I find it interesting to read through this almost a year later. I think you should have an answer by now.
Home prices will decline until they are at a point people can afford. By that, I mean banks are starting to revert to old time trends giving leases that people can afford on 1/3 of their take home pay. If a family makes $52,000 per year their take home will be about $3200 per month, 1/3 of which is $1075. My guess would be that prices will bottom out at about the $1200/month payment level for the average home in such an area. Some areas will, of course, be more expensive than others. But there must be an entry level market for move ups. I do not think Hawaii will be any different although prices may trend lower as other costs are higher and the recession is likely to limit the second home market for folks from outside the state.