The inventory of unsold Martha's Vineyard real estate is building, and prices are falling on those Island properties that do sell.

The latest property analysis from LINK, the listing service based in Vineyard Haven, confirms what Vineyarders increasingly have been sensing: that the Island real estate market is slowing down compared to last year, let alone the past few years.

"We have been in a slowing market, with most of the properties that we've sold in 2006 having a price reduction, or several price reductions," said Kathy Sollitto, owner of Sollitto Associates in Vineyard Haven. "The values that once were have changed."

As of June 30, the inventory of unsold properties for sale on the Vineyard totaled 590, an increase of 151, or 34 per cent, from June 30 of last year.

The number of unsold parcels of land rose 32 per cent to 111, while the number of unsold properties with houses, buildings or condominiums on them rose 26 per cent to 479.

Sales of properties with buildings fell 29 per cent to 94. Sellers waited a median average of eight months between listing and selling their properties.

Sales of land rose six per cent to 19. Sellers waited a median average of five months between listing and selling their land.

Compared with a year ago, Ms. Sollitto said, properties are taking longer to sell and requiring more conservative pricing. If sellers have a certain price in mind and can afford to wait, she said, they probably should pull their listings from the market. She knows of a number of sellers who have done just that.

A review of Vineyard sales in the second quarter - the three months ended June 30 - show that nearly every property sold at or below its asking price.

Examples: After sitting on the market for more than a year, a 7.1-acre property with a contemporary house on Boldwater Road in Edgartown sold May 22 for $3,876,000, $774,000 less than the asking price. A farmhouse on 2.2 acres on Middle Road in Chilmark sold May 15 for $2.05 million six months after being listed at $2.5 million.

A mansard on New York avenue in Oak Bluffs sold for $630,000 on April 11, almost two years after being listed for $659,500. A contemporary on Clark avenue in Vineyard Haven, first listed for $449,000 in May 2005, sold April 6 for $400,000.

Ms. Sollitto said she first noticed the slowdown in the market a year ago, when more expensive properties began to take longer to sell than in recent years.

She said the trend now has spread to less expensive properties. Of the properties that have been selling in recent months on the Vineyard, Ms. Sollitto said, many have been on the market for more than a year. Buyers, she said, are alert to the change.

But Tom Wallace, owner of Wallace & Co. in Edgartown, said observers should not confuse failures to realize full asking prices with lower property values. Mr. Wallace said he would contend that values are continuing to appreciate when compared sales prices are compared with sales in the past year or two in the same neighborhood.

"I don't think our course is too far off," he said. "I expect the fourth quarter to be quite strong. I think we're going to see the activity level pick up."

Mr. Wallace said that he's seeing more inventory in the Vineyard market, but added that property moves efficiently if it's priced properly.

Other positive trends that he spies includes the sale of a number of more expensive properties to abutters, who want to use the purchased property as part of an expanded family generational gathering place; the relative lack of speculation in the market, especially when compared to the past three decades; far less debt in the marketplace, and usually little or no debt on more expensive properties; and the draw of the Vineyard for people who actually plan to live at the property, rather than use the real estate principally for an investment portfolio.

Mr. Wallace, who has sold Vineyard real estate for the past 30 years, counseled against looking for general trends in the Island market, which he said tends to be more sporadic.

"The Vineyard market literally goes in spurts rather than a steady trend of every day, every week, every month," he said.