(March 2008)

I had to see it for myself.

The bursting housing bubble in southwest Florida was, at once, being more dramatically played out than in most other regions of the country while, still retaining the allure of happening in one of the most popular vacation destination in the country.

Investors, for several years, had been flipping properties like their was no tomorrow. It was an amazingly lucrative strategy to parlay purchase upon sale and sale followed by an even more expensive purchase, with no end to this animal spirited game of musical condos.

Then tomorrow and the end of what had been came, and everything froze in place. A major statewide industry that was built on never ending turnover and expansive population growth stopped dead in it’s tracks. The influx of migrants from other states slowed and the exodus of disillusioned long term residents speeded up. Florida was coming to be seen as a property owners nightmare.

Ironic reports of monumental property tax increases from years of home price appreciation, being levied and collected at the very moment when those prices had just begun a stunning descent with no forseeable end in sight and that was coupled, for many residents, with a doubling or even a trippling of their home owners insurance premiums resulting from insurance companies having become intolerant of virtually any risk of hurricane related losses.

Countless homeowners want out but for most there is “No Exit”. Certainly not at the inflated prices of the last six years. Prices have only begun, what will be seen in retrospect as, a dizzying downward spiral that is likely to overshoot and penetrate fair market value.

The parade of the “Vultures” both domestic and international is underway. They are most noticeable at auctions or foreclosures anyplace where desperate homeowners or banking institutions are seeking to unload untold thousands of depreciated properties.

Vultures prefer to buy at absolute bottoms of course and the consensus is that we are not yet there. Some property owners realize the trajectory and that conditions will only get worse. They come to the painfull realization that they have to underprice their piece of real estate if they are to stand any chance of ending their nightmare and do so.

(to be continued)
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