Can real estate prices rise while sales slow down at the same time?

In Hawaii it can. While the number of sales dropped off by almost 3% last month compared to last year, prices are now still up 19.1% and we still continue to see them rising.
My experience over the last 30 days, while the stock market has been nearly crashing, is that anything priced correctly will be bid up by 100K or more with multiple offers.
As of today, there are still very few listings available. In Hawaii Kai, there are only three homes available under 1.5 million.  In Kailua, there are 11 available, but they are all in need of renovation. If you want a nice home in good condition, it’s still well over 1.5 million in those areas.
While interest rates are now over 5% for a 30 year fixed mortgage, our listings are still getting cash offers with prices getting bid up by multiple cash offers.  It's amazing how much cash people have these days. 
The bottom line in Hawaii is there is a lasting inventory shortage, and we still need a lot more listings available in order for the market to stop rising. 
The North Shore has only three homes available under $1.5 million. And between $1.5 and $2 million there are only 2 homes available.
So while the number of sales is dropping due to low inventory and higher interest rates, prices continue to rise, and I see them still rising another 5% to 10% this year.