The New York Times reports on Florida. "In 2002, when the St. Joe Company, one of Florida’s largest real estate developers, began selling parcels in a new neighborhood here, it was inundated by potential buyers. Four years later, you can hear a pin drop at the gated community of WaterSound Beach. Most of the lots sit empty, and even Thanksgiving weekend brought only a handful of visitors."

"When it sold the lots, St. Joe had a requirement that buyers break ground on their houses within three years. Homeowners who did not meet the 'build-out deadline' had two options: to begin paying a penalty, as much as $2,500 a month, or to sell the land back to St. Joe at the original price."

"As it turns out, many of the landowners were speculators who had no intention of building. 'People got caught day-trading lots,' said Marc Levy, who owns a house near WaterColor. Those who did not want to sell their lots at a loss, but had no plans to build, were stuck.The market was so bad that 'some of them would have been happy to sell back to St. Joe at the original price,' Mr. Belote observed."

"But St. Joe 'wasn’t interested in buying back people’s lots,' said company VP Jerry Ray. So last May, St. Joe issued a statement that caught many of the owners by surprise: They would have an extra two years in which to begin building their houses."

"Some people who have already built houses in the St. Joe communities are unhappy about the extension, claiming that the company changed the rules in the middle of the game. Pat Spafford bought a lot in WaterSound Beach at the end of 2002, began building within the three-year window and moved in with his family late last month."

"But the lot alongside his is empty. So instead of living in a finished community, he said, he could end up living next to a construction site. Spafford said he was 'not too happy' about the extension. 'The speculators,' he said, 'put pressure on St. Joe.'"

The News Journal. "Will 2007 be the year of a soft landing for the Pensacola Bay Area's turbulent economy? 'What we are seeing at this time is a very significant downturn in the real estate market,' said Al Muller, president and co-owner of Metro Market Trends."

"'The downturn is affecting all segments,' he continued. 'New homes, resales, commercial and condos are being affected differently. We're seeing a lot less transaction taking place, and, for the first time, we're seeing some small declines in median prices.'"

"'Those sectors will fall but they won't fall back to where they were before they started the run-up,' (analyst) Rick Harper said. 'We're going to be left with increased amounts of real estate wealth, compared to three years, ago.'"

"'I've never seen as much of a change in the business economy in my time of living as I've seen in this year,' said Sandy Sansing, a new- and used-car dealer in Pensacola. 'New-car sales are off 16 percent in Escambia-Santa Rosa counties, used-car sales are off 19 percent from 2005. October was far worse, and November was worse than October '06.'"

"Local bank have also experienced a sharp drop in the number of home-equity loans, and that is largely a result of falling home values,' said Christina Doss, VP for SunTrust Bank in Pensacola. Harper notes that home-equity loans, based on rapidly rising real estate values, was one of the key economic factors fueling the growing national economy."

"But now that housing prices are falling, and insurance and property taxes rising, Harper and Doss agree that consumers are much more cautious about taking on debt based on the value of their homes."

The Bradenton Herald. "While at first, skyrocketing price tags on homes priced many might-be home buyers out of the market, condo conversions also took a chunk out of the number of units available for rent."

"Now, many investors who got caught with homes they can't sell have turned to renting their properties. 'We're flooded with homes that have been taken out of the sales pool,' said Sharone Martinelli, Wagner Realty's relocation director."

"Much like those who listed their homes as the real estate market settled, some people who have turned to leasing their properties instead set unrealistic expectations in 2006. 'Anything priced over $1,500 a month is very, very hard to rent,' said Ron Cornette, Wagner Realty's marketing director."

"Historically, investors have been able to get about 1 percent of the home's value as a monthly rent. Now, Cornette said, the homeowners are lucky to get a half percent. For instance, a $300,000 property that might have fetched $3,000 a month in rent is now lucky to get $1,500 a month."

"'Owners are better off taking $1,500 a month this year than not seeing any income from their property whatsoever,' Cornette said."

"A young couple could buy something for $2,000 a month and although it might not be the same size as what they could rent for the same price, they would be investing in their future, Cornette said. That didn't stop the number of rentals from soaring at Wagner and throughout the county as many waited for prices to fall to levels within their price range."

"The early arrival of cold weather in the North has brought some of the seasonal visitors back a little early. While some purchased second homes during the housing boom, many are content to rent. 'We're getting our seasonals rented, while our annual rentals are slow unless they are priced below $1,500,' Martinelli said."