Florida faces an even more difficult road to recovery. The Sunshine State went into recession a full nine months ahead of the nation, and excesses in housing and commercial real estate are considerably worse than the nation as a whole.

The housing bust is clearly Florida’s largest immediate problem. Single-family housing is extremely overbuilt, particularly along Florida’s central Atlantic coast, in southwestern Florida, in central Florida, in the outlying areas around Orlando and in many other of the outlying areas around the state’s other major employment centers. Permits for new single-family homes have tumbled 90 percent from their peaks nearly four years ago and the inventory of vacant, developed lots remains excessive throughout much of the state.

The Tampa-St. Petersburg metropolitan area has been hit especially hard by this downturn. Tampa had seen some of the strongest growth during the expansion, and home building and home prices rose much more than the underlying demographics support. The problem was most acute to the north of Tampa, in Pasco and Citrus counties. Both areas now boast significant supplies of vacant developed lots and have seen home prices and lot values collapse in recent years.

Tampa’s hard landing is somewhat surprising given the diversity of the local economy. The housing boom proved to be too large, however, with prices soaring 70 percent between 2002 and 2006. The unwinding from this boom is dragging down the entire economy. Home prices have plummeted 42 percent over the past three years. Home construction has plummeted more than 90 percent from the peaks reached three years ago.