The average sale price of residential real estate within Hawai'i vacation resorts fell during the second half of 2007, and is likely to drop again this year in the wake of declining sales, according to a new study.

Sales of new and previously owned condominiums, single-family homes and house lots at master-planned resorts statewide such as Wailea and Hualalai declined 20 percent last year to 1,535 properties. Although average prices rose 22 percent to $1.6 million for the full year, prices tumbled during the final two quarters, suggesting a trend of lower prices has already been set up, according to an analysis by local real estate researcher Ricky Cassiday.

Cassiday said the drop in sales and the rise in average price was largely brought on by an exodus of speculators who had been dealing mostly in resort homes priced under $1 million.

"That market is a heavy speculator market, and the speculators really left en masse," he said. "It dried up."

The exit by speculators resulted in fewer transactions in the lower price range, which in turn boosted the average price because more high-end property sales were left, representing a greater share of total sales.

Last year, 761 of the 1,535 resort property sales were for under $1 million, down from a year earlier when 1,119 of 1,914 sales were under $1 million.

At the high end, there were 160 sales for more than $3 million last year, up from 133 in 2006.

But Cassiday predicts that an expected third year of fewer resort home sales due to waning investor demand will bring down average sale prices this year.

"Unlike earlier market cycles, prices have not fallen back in the face of slower sales,"he said. "We think we are near this tipping point."

Still, developers of million-dollar-plus resort homes are betting that there are plenty of wealthy individuals seeking Hawai'i vacation property to keep demand relatively strong.

According to Cassiday's report, some of the big development projects that contributed to resort home sales last year were Kai Malu at Wailea on Maui, where there were 86 condo sales at $1.27 million on average, and Hali'i Kai at Waikoloa Beach Resort on the Big Island, where there were 74 condo sales at $1.15 million.

At the high end, there were 17 condo sales at Hualalai Resort on the Big Island for an average $2.67 million, and 25 condo sales at Ho'olei in Wailea for an average $2.79 million.

The priciest sale was a 2.6-acre oceanfront estate at Mauna Kea Resort that sold for $29 million. The six-building residence was built in 2000 with three guest houses, an 80,000-gallon saltwater river stocked with exotic reef fish, and a main house featuring a 2,000-bottle wine room.

The complex was developed and sold by John Hoffee, a retired medical-supply company founder. The buyer, according to property and business records, was a partnership affiliated with a family trust of Cirque du Soleil's founder and CEO, Guy Laliberté.

Cassiday's report showed that sales of previously owned property represented roughly 800 sales compared with the nearly 700 sales of new property sold by developers.

The report counted residential property sales at only master-planned communities with resort zoning, which would include sales at Ko Olina Resort & Marina but exclude sales in Waikiki.