A pair of reports on housing from New Jersey. "While home prices are still edging up, they are not rising at the furious double-digit clip of the past three years. And that is starting to put a damper on the real estate market for investors, some would call them speculators, who have had a hand in driving up prices in recent years."

"Last year, real estate investors accounted for 15 to 20 percent of residential sales in Monmouth and Ocean counties, said (appraiser) Jeffrey Otteau. This year, he estimates it will be less, about 5 percent."

"In the near term, Otteau said, investors will be rushing to the sidelines, hurting the market even more. 'Investors will be looking to liquidate and that is going to bring additional supply onto the market and will further weaken the real estate market,' he said."

"Typically, they hope that prices will rise quickly and until they can sell, they expect to cover their carrying costs with rents. Neither is expected to happen. 'Many of the investors who would want to liquidate will be unable to sell their homes in the current market and that will push them into the rental market.' That will weaken the rental market for single-family homes, he said."

"Wall resident Terrance Hege, an investor and developer, said he is 'not necessarily a buyer at this point.' Hegel believes that the market peaked in the early summer of 2005. Now he is waiting for median home prices to decline. 'I wouldn't be surprised if they fell from their peaks,' he said."

"Last year, Hegel sold two new homes and two renovated houses. 'I sold them all at a pretty aggressive price because I didn't want to be sitting with them,' he said. 'I don't think prices are moving up, so (that) I am missing the boat on something,' Hegel said. 'With the inventory that is out there right now, you can be patient.'"

"Otteau said experienced investors will continue to buy homes that are owned by people who are in financial distress, such as someone who might have had an increase in their adjustable rate mortgage and can no longer afford the payments. But these investors will no longer be willing to pay top dollar. 'To be an investor going forward, it is not for the inexperienced, it is only for the expert,' Otteau said."

An editorial. "May and June are traditionally the best months for real-estate sales, but this May and June have been 'very, very slow,' says Dan Scher of Ledgewood, who has been selling real estate for 25 years."

"It's the worst market he has seen in 10 years, for himself and other agents. The root of the problem, in his view, is that sellers are stuck in a time warp and refuse to budge from their lofty asking prices."

"What has jinxed the market? Scher says, "The inventory of houses for sale has risen dramatically, interest rates have climbed, gas prices are outrageous.' Then there's the obvious reason: House prices have climbed too high."

"His advice for buyers: It's not a bad time to buy, considering the large number of houses for sale. But look for a seller who's aware that this is the summer of 2006, not last year. It's undeniable. Things are very different. I see a lot more For Sale signs when I drive around and a lot more PRICE REDUCED! signs."

"Jeffrey Otteau says he has no hard evidence that house prices in New Jersey have declined, but the latest data aren't in. He points out that the market began slowing in April, at the start of the second quarter. That's when 'the bottom fell out of the market.' The number of potential buyers declined sharply."

"'Buyers are taking a wait-and-see attitude,' he says, and he gave three reasons: 'People have been so drilled by the press that there's a bubble that they have started to believe it.' He cites a poll that found that 71 percent of the public believes that a real-estate collapse will begin within a year."

"Rising mortgage rates. House prices that have outpaced salary increases. During the past five years, there has been a 16 percent increase in salaries in New Jersey, and an 88 percent increase in home prices, he reports."

"Gumbinger acknowledges that it's a different market. 'We've passed the peak, we've topped out. There's more room for negotiation now. Sellers know that buyers are not lined up 10 deep. And buyers know that while there were once three acceptable houses and 22 bidders, there are now 30 acceptable houses and very few bidders. Instead of asking for 10 percent off, they may ask for 20 percent off. Power has moved from the seller to the buyer,' he said."