As Martha's Vineyard approached and then passed the millennium, the Island could rely on one wintertime certainty: Lola's, the restaurant at the bend on Seaview avenue in Oak Bluffs, would be open for business.

The 200-seat restaurant was a magnet for off-season life, a place where families looking to eat, couples looking to dance, and amateur hockey players looking to unwind all felt at home.

But this winter, the parking lot at Lola's is quieter than the waters of Vineyard Sound lapping the shore a few hundred feet away.

A few months ago, the management of Lola's voted to change the restaurant's alcohol license from annual to seasonal.

These days, when you call Lola's, you hear in part the following message: "At this time, we are closed for the season and will re-open April 1. Thank you for a wonderful 2004 season, and see you in the spring."

A couple of miles away, things are anything but quiet at the Martha's Vineyard Shipyard in Vineyard Haven.

"We are very busy," shipyard owner Phil Hale said Wednesday. "We have a larger crew than we've ever had in the wintertime."

Shipyard clients who a decade or two ago had one boat have graduated to two or more boats. Mr. Hale said it's common for clients now to have a Boston Whaler as well as a larger sailboat or powerboat.

"We're working away as hard as possible to get everybody ready in April," he said. "People just really want their boats to be in good shape."

Welcome to the Vineyard economy of early 2005, where Advest broker and Tisbury selectman Ray LaPorte says the operative word is "mixed."

The Island is a place where year-round restaurants such as Lola's in Oak Bluffs and Atria and Espresso Love in Edgartown have shifted from annual to seasonal operations.

It's a place where Steamship Authority passenger traffic has dropped to 1997 levels. It's a place where winter business has grown so slow in Edgartown that merchants have decided to resurrect the town's board of trade.

But the Vineyard is also a place where the value of real estate is racing upward, pushing the aggregate amount of money spent to buy property higher even as the number of transactions remains more or less flat.

These are neither the best nor the worst of recent times on Martha's Vineyard: certainly slower than the late 1990s, boosted by the stock market boom and the Clinton summer White House, but far better than the recession of the early 1990s.

Mr. LaPorte said what's happening with the Vineyard economy also may reflect in part an underlying shift in the kind of visitor coming to the Island, from day tourist to seasonal renter to second-home owner. That would help explain why the number of Steamship passengers is falling, while the retail mix trends away from T-shirt shops to home-oriented stores and the price of real estate shoots up.

Last year, the Steamship Authority carried 2,673,159 passengers from the mainland to the islands of Martha's Vineyard and Nantucket, off 169,158 from the prior year.

Since 2002, Steamship Authority general manager Wayne Lamson said, the overall market in July and August - the height of the season - has declined for passengers traveling to and from the Islands, with the Vineyard market falling 11 per cent.

Passenger traffic between the mainland and the Vineyard peaked in 2002, when the boat line carried 2,401,286 people on the route. Last year, passenger traffic between the mainland and the Vineyard fell to 2,164,169 - essentially at a level last seen in 1997.

Meanwhile, real estate brokers are among the Vineyarders wearing the biggest smiles these days.

"This has been a very, very strong year," said Suzanne Lanzone, the owner of Hob Knob Realty. "We've seen price values increase at all levels. This January, there hasn't been a lull."

In 2004, more money was chasing the same number of properties. The numbers are borne out by the year-end numbers at the Martha's Vineyard Land Bank, which realizes a two-per cent fee on most arms-length transactions.

The number of property transactions on the Island crept up two per cent to 1,696, according to the land bank, while overall revenues generated for the land bank jumped 36 per cent to $11,163,794.

That reflects an aggregate market of at least $558 million, more than $140 million more than the group of qualifying properties in 2003.

But Deborah Hancock, the owner and principal broker at Hancock Real Estate in Chilmark, said sellers shouldn't necessarily be looking for large jumps in the value of their listing, or for a more rapid sale.

Up-Island, Ms. Hancock said, "Prices didn't go down, they sort of leveled off. People are taking longer to see what's there."

In most cases, she said, people are getting pretty close to their asking prices. But off-Island owners used to selling mainland properties in weeks or even days also need to realize that a Vineyard sale can take six months to a year.

One area where the rise in real estate values may be too much of a good thing is in the seasonal rental market.

Sharon Purdy, the owner of Sandpiper Realty in Edgartown, said owners who see rising real estate values are tempted to seek higher rents. But she said doing so can price returning tenants out of the market, and that new tenants aren't necessarily going to step forward to take their place.

More tenants are looking to negotiate rents, she said. And while demand remains high and supply low in areas such as Edgartown village, inventory of available rentals is increasing in areas of the town such as Katama and Edgartown Estates.

Over at the Harbor View and the Kelley House hotels in Edgartown, advance bookings are ahead of where they were last year, general manager Dick McAuliffe said.

Meanwhile, Mr. McAuliffe said, revenues last year were exactly flat with 2003. The less-good news is that both years trailed what the hotels made in 2002.

While the Vineyard remains a hot summer destination, Mr. McAuliffe said, the Island no longer is the red-hot draw that it was during the 1990s, when President Clinton and his family vacationed on the island. Mr. Clinton's surrounding entourage and the media rented dozens of Island hotel rooms, providing a direct boost to the hospitality business.

Then came the terrorist attacks of Sept. 11, 2001, putting a damper on the American economy in general and on the travel industry in particular.

Vineyard retailers also experienced a mixed bag in 2004. Kerry Scott, an Oak Bluffs selectman who runs Good Dog Goods in Vineyard Haven, Oak Bluffs and Edgartown, said Wednesday that she had a great year last year, but that she's learned from networking with other retailers that she was one of the few who did so.

Last year broke the traditional retail pattern for Vineyard stores in that July was stronger than August, Ms. Scott said. She said she's also concerned about the off-season retailing environment in Vineyard Haven and Edgartown. Meanwhile, she said the historically summer-oriented town of Oak Bluffs is showing more year-round economic vitality.

Ms. Scott said the Island should make an extra effort to preserve those things that make the place attractive to all visitors, such as its beaches and parks.

Also, she said, while the Vineyard finds itself playing host to increasingly affluent customers, "We need not to price ourselves where we're not attractive to the family market."