March 26 (Bloomberg) -- Miami-area homeowner Richard Welch is spending $70 less on groceries a week after his house lost $145,000 in value. Rita Roland cut off 11 inches of hair to save on salon trips, and Victor Parris stopped drinking his favorite brands of dark ale.

``Absolutely, I feel less wealthy than I did in 2006,'' said Welch, 48, a corporate tax auditor. He said he and his wife, Barbara, are slashing spending by 30 percent, including canceling their cable television.

The residents of Melrose Cove, a Miramar, Florida, subdivision 23 miles (37 kilometers) north of Miami, are cutting back after regional house prices tied with Las Vegas in dropping more than any other U.S. metropolitan area in January. They're giving up shopping trips, restaurant dinners, movies and vacations, demonstrating how the housing market is damaging consumer spending and sentiment.

The Melrose Cove homeowners' association expects to bring in $20,000 less in dues this year as residents struggle to pay bills. The group plans to reduce spending on landscaping, painting and other improvements by $41,000, said Welch, the association's president.

Falling Home Prices

Home prices in the Miami region fell 19.3 percent year- over-year in January, tied with Las Vegas for the largest drop among 20 metro areas tracked by the S&P/Case-Shiller index.

Sales of existing single-family homes statewide fell in February by 25 percent from a year earlier, and the median sales price dropped 16 percent to $198,900, according to the Florida Association of Realtors.

Eight of Melrose Cove's 153 single-family homes are in foreclosure, Welch said. Fifteen percent of the other households are delinquent on quarterly homeowners' dues, he added.

Families began pouring into Miramar, which means ``Look at the Sea'' in Spanish, after Hurricane Andrew in 1992 forced some to flee south Miami-Dade County for safer neighborhoods. With 111,000 residents, the city's population has more than doubled since the early 1990s.

Roland, a single mother, left Los Angeles and moved to Melrose Cove in 2004, lured by the lower costs and slower way of life. She bought a three-bedroom house, her first, for about $350,000 and intended to sell for a higher price after five years, she said. Her house hasn't appreciated since January 2007, when it was worth about $425,000.

House as Bank Account

``I looked at my house as a bank account that was going to accrue interest on a daily, monthly, annual basis,'' she said. ``I'm looking at not gaining money on this stock that I call a house, and may actually lose money.''

To save more than $1,600 a year, Roland said she cut her 14-inch-long hair to three inches so she wouldn't have to pay for Japanese-style thermal straightening. She's given up $400 monthly shopping trips to the mall with her 6-year-old son, and hasn't bought any new clothes or shoes since October.

Roland said she never tapped her home equity with a line of credit. ``I didn't want the headache,'' she said.

Martha Rodriguez, a 34-year-old executive assistant, said her husband's sister bought the house next door for $330,000 with no down payment in 2006. Her sister-in-law, a manicurist from New York, moved out of Melrose Cove in August after her monthly house payments jumped to $3,000 from $1,900 and the property fell into foreclosure, Rodriguez said.

Next door to Parris, a 53-year-old energy analyst for the U.S. Coast Guard, is a home that's been in foreclosure since last year.

No More Guinness

Parris stopped buying Guinness and Royal Extra beers for himself or a round for friends, which used to cost $50 to $60 every Friday night. He's also giving up weekly dinners at the Crab House and Bahama Breeze to save more of his $69,000 salary, Parris said.

Businesses have had a corresponding slide in sales. Taxable sales in the Fort Lauderdale area were down 7.5 percent in January compared with the same month a year earlier.

Less than two miles from Melrose Cove, Home KO, which sells wood kitchen cabinets and bathroom fixtures, saw sales fall 10 to 15 percent in February from a year before, said assistant manager Eileen Suarez. Sal's Italian Ristorante is getting more pizza orders for delivery and pickup and fewer customers dining in, said co-owner Clifford Marzouka.

Welch, a former trading assistant at Dean Witter & Co., said he bought his house for $201,000 in 2001, and watched its value climb to $595,000 by early 2007, then drop to $450,000. He took out a home equity line of credit in 2006 to refinance a second mortgage with a variable rate.

Lowball Offers

Annette Aquino, a 42-year-old music-industry production manager, put her three-bedroom home up for sale after a divorce in October 2007. She's dropped the price from $400,000 to $370,000, and is dismayed to be getting offers between $250,000 and $300,000.

In 2006, Aquino and her then-husband spent $2,500 for a vacation to Puerto Rico. Last month, she bought two tickets to New York City on Spirit Airlines for $77. She walked through Central Park with her daughter, got drinks at Starbucks and looked at snow for the first time. Total cost of the five-day trip that included a stay at a friend's place: $200.

``I'm not in the same situation as those people in foreclosure,'' Aquino said, knocking on her wooden kitchen table. ``But the way it's going, I could be.''

To contact the reporter on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net

Last Updated: March 26, 2008 00:01 EDT