There is no denying that Florida foreclosures have had a huge effect on property values.  Even people only moderately educated in the field of real estate understand that one foreclosure can easily affect a whole neighborhood of property values and when you have multiple properties in the same area, declining home values can become a serious problem. 

For Florida, most properties have seen a 40% decline in value which in turn caused even more people to fall into foreclosure which caused property values to go down and I am sure you can sense the pattern from there. This round robin affect has had Florida struggling to market properties and to stop the number of foreclosure filings statewide. 

A number of people invested in Florida homes with the plan to buy and resell within a short period of time.  Of course, this was with the hopes of walking away with a profit in their pocket, but since 2008 and the giant belly flop of the market, that plan has left property owners unable to sell and more importantly it left them with higher monthly payments from the adjustable rate mortgages obtained to make the purchases at all.
So how can Florida change things around and is investing in Florida real estate still a good plan? Addressing the latter first, yes, Florida still has excellent investment potential.  Actually, there is no better time to invest in Florida real estate than right now.  You can purchase properties at amazingly low prices, secured with crazy low interest rates and with fixed rate mortgages. 

What is really going to change the face of Florida real estate though will be patience.  Investors with the buy to sell logic are going to need to wait out the boom-and-bust wave.  Predictions put recovery of property values into a minimum of 5 years.  Buy now and wait out the storm though and you could have more investment income than you know what to do with.  Florida will forever be an attraction to people looking for warmer weather, no income tax and lots of sunshine!