I was visiting with some real estate agents this week, and someone asked if I thought the North Texas property market today was as bad off as in the 1980s.
Oh, Lord, I hope not.
Indeed, I know it isn't so. The financial sector storm that's now roiling the real estate business is just a sprinkle compared with the hurricane that hit housing and commercial property here in the late 1980s.
Back then, we had almost a 15-month supply of unsold houses on the market – double today's home inventory.
And residential prices fell more than 25 percent on average in North Texas as foreclosures and a regional economic slump battered the local housing market.
So far, the Dallas-Fort Worth economy is still adding thousands of jobs. And the dip in home prices we've seen is just a smidgen.
On the commercial side, construction is slowing because of the credit crunch. But unlike in previous national economic slowdowns, there's not a big overhang of vacant office, warehouse and shopping space.
And the apartment market is getting a boost from folks who are sitting out the current housing market turmoil.
So everything's peachy, right? Nope, there are some problems.
Foreclosures in the D-FW area are at a record high and aren't likely to decline soon. And homebuilding starts are off by more than half from their recent peak.
More troubling is the potential for continued pain in the financial sector, which could tighten further requirements for real estate loans and put the quash on a quick housing market recovery. Rising home loan rates are part of that.
Also, nightly news shots of folks lined up outside failed banks trying to get their dough don't help consumer confidence.
Lenders that are in dire financial straits are one of the biggest drags on a real estate market.
That's something we for sure learned here in the 1980s.
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