Easy-money loans fueled a real estate boom, but now they’re causing problems. In Cape Coral, Florida, where many people invested their money in homes during the pandemic, builders are seeing the consequences of taking on too much risk.
Dave Diaz is one builder who’s noticed the signs of trouble. He pulls up to an unfinished house and sees abandoned work permits, coffee cups, and other signs that workers have fled. The homeowner, like many others, couldn’t afford to finish the project without the financing they took out.
This is what happens when easy-money loans are too good to be true. In this neighborhood called Gator Circle, cheap financing led to a surge in real estate buying during the pandemic. But now, as the market cools down, the loans that fueled the boom are causing problems for everyone involved – including homeowners who invested their money and builders like Diaz who took on too much risk.
Source: https://www.bloomberg.com/news/features/2026-02-08/private-credit-loans-are-driving-foreclosures-in-the-home-flipping-market