Florida Market Slump: Will it Bounce Back?

The Florida market has been hit particularly hard by the current real estate slowdown. Investors, potential owners of second homes, and retirees are backing away from buying there, says David Hehman, chief executive of EscapeHomes.com, a vacation home Web site. In the Fort Myers and Cape Coral areas of Southwest Florida, for example, existing home sales plummeted 34 percent between January 2006 and January 2007, according to the Florida Association REALTORS®. WCI Communities, a builder based in Bonita Springs, Fla., saw its net income plunged from $186.2 million in 2005 to $9 million in 2006. CEO Jerry Starkey says he isn’t discouraged, though, and points out that 78 million baby boomers are reaching their peak second-home ownership and retirement years. "When America wakes up from this slump and this fear of buying homes," Starkey adds, "I think we'll see Florida return to one of the top home building markets in the country, as it has been historically."

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