The pain in Spain is mainly on the coast; 2007 was a tough year, and in hindsight, 2008 will likely have been tougher. The price appreciation of real estate in Andalusia was at its peak in 2003, with 18.5%. By 2006, it had whittled down to 9.1% growth, and in 2007 turned negative; in fact, the market has since gone “no bid” in many places.
This is bad news for the coastal communities because, other than real estate, tourism, and the container port in Algeciras, there is no real economy in southern Spain. Mainly they sell sun, homes, and stuff to fill homes. And judging by the vacancies, more people are choosing sun over shade. This is worse than Miami, the other bubble-busting, sun-drenched prairie of empty homes. At least southern Florida has an attractive tax regime and modern infrastructure that lure new businesses and jobs. Not so southern Spain, where the tax code and infrastructure were both conceived in an era of donkey riding and windmill charging.
