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

To: John Vosilla who wrote (31506)	5/19/2005 11:22:08 AM
From: GraceZ	Respond to of 306849

Yes, by 1992 rates were falling. I remember looking for a house in 1987 and while the house we bought was under contract the rates went from 8% to 10%. The beginning of the end in my area was the one two punch of rising rates and tax law changes , changes which had a much bigger effect in the city because of the sheer amount of investment property. Still it took until 1991-92 to really start effecting prices on a widespread way because people tended to simply remove their houses from the market if they couldn't sell them for what they thought they needed. Rates fell from that 10% high slowly and RE prices unwound slowly around here, although they wound up pulling back as much as 20-30%. Prices and rates bottomed around 1993-94 before rising again in the late nineties. I'm sure it rolled out a little differently in each individual market. It wasn't just the S&Ls which suffered in the commercial RE fallout. I remember buying commercial banks for 70% of book because of the almost continuous write downs of bad loans and the pressure on their stock prices put several well established local banks into the hands of acquirers.