According to local Key West realtor Bascom Grooms, 1070 residential properties are now on the market in Key West - a huge number in historic terms.
Speculators, many of which are responsible for the ridiculous housing bubble, are now sweating and slashing prices hoping to avoid financial ruin.
On top of the local housing "crash" is the bleak national picture. Massive losses are working their way through the mortgage market - especially subprime lenders (there is a real and growing fear that the subprime meltdown is spreading to higher quality borrowers). In response, banks and lenders are cutting back on subprime and no document loans. This will remove many buyers from the real estate market - many who would have never been able to buy property if not for the lax and irresponsible easy lending practices of the mortgage industry. As a reminder, more sellers than buyers equals lower prices.
Further national problems for the real estate industry are evident in new home sales and the companies in that business. According to DR Horton, one of many suffering builders, the upcoming year will "suck". Their sales, cancellations and defaults have spiked higher.
With plenty more units under construction in Key West and due to enter the market, the bad times for the Key West real estate market are far from over.
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