate market hits peaks every decade or so because its residential real estate inventory is “;chronically undersupplied”;; however, demand from locals and outsiders stays constant.

And, right now, new building permits are at their lowest level before statehood, Brewbaker said.

“;We are not building homes at a pace adequate to endow newborns with a home of their own,”; he said.

Because of Oahu's severe supply constraints, price could be less of an issue this year than speed of transactions, Chee said.

“;Buyers dictate the market. Generally, when you have a lot of buyers, the market improves,”; Chee said, but he added that velocity could slow in 2010 due to lack of inventory.

If that happens, prices could remain the same for a while, he said.