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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: C.K. Houston who wrote (68)	7/5/2001 1:34:30 AM
From: The Duke of URL©	Read Replies (2) \| Respond to of 306849

1981: Tax Reform Act provided powerful tax incentives for real-estate investment. Helped create a “boom” in real estate and contributed to over-building. Deregulation of Savings & Loan Associations starts here. [Deregulation of S&L’s was a BIG MISTAKE!!] It wasn't just deregulation, it was deregulation while maintaining deposit insurance. This put the government in the business of real estate development. And it put the owners of s and ls in business with free money, at the taxpayers expense of course. Of course it goes without saying that the owners of the s and ls kicked back a lot of money to our august legislators. All was sweetness and light until the government began to run out of money for two reasons: A lot of these deals would not be productive for 10 years, so, no addition to the income tax base---tax loss. and two, this an other bullshit programs that the congress came up with cost money. This created a huge budget deficit. Hence, the tax benefits of real estate had to be revoked. This, of course, caused unanticipated and major economic damage because it wiped out the good people and deals with the bad. This is the same thing that happened in 1929. That's why the regulations were there in the first place. JUST LIKE THE REGULATIONS THAT PREVENTED BANKS FROM BEING STOCK BROKERS-- same reasoning.

To: C.K. Houston who wrote (68)	7/5/2001 6:30:46 AM
From: HairBall	Read Replies (2) \| Respond to of 306849

CK Houston: You are right. Sorry, actually I did not say what I meant. I meant the peak of building activity was during 83 for Texas, Oklahoma and Colorado. Per my experience and the link I provided clearly shows 83 as the peak activity year. One of my Uncles was in the oil business in West Texas. The seventies brought wealth beyond his and his extended family's expectations as many were brought into the family business. However, it all came to a fairly abrupt end in the eighties. Thanks for the time line... Regards, LG

To: C.K. Houston who wrote (68)	7/5/2001 12:50:25 PM
From: davidrmm	Read Replies (1) \| Respond to of 306849

I agree with concerns of a Real Estate "crash" and your past time line was very informative. I am not a financial guru so I am not aware of the present financial developments that might cause the collapse of real estate and/or deepen it WHEN it occurs. What is going on now that is similar to 1979 to 1986 other than some oil price inflation? I missed it in your historical time line. At present there are differences i.e. double digit interest rates as a precursor. Right now Fed interest rates cuts seem to be holding it up and IMO why we haven't seen a down turn already. My wife wants to buy or build a new home NOW and I am trying to hold her off. What trends are you seeing for now? In Houston, TX, apartments have been going up like crazy and behind every rock and tree there seems to be a new real estate development. That trend is very much like the early 80's. I see an over build of inventory but thought the down cycle would have happened before now. Prices still seem to be holding up and going up. If the stock market begins to get well in the third quarter do you still predict a real estate slump? I would appreciate any in sights.