TAMPA -- For almost three decades, Marylin and Charles Sweeney worked through the hard winters of their native Rochester, N.Y., carefully saving from his salary as a mechanical engineer for Xerox Corp. toward the day when they might retire.

After their five children were grown, she added to the nest egg by working as a real estate agent.

In the early '80s, as the Sweeneys approached their mid-50s, their dreams turned to sun and brick and mortar when they visited their son at his new job in Tampa. The city was booming, the winters were warm, and hundreds of middle-class American couples like themselves were making their way down Interstate 75 from the nation's industrial heartland through Chattanooga and Atlanta for retirement on the west coast of Florida.

When they bought a two-bedroom poolside apartment for $47,500 in 1984, looking to their full retirement in 1990, the Sweeneys had little inkling that they and their new retirement home were soon to be caught up in the crumbling of the Tampa Bay real estate market and the nation's savings and loan debacle.

Six years ago, a retirement home in the Tampa Bay area seemed to be not only the answer to a dream, but also a great investment. The area was riding the crest of a real estate explosion, with the number of jobs nearly doubling in the decade. Shopping centers, office buildings and residential subdivisions were sprouting up almost everywhere.

In those days, money was flowing into the pockets of bankers and builders, construction workers and carpet installers, real estate agents and the people who sell things to those people.

Now, the Sweeneys, and all those bankers and construction workers and carpet installers, are discovering what happens when a real estate boom goes bust. Caught in the rip tide, the Sweeneys and thousands of other residents of Tampa are struggling to regain their financial and emotional footing.

One construction worker in Pasco County who earned a good salary building high-rises, for example, is now bagging groceries at a supermarket. A seasoned real estate broker in Clearwater is selling cut-rate vacation packages by telephone at night. And real estate consultant Marvin Rose of Tarpon Springs, who provides statistical information to the home-building industry, has watched so many clients go into bankruptcy or leave the industry that he sometimes wonders whether his newsletter business will survive.

"This pretty much caught us by surprise," said Rose, who has shifted his efforts toward helping builders develop survival strategies. "There are a lot of people scratching their heads, and fortunately, that's something I can help them do."

Tampa's economic future began growing dark in 1988. For the Sweeneys, the first signs of trouble came when the developer of their complex failed to make payments to his lender, Tampa-based Freedom Savings and Loan Association, and Freedom foreclosed on him. Then Freedom collapsed and it was taken over by federal regulators.

It all took a very personal turn early this month, when the Sweeneys learned the latest frightening news: The Resolution Trust Corp. (RTC), the federal agency created last year to sift through the debris of the savings and loan industry and salvage what cash it can for American taxpayers, sold half of their condominium complex to Canadian investors for about $17,000 a unit -- some $30,000 less than the Sweeneys paid six years ago for their unit.

"This is the year we were going to retire, so we're twice as upset," said Marylin Sweeney, who suffered a heart attack in 1986 and has been unable to work full-time since then.

"Now we don't know what to do," she said.

The Sweeneys aren't alone in feeling confused and worried about changes in the state's real estate market. The Tampa Bay area and the rest of Florida in the 1980s was believed to be virtually recession-proof, with a warm sun shining over an an ever-booming real estate market. Many residents viewed Florida as the California of the 1990s.

But with the bursting of the economic bubble, Florida now has the third-highest number of RTC-owned properties among the 50 states, behind Texas and Louisiana. Lenders in the region have reclaimed thousands of other properties as owners and investors fell behind on mortgages. Property values have fallen dramatically in many places and bankruptcies are at record highs.

Sales of new homes in the Tampa area, meanwhile, have plummeted 40 percent since the peak of the market a few years ago, and the condominium market, especially for average projects that were converted from apartments, has taken a beating. So far, single-family homes and luxury beachfront complexes have been spared from the general decline.

Most frightening, however, is the prospect that several large Florida financial institutions may falter inthe near future, dragged down by the same real estate woes that are plaguing homeowners, real estate investors and builders. Even healthy banks are finding themselves saddled with a growing number of bad real estate loans. By the third quarter of the year, about 6.2 percent of all real estate loans held by Florida banks were characterized as "troubled" by the Federal Deposit Insurance Corp., which oversees the banking industry, up from about 4 percent only three months earlier.

"Everybody in the state is scared," said Lawrence R. Sherry of real estate consulting company Kenneth Leventhal in Miami. "Nobody in real estate or banking has ever had to deal with anything like this. ... You can't understand it."

"The market is in chaos," said Tampa real estate attorney David G. Mulock. The values of properties are falling "and people don't like it. People don't want the RTC to sell properties because it drives the issue home."

Within Florida, the troubles hit first in Tampa and have since spread. Of what the federal government holds in Florida through the RTC, for instance, about one-third is located in the four counties that compose the Tampa Bay area.

In early November, the RTC owned about 680 properties there before selling the 128 units in the complex where the Sweeneys live. Another 155 properties were added in the middle of the month when troubled St. Petersburg-based Florida Federal Savings Bank, one of the nation's oldest and largest savings and loan institutions, was seized by federal regulators. Then there are the 74 properties held by the FDIC.

