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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bozwood who wrote (16701)	7/19/2004 12:55:05 PM
From: t4texas	Respond to of 110194

well land just went into lots of receivership. i am sure you remember the resolution trust corporation. land (that could get a bid) prices went down really fast by (i am guessing) 30% to 50%. since no one would or could buy it, it just went to the banks who were also going bankrupt. the houses just stopped selling, but i had people in my organization who bought in the late 1980s and had their taxable property values at 30% lower in the early 1990s. of course those people who Had to sell for some reason lost some cash for sure. those who went bankrupt on their home ownership or apartment complex ownership were taken over by banks who also were going bankrupt.

To: bozwood who wrote (16701)	7/19/2004 3:22:33 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 110194

How much did real estate prices decline in Texas during the mid-1980's? Construction of the Tanglewood Apartment complex, located in an exclusive part of the city, had been completed in late 1984 for $64 million and partially rented. This "luxury" complex consisted of two and three bedroom apartments with all amenities. The bank foreclosed on the project and sold the complex to a group of investors from California for $18 million in 1986 - a $46 million dollar discount from the construction value. Based on available rents, I estimated the value of the apartment complex for the investor group at only $16.4 million. Although I'm sure this investment was eventually profitable for them, the $18 million price they paid represented a 10% ($1.6 million dollar) premium over what my analysis showed it was worth. In this example real estate prices declined somewhere between 72% and 75% over a two year period. The bankrupt property development group and the bank which subsequently failed shared the $46 million loss on construction cost.