Spain=Florida. The amazing similarities of these two housing-bust markets

Posted by: Peter Coy on May 29, 2009

spain.jpg
Spain and Florida are both in the middle of terrible housing busts. Florida’s bust is one of the worst in North America and Spain’s is one of the worst in Europe. Hmmmm. What is the common thread that could explain this coincidence? Let’s see:

On a peninsula? Check
Hot and sunny? Check
Spanish widely spoken? Check
Tourist destination? Check
Second-home spot for pale Northerners? Check

Nope. None of those similarities seems to explain the problem. Wait! Here’s one more:

Massive residential overbuilding? Check

Yup. That’s probably it. Massive residential overbuilding The question now is, who recovers first? The Spaniards or the Floridians?
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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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