NEXT month Stephen King releases his latest novel, Duma Key.

It is set in sunny Florida, home to holiday-makers and bronzed OAPs. At first glance, it seems an odd location for the horrormeister. But as King has undoubtedly noticed, there is something sinister going on down south.

Florida was one of the states that “benefited” most from America’s extraordinary housing boom. Fortunes were made as people flipped properties, selling them before they were even built. A couple of years ago, Miami estate agents were claiming up to 70% of new condos were going to speculative buyers who would never live in them. Now the whole sham has been exposed for the pyramid scheme it was.

According to a survey released by Economy.com, Florida is set to account for five of the top 10 falls in property prices in America.

Punta Gorda tops the list, with homes predicted to lose 35.3% in value by the time the market bottoms. The survey, backed by Moody’s, isn’t anticipating that will happen any time soon. Moody’s says housing figures will continue to drop through early 2009 with little improvement until 2010.

Fort Walton Beach prices are expected to fall by more than 30%, Marco Island by 29.6%, Miami Beach by 26.7%, West Palm Beach and Boca Raton by 25.5%.

Last month Lawrence Yun, chief economist of the National Association of Realtors (Nar), called Florida “ground zero for the housing market slump”.

It must have come as some surprise to Floridians who had followed Nar’s other more bullish forecasts.

Last year, according to Nar, existing-home sales would fall 3.7% and new-home sales would fall 4.8%.

Instead existing-home sales for 2006 fell 8.6% while new-home sales fell 17.8%.

Nar’s forecast for this year was again way off the mark. Existing home sales were expected to end 1% lower than the 2006 total, while new-home sales would fall by 9.4%. Nar then cut back its forecasts for nine months in a row. It now expects existing-home sales to fall 12.5% to the lowest levels since 2002.

If anyone’s listening, Nar says new-home sales will continue to suffer next year, but the worst is over for existing-home sales. I wouldn’t pay the deposit on that Florida condo just yet.

So irritating has Nar become that Yun now has his own hater blog (Lawrenceyunwatch.blogspot. com). The same people ran a blog blasting his predecessor, David Lereah.

To be fair to Yun, Lereah seems the more deserving target. Lereah is a classic booster who once advised people it was a great time to buy and to sell.

He is also the author of the 2005 classic, Are You Missing the Real Estate Boom?: The Boom will not Bust and Why Property Values will Continue to Climb through the End of the Decade – and How to Profit from Them.

King writes better titles but for Floridians, Lereah’s book no doubt makes the more horrific read.

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