CNN Money reports from Florida. "Jonas Lee's doing the most critical part of his job: scoping out homes for his investment firm, Redbrick Partners, to add to its growing stable of rental properties. Lee is doing more drive-bys than ever these days. A handful of housing markets, such as southern Florida and certain neighborhoods of Washington, D.C., are wildly overbuilt."

"Prices are dropping. And developers who raced to build new houses and condos during the boom are likely to soon be begging for buyers. 'There's going to be blood in the water,' Lee says. 'A big pileup."

"No region has Lee more bullish than southern Florida where, as Redbrick co-founder Tom Skinner puts it, the near-term fundamentals are 'out of whack.' Lee predicts that buying opportunities will begin in early 2007. 'The next couple of years will be ugly,' Lee says, optimistically."

"Lee says developers are offering condos in the region at 20 percent below appraisal value. Redbrick expects the discount to grow to 40 percent because developers lose money every day they own a property."

From Bloomberg. "Buyers canceled contracts to purchase homes at a record pace in the second half of 2006, swelling builders' inventories. That means buyers like David and Wendy Butler of Orlando, Florida, are able to purchase an already-completed new home at a discount."

"The Butlers are purchasing a four-bedroom, 3,700-square-foot house in Orlando built by Ashton Woods USA LLC for $545,000. 'People were saying the average homes in this neighborhood would be $1 million-plus, but there's so many homes on the market the prices have been tumbling,' said David Butler."

"The high volume of completed homes for sale may result in a later start to the so-called spring-selling season' because buyers have the option to choose a completed home rather than order one to be built. And, the completed new homes may offer price bargains, said Gary Balanoff, a broker in Oviedo, Florida, 18 miles southeast of Orlando."

"'We find that people are canceling contracts because they found a better deal,' Balanoff said. 'People figure they can get the same house for $30,000 less.'"

The News Press. "Expect Lee County's housing prices to stay soft for another 12 to 15 months before the market turns around, consultant Michael Timmerman told the Real Estate Investment Society."

"'We will have more sales in 2007, I will guarantee you that,' said Timmerman, Naples-based managing director for Florida at Hanley Wood, a national company that collects and analyzes data for home builders. 'But it will come at the sacrifice of price.'"

"A lot of investors who own houses and are trying to get rid of them will likely decide to cut prices deeply after the winter season if they still haven't been able to sell, he said. 'They can't afford to hold it.'"

"Prices have fallen steeply: according to the Florida Association of Realtors, the median price of an existing home sale was $258,600, down 12 percent from a year earlier."

"Economist Hank Fishkind and Timmerman said the market will be toughest for the mid-range homes that were heavily speculated by investors as prices rose sharply in 2004 and 2005. 'It's the standard homes in Cape Coral and Fort Myers that have seen rapid escalation that are the most likely,' Fishkind said. 'I think that is the place where we'll see the most falloff in price.'"

"Timmerman said the sales are weak in the middle — which makes up most of the unsold inventory of 14,000 houses."

From the Ledger. "Two years ago, Polk's County's real estate market was a seller's dream. Then along came 2006. 'I think what happened was that we underestimated the number of speculators in the market,' said Dean Saunders,broker in Lakeland."

"Speculators, buyers who have no intention of living in a home or keeping a property for a substantial amount of time, purchased property throughout the state, causing a frenzy in both commercial and residential real estate circles."

"It meant skyrocketing prices and overbuilding of properties. For the market to make a full rebound, home inventories need to be cleared out, experts say. 'It is all going to be dependant on the absorption rate,' said Grant Thrall, a professor of geography at University of Florida, referring to the existing home inventories in Polk. 'There's not a lot of new construction going on.'"