New housing projects are also being hit by the credit crunch
There has been a large drop in the number of property sales across Devon and Cornwall.
Figures from the Land Registry show that 1,200 transactions took place in Devon in February 2007. This February the figure was 830.
In Plymouth, last February saw 466 transactions, this year 258. Torbay's figures dropped 284 to 181. Cornwall saw a fall from 822 sales to 540.
Business leaders say market conditions are also hitting new building projects.
Business leaders say the remaining empty flats in prestigious developments such as Princesshay in Exeter, which has 123 apartments, are proving difficult to sell because of the credit crunch and the current volatility in the mortgage market.
Jeremy Filmer-Bennet of the Devon & Cornwall Business Council said: "A third of the flats [in Princesshay], which have been up for sale for a year, are simply not being sold. But that's probably pretty good going at the moment."
Since the credit crunch began there have also been concerns that, not only will new homes fail to sell, but that it is not even economically viable to finish building them.
The downturn in sales has resulted in some new developments being put on hold.
Building work has come to a standstill at one housing development by Barratt in Torquay. Work is scheduled to restart later in the year, but only if market conditions change.
The news is a blow to nearby businesses who were relying on trade from the new residents.
Shop owner Wayne Jones said: "It's not really good for business, because we bought our shop two years ago with the understanding there was going to be lots of footfall and plenty of people walking around, and it just hasn't happened."
If the credit crunch continues to bring building to a standstill, it could cause more problems in the future, building experts have warned.
Chartered surveyor Roger Punch said: "We need new homes, and we need a volume of them of all different types.
"With the new building having slowed down to such an extent, we are going to have a real problem."