So what will happen with real estate in 2008? Simply put, more of the same.

A little history first. The current real estate sales expansion started in the middle of 1997 and lasted into 2005. Annual sales of residential housing on O`ahu peaked at 12,607 dwellings in 2005, including single family homes and condominiums. The trough, or bottom, of the market occurred in 1996 when sales were only 3,739. This year should finish with about 9,200 units.

In 2008, my best guess is that there will be further slowing in the market, but at a diminishing rate. My prediction for 2008 is that sales will be in the range of 8,000 to 9,000 housing units.

Last year I predicted that median prices would remain in a narrow range, plus or minus 5%, compared to 2006 prices. This turned out to be pretty accurate, as it looks like we'll end 2007 with single family home prices up 2.4% and condominium prices up 4.8%.

Will current O`ahu prices hold throughout 2008? I believe there's a good chance they will. Many Mainland markets are now experiencing price deflation but the economic conditions in Hawaii, though weakening, remain strong. Factors could change, however, given the unknown depth of fallout from the sub-prime markets and the national economic slowdown which could lead to further weakness in the housing market.

These are my predictions. What are your expectations for 2008?