There are sinkholes in a lot of places, not just this area. For example in Kentucky. Research it. A sinkhole is just an area where the supporting mass underground compressed. It's a simple, not inexpensive, fix of filling the void with another material such as concrete. This is not the reason the market declined. This would be a reason for a specific property to decline and a reason certain areas will never be worth as much as a different area. Just as risk of a hurricane doesn't stop people from living on the beach, a sinkhole won't stop people from living in Port Richey.
The housing market is bottoming out, prices may fall a little more, but they have just about stopped. The prices will then stagnate for awhile and then slowly start to appreciate again.
The problem was loans were super easy to get and that caused a lot of buyers to flood the market.
Prices starting jumping higher because demand was higher.
Prices/value were exaggerated and/or buyers income were over estimated and they were qualifying to purchase a higher priced home.
Then jobs were lost or people laid off or business moved. People couldn't find a job or pay for their homes.
Property started being foreclosed on left and right.
People got scared of buying a home because they might loose their job. So they stopped buying.
Gas and food prices jumped and people were having trouble meeting ends and they were afraid to buy and not be able to make payments.
Banks got stricter guidelines to help avoid foreclosures, so many couldn't qualify for a loan.
All of a sudden there were plenty of properties, but no one to buy them. Banks lowered prices so that they would sell.
When they sold at lower prices, the properties around them were worth less.
This happened again and again.
Places that were more desirable in the beginning were hit hardest because they were the same properties that were over-priced.
Jeanne was exactly right there are many lenders out there, check out a few.