The median sales price of a single-family home on O'ahu fell to $569,000 in June from $625,000 in the same month a year earlier, but the volume of sales rose for the first time in two years, indicating that lower prices were luring more buyers back into the market.

The $56,000 — or 9 percent — price drop, reported by the Honolulu Board of Realtors, continues a slide in O'ahu median home resale prices that began as a small one last year but has grown close to 10 percent for this year, through June. For all of last year, the median price dipped just 3 percent.

Nonetheless, there were some signs that the housing market is recovering in the Board of Realtors' monthly report. June's median price was up from $550,000 in May. And the 254 homes sold in June were 9.5 percent more than the 232 sold a year earlier. It was the first increase in two years, said Harvey Shapiro, a research economist for the Board of Realtors.

In addition, homes that sold in June spent an average of 45 days on the market before selling, the shortest period of any month so far this year. Also, the inventory of unsold homes fell to 1,700 in June, down 18.3 percent from 2,080 a year earlier.

Honolulu has fared better than many Mainland housing markets, some of which have seen their median prices tank 30 percent or more, in some cases due to huge inventory overhangs produced by developers — something that didn't happen significantly in Hawai'i.

"The available inventory continues to be quite low and this appears to be the reason for the small decreases in home prices for Honolulu compared with the sizable declines for Mainland cities," Shapiro said.

Still, it probably will be several years before the Honolulu housing market returns to a more normal sales pattern, said James Wright, president and chief executive officer of Century 21 All Islands.

"We're doing better coming into summer pretty much across the state. But as much as we get excited, we're probably a couple of years from working our way through this process in Hawai'i," Wright said. "This by far is the worst mess that has hit the state housing market in the 20 years I've been following it."

He said the recession, along with tightening lending standards, is making it much more difficult for borrowers to get mortgages.

"We're having trouble with appraisals knocking deals down. Some people don't even want to apply for a loan because of the documentation. And troubles at Fannie Mae and Freddie Mac have pretty much sunk the lending market."

In O'ahu's condo market, the median price in June fell 5.3 percent to $310,000, from $327,500 a year earlier. In terms of month-to-month changes, the June median condo price was up from $305,000 in May.

There were 293 condos sold in May, down 17.3 percent from 355 a year earlier.

Board of Realtors president Sandra Bangerter said she was encouraged by some of the single-family sales data, including the boost in sales volume and decline in days on market. She also noted that June's median price for both homes and condos was up from May.

"We don't want to seem overly optimistic, but it looks like we could be nearing the bottom of the current market slump," Bangerter said.