Oahu’s housing market in January posted modest increases in sales volume and median prices compared with the same month last year, extending relatively strong growth into a potentially third straight year.

The median sale price for previously owned single-family houses was $629,500 last month, up 6 percent from $595,000 in the same month last year, according to the Honolulu Board of Realtors data released for publication today.

The University of Hawaii Economic Research Organization predicts that single-family house median sale prices on Oahu will rise about 11 percent this year based on factors that include relatively strong buyer demand, job growth, an expanding economy, relatively little new home construction and interest rates that aren’t expected to rise a lot.

Last month’s median price looked relatively weak compared with the $650,000 median price for all of 2012 and a $685,000 median price in December that tied a record for any month, set in June 2007, during the last housing market boom.

Julie Meier, president of the Honolulu Board of Realtors and an agent with Prudential Locations LLC, said the December-to-January drop wasn’t unusual and can be attributed to seasonal variations in the market.

"January was a good month for the industry," she said in a statement.

Economists generally say that year-over-year comparisons are the most meaningful because they aren’t influenced by seasonality.

Still, some observers have doubts that 2014 will be another strong year for home price appreciation. Mike Gallagher, principal broker and owner of his own residential real estate firm in Kailua, predicts that median prices and sales volume for Oahu single-family houses will be flat this year.

In January the number of Oahu single-family house sales rose 8 percent to 246, up from 227 a year earlier. In Oahu’s condominium market the median sale price rose 2 percent to $320,000 last month from $315,000 a year earlier. The median for all of last year was $332,000, an annual record.

There were 310 condo sales last month, up 8 percent from 286 sales a year earlier.

Gallagher’s forecast for the local condo market this year is for a 5 to 7 percent rise in sales but a median price decline between 1 and 5 percent.

UHERO, which doesn’t forecast sales volume, projects a 7 percent median price rise for condos.

One key element influencing home sale prices is the inventory of homes for sale in relation to demand. Honolulu Board of Realtors data show that if purchases continued at last month’s volume and no new homes were put on the market, inventory would be exhausted in 2.8 months for single-family houses and 2.9 months for condos. Generally, a figure less than six months puts upward pressure on prices. Between six and 10 months is considered a balanced market.

There were 1,159 single-family houses on the market at the end of last month, which was up from 943 a year earlier and 1,092 in December. Condo inventory at the end of last month stood at 1,564, up from 1,329 a year earlier but a bit lower than 1,576 in December.