The Orlando Sentinel reports from Florida. "The moderately upscale MetroWest residential development is a microcosm of the Central Florida market in many ways. But the real-estate glut and slump are more severe there, according to local Realtors. 'The condo and town-house market is very, very quiet,' said veteran Realtor Tony Marino in Orlando. 'A lot of the listings and prices are back to 2004 levels, but [there are] not a lot of takers. They're stacking up like cordwood.'"

"More than 500 homes and condos are listed in the MetroWest area in the Realtor's MLS -- within a 1-square-mile area. 'That's a lot,' said broker Jon Shehan."

The Herald Tribune. "In a national monthly survey of real estate agents, Bank of America Securities summed up November as 'another quiet month with few buyers swayed by lower prices.'"

"Sarasota, the 45th largest market in the country, was included in the real estate survey released this month. Bank of America found that traffic 'well below'" agents' expectations."

"'Buyer traffic deteriorated in November,' the survey concluded. The 'traffic index fell to 19.6 from 23.5 in October, well below agents' expectations. A reading of 50 would suggest buyer traffic in line with agents' expectations."

"Sarasota's price index fell to 9.1 in November from 11.8 in October, pointing to sequentially lower home prices. Again, readings below 50 point to lower prices during the past 30 days."

"Eighty-two percent of agents said prices were lower and 18 percent said they were unchanged."

"Rod Underdahl of Horizon Realty agrees that prices have gone down. 'They have dropped quite a bit,' he said. 'In several subdivisions where homes were selling for about $500,000 not so long ago they are now being offered at $350,000 to $375,000, which makes me think we must be nearing the bottom since there comes a point where sellers can't afford to take offers below what they owe on the home.'"

"Lynn Robbins, director of business development for Coldwell Banker Residential Real Estate, also pointed out that home sellers at year end face stiff competition from new home builders that often unload excess inventory at fire sale prices. 'You see some sweetheart deals in developer inventory at year end,' she said."

"Realtor Linda Higgins tends to disagree with the survey. 'The bottom is here because so many customers would rather take their homes off the market than go lower,' she said."

"Nationally, agents noted price declines in every market that was surveyed, Bank of America reported. 'What was interesting is that few agents noted any positive buyer response to the lower prices, primarily as buyers remained concerned about buying before the bottom,' the survey said."

"'Agents noted that the increased spreads on jumbo mortgages as a result of tighter credit availability is hurting sales at the high end and more conservative appraisals are dampening overall volume,' the report said."

The Wall Street Journal. "Chris Delzio, a securities broker in New York, moved to Palm Bay, Fla., in 2003 and bought two town houses, each for $75,000. Within two years, he had sold both for double what he paid and plowed the profits into land to build five new homes. Compared to staring at a securities-trading screen, he says, 'It was fun, driving around, looking at the properties. You're out, talking, negotiating.'"

"Then, buyers stopped coming. Mr. Delzio listed one home, on which he spent $203,000, at $210,000. He then cut the price repeatedly, finally to $175,000. He now rents it for $800 morents it for $800 month, well short of the $1,400 monthly carrying cost."

The Christian Science Monitor. "Leigh Strand...the founder of Grill it Yourself Inc., had a booming business a year ago helping Florida homeowners create outdoor kitchens and a barbecue lifestyle to match. Now, her shop is as quiet as the hundreds of nearby homes that stand empty with 'for sale' signs planted out front."

"There are customers – including some who have laid out big plans – but hardly any are moving ahead with a major purchase. Recently, 'I had the choice between paying my mortgage or paying my employees,' Mrs. Strand says. 'I paid my employees.... I'm not giving up. I'm not going down.'"

"Welcome to Cape Coral, where residents are banking on a combination of grit and the lure of local amenities to see them through a housing recession that's as bad as any in the US. During four boom years,...much of the momentum came from speculators, who banked on a continued surge. Now, that trend has reversed."

"For homeowners, falling land values can affect everyday spending. Brent Legere, a pizza house worker in Cape Coral, bought a $207,000 home last year. Currently, he figures it's worth much less than that, and a year from now he will see his adjustable mortgage payment reset." "'I was going to do some upgrades,' he says, as he waits for customers. But now he's hoarding all the cash he can. 'I might need it.'"

"Those who bought properties as investments are feeling the pinch as well. Scott St. Blanc, who came to Fort Myers five years ago, gets income as landlord for three homes he owns here. In the current market, he's had to lower the fees for some tenants. 'To keep them, I had to drop the rent to $1,200 from $1,400,' he says."

