In New Terrain

The evaporating pool of buyers has left many with financial obligations and a glut of homes they can't sell-either already built or in the midst of development. As a result, developers, builders, and even the lenders left holding the bag have been exploring alternate avenues to keep their financial footing.

Veteran industry watcher Ross McIntosh notes that this isn't the first time the Southwest Florida real estate market has slumped, but it could be the longest slump in recent memory.

"There have been times when projects were abandoned, and times when some big names in the business disappeared," he states. "Right now we're seeing some builders who've suspended work at subdivisions that are not performing up to expectations, or are selling them. Earlier in the decline, there were those who tried to reduce their exposure by encouraging other builders to take over some of their lots."

Ernest Sittenfeld, broker at iXora Realty, Naples, observes that developers are not only offering homes at bargain prices, but some are hawking chunks of their territory as well.

"Since commercial property is in a better state than some residential real estate, there are developers selling the sectors of their projects that front the residential areas for commercial development," he says. "Others are seeking buyers for pieces of their residential parcels."

Back in the mid-1980s, the contractor now known as Boran Craig Barber Engel was completing a 162-unit condominium project.

But sales were slow and the company wasn't getting paid, so a joint venture was forged between his company and the lender, Don Barber, now a principal at the firm.

It wasn't a role the company relished. "We never did it before," Barber says, "and we never did it again."