These government holdings span the spectrum of Florida real estate. They include hundreds of individual condominium units sprinkled in dozens of complexes, hundreds of acres of land, several regional shopping centers, a nursing home, office buildings, warehouses, auto repair shops and single-family homes.

Even today it remains something of a mystery as to why, of all places in Florida, Tampa was the first to experience the meltdown in the real estate and banking industries. Unlike the Atlantic Coast of Florida, where glitzy Palm Beach County attracted such high-rollers as Donald Trump, and Miami Beach, which draws in Latin American flight capital and drug money, Tampa Bay has seemed a solid bedrock community, the kind of spot where Midwesterners could -- and did -- feel at home.

Tampa is "much more middle America," Sherry said. "It's much more down-home."

Until the late 1970s, Tampa was a sleepy Gulf Coast town known mostly as the winter home of major-league baseball teams such as the Cincinnati Reds and the St. Louis Cardinals (and hopes to capitalize on that tradition as a finalist for one of the two new National League franchises). A wheeling-and-dealing land boom during the 1920s brought a surge in development activity, but then the Great Depression settled in, and little was built in downtown Tampa between the 1930s and the late 1950s. After that, downtown Tampa added about one major office building every five years or so, mostly built by local people to meet local needs.

By 1975, there was a certain expectancy in the air, Sherry recalled. News of the region's sunny climate, population growth and easy accessibility began spreading in development and investment circles, and soon their representatives were scouring the area and making big plans.

"Literally overnight, it attracted all the players," Sherry said.

The out-of-town builders arrived in droves. They came from Texas, they came from New York, they came from everywhere. By 1988, only four of Tampa's 10-biggest office developers hailed from Tampa, as were only two of the top 10 who were building shopping centers, according to the Maddux Report, a St. Petersburg-based industry newsletter.

"Pillagers ... hungry for deals," is how Florida real estate economist R. Thomas Powers of Lauderdale-by-the-Sea describes them now.

The builders and lenders who arrived in Tampa came armed with cash. Lots of cash. Much of it was put into their pockets by newly deregulated savings and loan associations eager to share in the high profits of real estate development and by real estate syndicators loaded with money raised from wealthy investors looking for tax breaks.

"I'm under the impression that even if we did everything wrong, we'd still be successful," an ambitious first-time developer told the Maddux Report in the mid-1980s.

Local bankers, meanwhile, wanted in on the action. One local savings and loan institution, for example, made it clear it aimed to please. "When you say jump, we say how high," it wrote in an advertisement aimed at builders and investors.

Amid the go-go mentality, a warning sign was ignored. A rule of thumb is that a healthy vacancy rate for an office market is about 5 percent. By the mid-1980s, more than one-quarter of the office space in the area was vacant and unleased, but construction and development plans proceeded apace. The market had grown from about 10 million square feet in 1981 to 25 million square feet in 1990.

During this period, few people questioned whether there was adequate demand for the hundreds of thousands of structures being built. Few apparently asked if there were enough workers to fill the offices, enough well-heeled shoppers to buy the goods, enough affluent couples to purchase the homes and condominiums.

"There's a fine line between optimism and opportunism, especially if people are pushing money your way," Sherry said.

Eventually, however, it became apparent that Tampa's overbuilding was too much of a good thing. With so much space unleased, rents began to fall. Investors lost interest in buying. Property prices for run-of-the-mill shopping plazas and office buildings fell 30 percent between 1987 and 1990.

Now, it seems, things could get even worse.

What now most frightens many observers is the potential domino effect if homeowners and real estate investors start to walk away from their properties, as they did in Texas and Colorado in the recent downturn -- walking away, as well, from their obligations to make loan payments to banks and thrift institutions. As real estate prices fall, one bank's faltering real estate loan portfolio can infect others, and the contagion spreads through the region.

The Sweeneys are wavering on the first step of this potential new cycle of financial despair. With their condominium having declined in value by almost two-thirds -- in part thanks to the RTC's bulk sale of the neighboring units -- the Sweeneys are reluctant to continue making burdensome monthly payments on a withering investment.

Marylin Sweeney is especially angry that she has been caught up in something for which she wasn't responsible. The federal government, she believes, is making their situation worse instead of better.

"Everybody wanted to jump on the real estate bandwagon back then -- and the banks were letting them," she said, describing how first the developer, then another investor and then officials at Freedom Savings & Loan had slipped away from their responsibilities for the project where she lives. The worst blow, she said, was that the RTC, the government agency charged with protecting taxpayers and cleaning up the mess, has done them the most damage.

In their anger and frustration, the Sweeneys are talking about taking a step they once would never have considered: Walking away from their loan. The mortgage is now held by Chase Manhattan Bank, which took it over from Freedom. Marylin Sweeney said that others in their condominium complex are considering the same action.

"I've said to my husband, 'Let's walk away,' " she said. "{But} we're just honest people. Walking away is hard to do when you've always paid your bills. We had learned that if we make a promise, we had to keep our promise.

"Now, of course, hindsight is 20-20," she said.