Florida worst hit in the US

Florida, with Miami and Orlando in particular, is America's worst performing real estate market, according to the influential Forbes Group.

The popular holiday state tops the latest Forbes List of the most sedentary housing markets. Also included are Denver, Chicago, Baltimore and San Diego. While Las Vegas and Sacramento, California, are among the more active markets. Price growth and sales rates were examined to compile the list.

'The markets that are really in trouble are those in Florida which have experienced overbuilding and lending problems and now have flat sales,' the report says.

In Orlando homes are selling at an excruciatingly slow rate of 0.6% per month. It's the same story in Miami, where homes have been selling at an underwhelming rate of 0.2% per month.

According to the Florida Association of Realtors, the outlook is grim. Figures show the median sale price has dropped 23% in the Greater Fort Lauderdale area.

Hundreds of British investors who pumped their money into Florida's soaring housing market have been caught out in its spectacular collapse. Many bought apartments off-plan, hoping to sell them on at a huge profit as soon as they were built.

'Out of staters and foreigners, especially the British, flocked here and pushed the market to the point where about 70 per cent of all sales were to investors who never intended to live in what they were buying,' said Florida Property Consultant Jack McCabe.

However, they have been left with property they can't sell - even for less than the original price - because of rising interest rates and a glut of condominiums for sale.

Florida house prices have been plunging for 18 months, but research shows investors in high-rise condos have been hurt the most.

Miami lawyer James Ryan said he had 40 clients, including British investors, trying to get out of contracts even if it meant losing substantial deposits. One client abandoned a £170,000 deposit rather than complete on a £800,000 condominium now worth only £600,000.

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