Where will you be during the Texas real estate bust? (Part 1)

Each generation has a big event that we remember with such passion that people know where they were when it happened. I'd seen a recounting on the History Channel in which U.S. Citizens described where they were when John F. Kennedy Jr. or Martin Luther King was shot. It has been said that Generation X and older will remember where they were on September 11th.

In residential real estate, we hear of Texas during the 1980's. Interest rates were in the 20s, so homes with 24% interest rates were common. There was no use of Adjustable Rate Mortgages (ARMs) or zero-down loans. Homes were selling like hotcakes. The Multiple Listing System(MLS) did not exist, so you had to visit an agent who would look up listings in a big, thick book.

Then, President Ronald Regan recalled a tax incentive that was causing investors to buy properties at an alarming rate just so they can deduct the loss as a write off. The Savings and Loan Crisis sealed our fates.

HAVE WE LEARNED ANYTHING?

Please come back to read the continuation of this story, (Part 2 of 2).

Comments

[Austin Realtor's Wife]

Dee, I look forward to Part 2 (and 3, 4, 5...?)!

My question regarding your series is, are you separating residential and commercial real estate? Time has treated both as different animals (take for instance the S&L bust in the late 80's- residential hit rock bottom, but commercial made out like bandits buying up land like crazy).

Great blog idea!

[Dee Copeland]

This is more about residential. Investors and buyers lost their shirts. Those who survived tell the tales of their war wounds. Our current "hot" market makes them sit back and think that maybe we're going down the same path.