A longtime associate member of the Florida Building Materials Association told president Bill Tucker that he wouldn't be able to make his dues for the year.

"He was down to himself and his sister," Tucker says. "And he was going to have to lay off his sister."

The story is emblematic of Florida's home-building industry, particularly the southern portion of the state, where several markets rank among the nation's worst. "When we went down, it wasn't rolling downhill–we fell off a cliff," says Al Bavry, president and owner of Kimal Lumber, based in Nokomis on the Gulf Coast.

But so far, the region's pro-oriented independent dealers have survived. While some of the nation's biggest LBM operations have chosen to pull out of south Florida, the locally owned independents are making drastic cuts to staffing and operations, learning new tricks, and generally treading water until conditions improve.

Raymond Building Supply Corp., the eight-unit dealer based in North Fort Myers, saw single-family home starts plummet 50% to 75% in the markets it serves, compared to 2005-06 levels, while multifamily and condominium levels fell 60% to 80%, according to Brian Marten, executive vice president and COO. That's largely why Raymond's employee count has dropped from 1,000 two years ago to 300 now.

Among the top 75 markets ranked by Hanley Wood Market Intelligence, a sister company of ProSales, Naples ranked 72nd, Miami was 74th, and Fort Myers finished dead last in building permits issued in the 12 months ended Sept. 30, 2008, compared with the previous 12-month period. All three markets had a decline in starts of at least 56%, with Fort Myers seeing a 77.7% plunge.

Tucker says dealers across the state had the capacity to deliver materials for 200,000 housing starts in 2008. But at press time, he expected the year to finish with about 30,000 starts. "That was the problem in Florida: something had to give," he says. "There was too much capacity, and somehow you have to bring it back to equilibrium."