Against a backdrop of escalating property values and the high cost of construction, housing starts on the Vineyard fell in 2004 for the second straight year.

A total of 1,210 building permits from the Island's six towns were issued in 2004, down seven per cent from the 2003 total of 1,300 and eight per cent from the 1,311 permits granted in 2002. Four of the Vineyard's six towns saw drops in the number of total building permits issued; only Aquinnah and West Tisbury saw increases.

The number of single family dwelling starts also fell. Of the six towns, only Tisbury saw an increase, up 25 per cent from last year. By contrast, single family dwelling starts in West Tisbury dropped by that same amount, while Oak Bluffs saw a decrease of 20 per cent from last year.

Yet, in concert with the rising price of building materials, estimated construction costs last year rose slightly from 2003, up over $5 million, or four per cent. Materials such as plywood have seen sharp spikes in price in recent years, and some building inspectors estimate the cost of building a house, per square foot, has increased by 50 per cent in only several years.

"I wouldn't be surprised by that figure," said Ernest Mendenhall, West Tisbury building inspector. "I think expenses are playing a role. I'm somewhat floored by the costs now."

Around the Vineyard, it appears home and land owners share those concerns. In Chilmark, the total number of building permits dropped from 83 in 2003 to 76 last year. Housing starts for single family dwellings in Chilmark have dropped consecutively since 1999, when 43 permits were issued. The town adopted a building cap bylaw in 2000 limiting new house permits to 18 each year.

Edgartown has also seen a steady decline in the number of housing starts in the last three years. Single family dwelling permits have fallen steadily from 93 to 73, and total permits have slipped 10 per cent as well.

Leonard Jason Jr., the building inspector for both Chilmark and Edgartown, said the rising construction costs reflect the types of homes being built.

"What has changed is the size of these houses," he said. "I would guess that in 1986 when I started as building inspector, the size of an average house was around 1,500 square feet. Now, you're looking at much more expensive land, and as a result, the homes are bigger. My gut says now that number is closer to 2,600 square feet."

He also noted that in both Edgartown and Chilmark, tear-downs, the demolition of a preexisting structures in favor of a new building, are on the rise. There were 45 demolition and rebuild permits issued in Edgartown over the past three years; this year, almost one-third of new house starts in Chilmark were tear downs.

"It's just what happens when undeveloped land is more expensive and harder to come by," he said.

Permits for in-ground swimming pools were also notably higher, especially in Edgartown where 22 were issued, Mr. Jason said.

Not all towns are witnessing a decline. New housing starts in Aquinnah have remained steady over the last three years. Like Chilmark, the town adopted a bylaw in 2000 to limit development, allowing for up to nine permits for new single family dwellings - six standard permits and three resident homesite permits.

"Development really spiked in the eighties, when the town issued about two dozen permits," said Aquinnah building inspector Jerry Weiner. "With the bylaw, the town has reached an equilibrium."

Housing starts in Oak Bluffs have also been relatively steady over the last three years, despite a significant drop last year, and has issued the highest number of permits of any Island town in each of the last three years.

Mr. Mendenhall said West Tisbury's statistics paint a fairly clear picture of what is happening not only in his town, but across the Island.

"A lot of what I saw last year was more renovations, or more minor repairs, than new housing starts," he said. "And I think that's because prices are so high."

But in the same breath, he cautioned against trying to make any predictions.

"While we issued a lower number of permits for single family dwellings this year, I wouldn't be surprised if we had slightly more next year," he said. "It's difficult to find patterns."

One trend he did note was the increase in modular houses in the past several years, perhaps another result of the increase in square-footage construction costs. Modular homes are pre-manufactured and shipped to the Vineyard, and cost significantly less compared to the square-footage costs associated with standard construction.

"There are definitely more going up on the Island," Mr. Jason agreed. "Right now, it's just good economics. It's just keeps getting more expensive to build a house here."