South Florida was "Ground Zero" for the Housing Real Estate Collapse

Mike Larson, an analyst with Weiss Research, a Jupiter-based provider of global investment information wastes not time and gets right to the point:
"South Florida was definitely ground zero for the housing bust. We had a lot of rampant speculation and fly-by-night mortgage lenders and when they went away, the market collapsed."

The result: plummeting home prices that have hammered Broward and Palm Beach counties since 2005, when the housing bubble peaked.

According to MDA DataQuick, a San Diego research firm, single-family homes in the Pompano Beach and Lighthouse Point (zip code 33064) endured the greatest percentage decline in Broward over the past five years.  The median price of $75,000 in June was down 68.6% from June 2005. The 33064 ZIP code includes Cresthaven and Pompano Highlands, low-income subdivisions hit hard by foreclosures in recent years.

In Palm Beach County, the ZIP code 33407 took the biggest hit. The median price for homes in the ZIP code covering West Palm Beach and Riviera Beach plummeted 77.4% to $43,000.

However some upscale areas avoided price declines. The ZIP code for west of Boca Raton, 33496, saw its median sales price soar 39.5% to $610,500. While parts of Jupiter, Palm Beach Gardens, West Palm Beach and west of Delray Beach had smaller median price increases.

Broker Douglas Rill said Jupiter biotech giants Scripps Florida and the Max Planck Society have helped sustain home prices in the northern part of the county. "You have a bunch of highly paid people who don't want to be far from work," Rill said.

In the condominium market, only Palm Beach, South Palm Beach and parts of Fort Lauderdale avoided median price cuts compared with five years ago.

During the boom, speculators fueled the run-up in home values before getting pummeled in the downturn. Now a new wave of investors is positioned to help the market recover. They're buying foreclosures and short sales, fixing them up and reselling them for a profit.

Although slowly, bidding wars could help boost prices. However, with even more foreclosures expected to flood the resale market in the coming months, analysts predict prices will keep falling. The market might not hit bottom until next year, and even then, the prices will not just shoot up again like they did in the past. Those days are over.