On the flip side, some of the larger apartment developers have their acquisition people back in Florida because land prices are coming down. It's our belief that once the condo projects that are currently under way get completed, we're probably not going to see nearly as many of them for years to come.

REFla: Will the demand be there to absorb these extra units?

McCabe: Prices have gotten out of hand and in some places the cost of renting is less than half of the cost to own. With the pressure of foreclosures over the next few years due to relaxed lending practices, a lot of people who became homeowners in the past couple of years are going to be returning to the renter pool. That's why rental demand will be there. Renting is a smart and cost-effective decision, at least until for-sale prices come down. Now, once they come down far enough to where it makes sense to buy these units--and I think that's going to happen in the next 12 to 18 months--the condo prices are going to be consistently lower than what they were previously.

REFla: Will job losses in the residential sector have much of an impact, or will population growth be enough to counter those cutbacks and absorb units?

McCabe: The report of a thousand people a day moving to Florida is a myth. I'm still trying to figure out who created that, but it's the biggest joke because it just simply isn't happening. Right now, instead of companies and people entering Florida, we're seeing them leave the state.

It's going to be a tough time for the next three years. You'll hear people say there'll be a recovery by the end of this year or next. Well, that's a bunch of baloney, and anybody who buys into that thinking is fooling himself. It took us five years to get to this point. We've created a much larger inventory than we've historically been able to absorb. It's going to take years to absorb it. It's simple mathematics. I think it's going to be 2010 before we see enough of a change in prices, taxes and insurance for people to start buying again.

REFla: You've warned that the condo sector could face severe litigation issues. How so?

McCabe: The love fest is over. Prices are coming down and people are losing money. There's going to be a lot of finger-pointing, and sue-happy America is going to create a tremendous amount of litigation. We're already seeing some attorneys here advertising to condominium preconstruction contract holders that they can help them get out of their agreements. I think we're going to see realtors, lenders, title companies and developers getting sued. We're going to see developers suing speculators to force them to close on their units. Smart developers are placing reserves to deal with what they should see as the future cost of litigation due to material defects and buyers trying to walk away from their contracts. There are actually seminars for attorneys right now about how to go after predatory lenders and how to sue developers. It's becoming a large cottage business.

REFla: What do you anticipate for the multifamily sector over the next few years?

McCabe: A lot of people may find this hard to believe, but in spite of all this I am still the biggest believer in the long-term prospects for Florida real estate. We've had excessive, unhealthy and unrestrained amounts of development, as well as lending, buying and borrowing. We're just going to have to deal with it. Once we do--as it happened in the '70s, the late '80s and early '90s--we will see prices appreciate, because the basic fundamentals are there for the long term.