At the north end of the coast, years of double-digit appreciation and booms in speculation and in giant, multimillion-dollar rental houses have ended. In April and May, the number of existing homes sold on the Outer Banks plummeted by more than half compared with the same months last year, according to data kept by the N.C. Association of Realtors.

On the southernmost stretch of coast, sales in Brunswick County have dropped about the same amount. In Carteret County on the central coast, the 15 percent fall in May and the 34 percent drop in April look cheerful by comparison. But according to locally compiled statistics, sales on Emerald Isle are down more than 60 percent.

"It was a seller's market for ... four or five years, but it's in transition now to a buyer's market," said Mark Petty, a broker with Village Realty in Nags Head.

Marcia Parrott, a broker in the same office, has seen downturns before. But, like the thousands of others who make their living from Outer Banks real estate, she can't help but wonder what's happening.

"Are we in a correction?" she said. "Are we -- I hesitate to use the word 'collapse' -- totally falling apart? Or are we having a soft landing, which is what I heard someone say the other day."

Real estate on North Carolina's inland coast -- the sounds, rivers and estuaries -- is exploding. But Parrott's best guess is that the falloff in Outer Banks property is a correction. She said it was overdue, given the number of speculative houses that builders and developers put on the market, and the number of investors who jumped for quick profits after years of 15 to 20 percent annual increases in home values in some parts of the Outer Banks.

"Our prices went up too fast and too high," she said. "We needed this."

Their company had begun advising some clients not to sell without a pressing reason but to wait for a better market.

Buyers wise up

Prospective buyers have caught on to the downturn and are routinely offering 10 to 15 percent below asking price, even though they know the seller has already dropped his price, sometimes more than once. In one recent case, Petty said, a potential buyer even offered less than a previous offer, apparently betting that the first potential buyer would walk away.

Many sellers have resisted lower prices, but Petty thinks prices will fall to what they were a couple of years ago before they start up again.

Homes in the $500,000-and-under range are still selling, he said, but there's a glut of oceanfront homes. In some cases, speculators who had hoped to "flip" a property -- sell it for a quick profit -- have been left with one worth less than they paid.

Bernard Helm, president of Market Opportunity Research Enterprises, a Rocky Mount firm that tracks residential trends, said that the hot market in recent years was due not just to demand but to the low cost of borrowing, with interest rates low and lenders eager. Interest rates have risen in recent months.

Timothy D. Kent, executive vice president of the N.C. Association of Realtors, agreed that rising interest rates are dampening "sales exuberance" along parts of the coast. Contributing causes vary, though, he said.

Soft markets in the places where many Outer Banks buyers are from -- such as northern Virginia and the Northeast -- are partly to blame. "They may be more aware of changes in real estate conditions than we are in North Carolina," Kent said. "They may be feeling the pinch in their own areas that we aren't here, where the market is generally strong."

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