Suffolk County has been hit harder than any other county in the state and “has seen a rapid depletion in the strength of its tax base,” according to a statement released by County Legislator Wayne Horsley of Babylon. He offered statistics showing a growing decline in county property tax revenues — $1.2 million (2.3 percent) decline in 2005; $3 million (5.9 percent) in 2006; and $18 million (35.7 percent) in 2007.

No block on Shelter Island looks like the worst of what has been written about nationally, where there are some blocks on which every second or third house has gone into foreclosure. There is only one house in foreclosure on Shelter Island as evidenced by the Reporter's recent legal notices. A search of several websites that list foreclosures showed dozens in Suffolk County but none on Shelter Island.

While the Island has avoided the worst of the national real estate problems, its real estate market is experiencing a general slowdown. In 2006 there were 70 real estate transfers, according to the Town Assessors Office. Fifty-seven were sold for more than their assessed value; only eight for less. In 2007 there were 49 transfers, of which 38 were for more than the property's assessed value. As of the end of September, there had been 44 transfers, about the same as 2007. However, only 23 of those have sold for the same as or more than their assessed values.

The margin between the average sale price for those properties and their average assessment values has also decreased significantly since 2006. Then, the average sale price was $1,576,080 compared to an average assessment of $1,213,323, a difference of $361,757. In 2008, that difference is $69,648, still a net positive, but the lowest margin since 2001 had been $178,629.

“The assessment numbers are a reflection of a sales comparison analysis for the three years prior to July 1 of any given assessment year,” town Assessor Al Hammond wrote in an email. “In a runaway market, sales which occurred six months to a year after they were assessed have a sales price considerably higher than their assessed value. These sales create additional statistics and each year we resume the cycle in an effort to catch up to the upward market trend. Our assessments have consistently been below market value, reflecting the one-year lag.”

Mr. Hammond added that the narrowing margins represent “an indication that the market is slowing toward normalcy.”

According to Building Inspector Billy Banks, most of the last decade has been anything but normal on Shelter Island. He called particular attention to the number of pool permit applications the department received. There were a combined 96 between 1999 and 2001. They peaked in 2002, at 45, with nearly as many, 42, in 2006. The reason? According to Mr. Banks, real estate agents refused to show properties that did not have swimming pools. “People were convinced that's what the market wanted,” he said.

Further, he said, people were building more than they could afford. The Building Department received more than 100 applications for additions and renovations for every year between 1997 and 2001. As for new structures, there were more than 30 every year between 1997 and 2002 and 30 applications again in 2005. And the sizes of those dwellings grew as well. Mr. Banks said that when he started work as a building inspector in 1995, the biggest new houses being built were approximately 3,500 square feet. Now, he says, that is the average size for new houses.

In 2007, there were 14 applications for new dwellings and 16 for additions or renovations. Construction is slowing down, Mr. Banks said, “but it's all right for now.”

Real estate transactions have also slowed, said Janalyn Travis-Messer of Griffing & Collins Real Estate, adding, “The economy is in a very tough place.”

Mr. Banks said he has received several calls from title companies requesting cancellation of searches for certificates of compliance and occupancy. “They don't want to pay for deals that won't go through,” he said.

While that paints a grim forecast, Ms. Travis-Messer said Griffing & Collins “has several closings scheduled for this month. Rentals were mostly one to two week stays ... Past tenants returned and our website attracted many new customers.”

She added that her company is confident “buyers are not going to be stretched beyond their capabilities. There are real estate opportunities for buyers due to a large inventory and reduced prices. History has shown real estate always rebounds.”

Until that happens, as Ms. Travis-Messer hopes it will, Mr. Banks said, “It's about time everyone got back to basics.”

But, Mr. Banks said, what would be considered basic now would not have been thought of that way a decade ago.

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