A federal report suggests that O'ahu home values aren't as positive as indicated by local sales data, though the market appears to be on a path of improvement.

The Federal Housing Finance Agency yesterday reported that O'ahu single-family home values in the first quarter were down 4.5 percent compared with the same quarter last year.

The figure compares with a 4.4 percent rise in the median price for O'ahu single-family homes sold in the first quarter as reported by the Honolulu Board of Realtors.

It's debatable which assessment is more accurate.

Some observers consider the federal report a better measure of the housing market because of how it calculates values.

The agency, which is responsible for regulating mortgage finance giants Fannie Mae and Freddie Mac, uses sale and refinancing values of homes in one quarter compared with sale or refinancing values for the same properties a year earlier.

Because of the same-home methodology, the federal data more closely represent inherent property values.

The median sale price reported by the Honolulu Board of Realtors can be influenced more by the variety of homes sold, because the median is a point at which half the sales are for more and half for less. For instance, the median would be higher if newer and bigger homes make up more of the sales, or lower if more older and smaller homes are sold.

Yet there are also shortcomings to the federal calculation. One issue is that it represents relatively few transactions because it focuses on repeat sales of the same homes.

Another constraint is that it's limited to homes bought with conforming mortgages purchased or backed by Fannie Mae or Freddie Mac, which excludes a significant part of the market financed by subprime and jumbo loans. A good deal of the depression in the local housing market has been concentrated on properties bought with subprime loans.

Both assessments are generalizations of sales that may be up or down depending on the property.

For instance, property records show that a four-bedroom Mililani house sold for $600,000 in February, which was down 3.2 percent from the $620,000 it sold for in March 2008, though that was outside the federal report's year-over-year timeframe.

On the other hand, a three-bedroom Kalaheo Hillside house sold in March for $979,900, 5.4 percent more than the $920,000 sale price in September 2008, which again was outside the federal report's timeframe.

One sale in the report's timeframe is a three-bedroom Mililani home that sold in February for $590,000, 1 percent more than the $585,000 it sold for in January 2009, property records show.

Overall, the 4.5 percent decline in home values calculated by the report was the second consecutive quarter where the size of the decline was smaller than in the previous quarter. This suggests that the market may be on a path of recovery.

In the 2009 fourth quarter, the decline was 5.8 percent, which marked the first time since decreases began in the second quarter of 2008 that the size of the decrease was smaller than the previous quarter's decrease. The 2009 third-quarter decline was 6.5 percent, which followed a 5.9 percent decline in the second quarter and a 4.7 percent decline in the first quarter.

Compared with 301 other U.S. metropolitan areas, Honolulu, or O'ahu, had a home value change that was better than 185 other markets'.

Only 10 markets had home value gains. The strongest market was Kennewick-Pasco-Richland, Wash., with a 2.1 percent increase. The worst was Bend, Ore., with a 23 percent decline.

The agency also reported home values by state based on same-home purchases but not refinancing. The figure for Hawai'i was down 8.5 percent in the first quarter compared with a year earlier. Six other states had bigger decreases, led by Arizona at 13 percent.

Hawai'i's poor ranking is largely a result of a high concentration of foreclosures in Neighbor Island resort markets.

The national average for all states was a 3 percent decline. The state with the best value change was North Dakota with a 7.5 percent gain.