The price of the typical home on Martha's Vineyard fell for the first time in six years in 2006, as buyers left the market and sales figures dropped by nearly 30 per cent.
The median price for properties was down to around $690,000 in the third quarter of 2006, a fall of almost six per cent compared with a year earlier when the median price was around $732,000.
Further emphasizing the slowing, the time most homes are on the market before selling has blown out considerably to eight months, which is two months more than last year and double the time of 2001.
Over the first three quarters of the year, sales were down 24 per cent on the previous year. Land sales were down 35 per cent compared with 2005 and more than 50 per cent compared with 2004.
And while complete figures for the fourth quarter are not yet in, industry experts are expecting the market to continue to trend down or at best stay flat.
Meanwhile, agents' inventories of properties for sale were up around 30 per cent throughout the year.
All are signs of a slowing market, but it is the median price which is most significant, said Eleanor Wilson, the owner of Link listing service, which compiles price and sales figures for the Island.
"That's really the indicative number," she said. "That's the physical middle. Half the properties sold above that price and half sold below. That's the number that says what the market is really doing.
"Inventory numbers have been climbing for the last five years. Sales numbers have been sporadic, with different towns showing different things," she said.
"But the median price . . . just about every quarter in every town those numbers have gone up. With the exception of 2006."
Median is a better indicator than the average price, which can be easily skewed by the sale of one or two top-end properties, given the Vineyard's relatively small housing stock.
Furthermore, top end sales appear to be holding up.
"The high end is selling, low end is selling, the slowing is most apparent in the middle," Ms. Wilson said. Her assessment was echoed by other agents and bankers.
"The top and the bottom are going," said Sharon Purdy, owner of Sandpiper Realty, and a 35-year veteran of the Island market's ups and downs.
"Take the middle as $1 million to $3 million, that's where it's softening," she said, adding:
"We have seen a definite change over 2006. But things have been going up for eight or nine years. It had to end sometime."
But Mrs. Purdy said she sees no signs of a bursting of the housing bubble, rather a slow deflation, which was on balance healthy and not comparable to the boom and bust of the late eighties and early nineties.
"That was an amazing time. You could double your money in six months or less. But many buyers were investment buyers, loyal to the investment, not the Island, and when that market turned, it was because the stock market took a turn.
"When that happened, people had huge debt service costs and they'd lost a lot of money on the stock market. That pushed them into sales; they were ready to take lower prices," she said.
"That's not the case now. There is really no outside economic factor playing into the real estate market. There's still a lot of money around. The Wall Street bonuses were great, interest rates are still very reasonable, people are not so leveraged."
This time around agents say it is not a rout but a standoff, with owners not pushed to sell and buyers putting themselves on hold, waiting to see what happens next.
As evidence of this, Mrs. Purdy cited the rental market, saying the experience at her agency was it was up about 25 per cent over the year.
"People are waiting to buy and renting instead. Until that stalemate comes to a conclusion we will remain dormant for quite some time. I don't expect anything much to happen in the next six months, unless something happens in the broader economy, like a downturn in the stock market," Mrs. Purdy said.
Her generally sanguine view of the market was shared by the president of Dukes County Bank, Chris Wells, with the caveat that the bank is keeping a close eye on the cash flows of speculative investors.
But he said so far the rate of delinquency has not increased, despite the fact that properties were taking much longer to sell.
"Things are definitely slowing," Mr. Wells said, adding: "The last solid sales quarter was probably the second quarter of 2005, and after that it steadily dropped. In the third quarter last year, 122 properties sold; third quarter this year it was 88.
"This is the first year since at least 2000 that we've seen a decline in the median price."
The median in the third quarter last year was $732,000; in the fourth quarter it dropped to $725,000. In the first quarter this year it was down to $705,000; the second quarter it climbed to $761,000 and in the third quarter it dipped to $693,000.
"The median number of days a property is on the market was 246 as of quarter three this year. That's almost double what it was in the third quarter of 2000. In the third quarter of 2005 it was 184 days," Mr. Wells said. He continued:
"It's a classic standoff. The sellers want their price and the buyers want their price and the two have not come close yet.
"But I think this correction is different in that leverage is less and there's a lot less speculation in the market than in the last significant downturn, in 1987 to 1991.
"Jobs data are good, wages are up, interest rates are stabilizing. So perhaps this slowdown will not be long. But the trend is still down."
Ms. Wilson said if the downturn reflected anything longer term, it was probably the growing wealth disparity between seasonal Islanders and year-round residents - a fact emphasized by the fact that top end properties still are selling well.
"It's not that pricing is so high so much as it is that it's high relative to the incomes of the people who are trying to buy the housing," she said.
"If you go to the suburbs of Boston, you can't find a house for what you can on the Vineyard. The difference is people here don't make the income to support those housing costs. They're not making $150,000 a year."
Mrs. Purdy agreed: "The simple fact is our values got very high - in many cases unaffordable for the people who live and work here," she said.
"The affordability factor is very difficult here for many of our year-rounders, which is why we can't attract year-rounders as we did once."