The Asbury Park Press has this update from New Jersey. "Once red hot, the market for new homes in New Jersey has begun to cool. 'The frenzy in the real estate market that we have experienced in the last three or four years is no longer in existence,' said Tom Critelli, president of Danitom Development, which has offices in Holmdel and Paramus. 'We are seeing good traffic, but not necessarily anyone overreacting to having to buy now (and) worrying about the price going up later.'"

"From 2000 to 2005, housing prices statewide were up 86 percent, O'Keefe said. But household income only rose about 15 percent, O'Keefe said. Higher interest rates worsened the situation. 'Simply put, buyers can't afford what's on the market,' O'Keefe said."

"Meanwhile, buyers are uncertain whether prices will decline and fear purchasing at the top of the market, said economist James W. Hughes, at Rutgers University. 'The golden years are certainly over,' Hughes said."

"So, O'Keefe said, home builders are reacting by: Not starting new construction until they have a firm commitment for a sale. Not increasing prices. 'The builders have become price conscious as the customers have become price conscious,' O'Keefe said."

"K. Hovnanian Homes, the largest home builder in New Jersey, has not raised its prices for the past six months, said Barry T. McCarron, a division president. K. Hovnanian is making sure its own homes are priced right. It may include some discounting of upgrades or options on certain homes, McCarron said. 'We are doing it a little more frequently than we have in recent years,' he said."

"East Brunswick-based Kara Homes, which has built several developments in Monmouth and Ocean counties, has also been adjusting to the market, owner Zudi Karagjozi said. The company started to see a slowdown in sales in October and November, he said. It had to cut costs, including laying off 20 to 25 percent of its work force over the past six months, he said."

"The company also has given incentives to buyers, to help make a sale, he said. Kara Homes also has reduced the price of some of its homes, he added."