The active hurricane seasons in 2004 and 2005 have driven up insurance costs. Some of the effects will be felt gradually because businesses, which typically have leases of at least five years, may not be paying higher premiums yet. But when they do, the costs will be felt down the line.

The second biggest concern in the state's real estate industry is the softening housing market. Of special concern is the condominium market. Though 47 percent of respondents expect the price of single-family homes to lag behind inflation or even decline, 69 percent were pessimistic about condo prices.

The recent explosion in apartment-to-condo conversions has started to slow and will continue to do so as the housing market weakens, Archer says.

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