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Real Estate and Recessions
Having begun my Real Estate Career in early 1973, I know I have gone thru at least seven recessions during that time period.
During most of those, our Lubbock Real Estate market was affected very little if any in at least five of those. Most of the recessions we were coming out of as Lubbock just started to feel the recession. With the exception of 1981-1982, most folks were able to make a decent living and sell properties quite easily in the Lubbock Market. What made 1981-1982 so difficult for Lubbock was interest rates of 13% and higher, coupled with a retraction in employees at Texas Instruments from 10,000 to 3,000, and a couple of smaller manufactures moving from Lubbock and eliminating another 500-700 jobs. Lubbock was a considerably smaller population then, about 180,000 and we had over 2,500 properties on the market then. Prices did retract during that time.
Lubbock did pretty good on the single family residence sales in the recession that hit Texas heavily during 1986-87 and what brought on the Savings and Loans collapse of 1989-90.
We didn't really feel the recession brought on shortly after 911 at all. Part of this is no large manufacturing in Lubbock. Usually, Recessions bring lower interest rates to the Lubbock Market.
Over any ten year period since 1970, appreciation rates for Lubbock properties average less than 3% annually. We never have double digit appreciation rates. Our market isn't over inflated.
People always get on the Bandwagon when the Real Estate Market is hot, and pay premium prices. Then they seem to be reluctant when the market is in the doldrums and prices are low. The smart money takes advantage of the doldrums, particularly when mortgage rates are where they are now, the lowest since World War II. 3 3/4 % for a 15 year loan, 4 ¼ % for a 30 year loan and prices for Lubbock at about 90% of three years ago. Nope, we aren't going the way of Phoenix, Las Vegas and Florida so don't expect 50-60% discounts on our properties.
If you have financial stability, there is just no better time to buy than now.
If you think the USA will have a depression and feel all snug in having your money in the FDIC insured bank account, you might need to think again. If all FDIC insured accounts had to be made good by our Federal Govt., then most likely your money would be worth about 1/10th what it is today, the Feds are going to have to print a lot of money.
Use the fear factor to your advantage and buy smart. Buy today!