"In construction, the next year may see less than 1,000 new homes built, down from 8,500 a couple of years ago. 'The economic engine for a long time was building new homes,' says Mike Quaintance, president of the local Chamber of Commerce. "That's a significant revenue stream that is gone."

"It's a real estate storm that made landfall like a slow-moving Gulf Coast hurricane here in south Florida and in other once-booming housing markets last year. In recent months it has gathered momentum and spread, shaping up to become perhaps the worst home-price slump since the 1920s and '30s."

"'We are in the aftermath of the biggest housing boom in history,' says Robert Shiller, a Yale University economist. 'We are in a period of exceptional uncertainty about the value of our homes.'"

"It is that issue – how far home prices rose – that sets this bust apart from other US housing downturns in the past century. This is more than a typical cycle where the pace of home building plummets. And this goes well beyond a crisis of subprime borrowers."

"In Florida, many of the buyers who got burned were investors who expected to buy and then quickly resell homes in a rising market. 'There's a lot of people that stuck their neck out,' says Richard Ray, a longtime resident who works at a marina in Cape Coral, with a rate of foreclosures in process – 5.4 percent of all mortgages – that leads the nation."

"Many people who never intended to ride a real estate wave are also at risk. 'You see all these empty houses now,' says Ann Bala, a Cape Coral resident who is losing her home. An injury sidelined her from work, and then she was squeezed between a rising mortgage rate and a falling home value. 'It's not even worth $100,000 anymore,' she says."

"'My phone has been ringing off the hook,' says Steve Jones, who counsels people at risk of foreclosure in the area."

From Barrons. "When real estate markets sour, owners of luxury homes and condos sometimes cling to a comforting theory, at least in the slump's early stages: Their properties are pretty much immune to a downturn. Alas, reality and theory don't always coincide."

"Consider Sarasota, Fla., a small city in which property values are king and which was one of the hottest of the hot spots in the U.S. real-estate bubble."

"Home prices jumped 150% from 2000 through 2005, according to the National Association of Realtors. But now prices are in something approaching a free-fall. The current readings say they're down 19% since the end of 2005 and 10% in the past year. Lots of residents who had considered selling their homes during the craziest of the craziness, but didn't, are wringing their hands."

"Perhaps the market's hottest sector during the boom was luxury properties. 'We were always under priced, compared to Naples and Palm Beach,' says Michael Saunders, a woman considered one of the doyennes of Southwest Florida real-estate brokers. 'Then, in '04 and '05, we outdid ourselves catching up.'"

"But where are all those buyers now? In an attempt to flush them out, SKY Sotheby's, a luxury real-estate firm associated with the famous art- auction house, decided to capitalize on its heritage. It tried a 'starter auction' in May, with mixed results."

"The auction is already the stuff of legend. The place buzzed with anticipation, and there was plenty of food...and a live band, although the selection of 'There's Gonna Be a Heartache Tonight' might have been a little unwise."

"Of the 79 properties on the sales list, 18 were offered 'absolute,' meaning that the seller hadn't set a reserve price and supposedly would accept any bid. But the median sales price these attracted was less than half of the original asking price. Ouch."

"Thirty-seven properties were sold 'subject to owner confirmation,' meaning they didn't receive bids above their reserve price, and thus maybe sold or maybe didn't, depending on whether the seller would accept the low-ball bid."

"What didn't do well was the mundane. It was a bad day for your typical $2 million Spanish Med. The auctioneers seemed to put the good stuff first, and when the run-of-the-mill came on, well, the crowd was getting tired. The woman sitting next to me was keeping tally -- as were many others -- and after a while, her DNS (did not sell) list got longer and longer."

"One person who analyzed the reported sales concluded that, for the properties sold 'absolute,' the median sales prices was just 45% of the original asking price, and that 35 properties didn't even get an acceptable opening bid and so remained unsold at the auction."

"And, of course, some competing real-estate agents, as steeped in schadenfreude as they are in mortgage rates, quickly came up with a catty saying: If you want to sell your home, call a broker; if you want to give it away, call SKY Sotheby's."

"Drawing-broad conclusions about what one auction in one market says about the U.S. luxury-home market is dangerous. But the Sarasota sale certainly said something about the once-torrid Florida luxury-home market...and similar markets around the country. And what it said wasn't reassuring for those with high-priced property to sell."