The Philadelphia Inquirer has this update. "Observers of the Shore market say, as higher interest rates are beginning to dampen sales, and condo construction, mostly involving investors, adds to a growing surplus of properties. 'Whenever interest rates rise, the second-home market is the first one to take the hit,' said (mortgage broker) Fred Glick."

"'"It's the condo and lower end of the Shore market that's taking a hit,' said broker Paul Leiser. 'These are the buyers who depend on lower interest rates to balance two mortgages, and with rising interest rates, they can't do it. We've sold fewer units, but our dollar volume in the first quarter was higher than it was in the first quarter of 2005, Leiser said. It's the million-dollar-house purchases that push up the medians.'"

"In Ocean City, the scene of numerous teardowns and massive development since the mid-1990s, there were more than 1,700 listings on the Ocean City MLS. 'They're saying that Ocean City is overbuilt by two years,' broker Jerome DiPentino said. 'That may be conservative.'"

"Jay Lamont, who has studied and owned real estate in Ocean City for about 40 years, said, 'I have never seen anything even close to this debacle. Many legitimate and qualified buyers are waiting for fall, for the lender REO [real-estate-owned] listings and foreclosure sales on failed developer loans.'"

"Weekly sales reported to the Ocean City MLS are 80 percent to 90 percent lower than they were in spring 2005, with seven or eight sales a week, he said."

"What's going on? 'The short-term investors at the Shore were in the condo market primarily, and they're the ones pulling out,' said (economist) Mark Zandi. 'They don't buy multimillion-dollar homes.'"

"Oversupply also seems to be a problem elsewhere in Cape May County. (Broker) Paul Schlimme in Cherry Hill, said that between Jan. 1 and May 31 there were 189 listings on the Avalon MLS, with about nine houses selling per month. 'That means there is a 21-month supply in Avalon, and it is getting worse,' Schlimme said."

"The Wildwoods, too, were a draw for investors, who razed motels and filled empty tracts with condos. But with for-sale signs sprouting and interest apparently tailing off, that boom could be over, local market experts say."

"In Ocean City, Lamont said, 'open houses are held each weekend, sometimes as many as eight per block on Asbury Avenue, with almost no legitimate buyer traffic showing up even to use the bathrooms.'"