Sunday, October 7, 2007

Worst in 40 Years?

One of my favorite columns, published each Sunday, is "House Calls by Edith Lank" ( Today, she addresses the following question:

Ms. Lank: I have a friend who is a real estate agent and insists that the current real estate market is the worst in 40 years. I just don't believe it. I remember the early 1970s in Texas for one. There must be some history on this. — P.S.

Answer: Your friend must have forgotten the early 1980s, when mortgage interest rates reached 17 and 18 percent and lenders wanted 50 percent down. They just didn't have much money available to lend. It was a bad time to be buying one's first home. People did it, though, and of course, they all have long since refinanced to lower rates.

I remember so many savings and loan associations failing then (you're right, many in Texas) that the federal government had to take over. So yes, there have been much worse real estate markets just within the past 25 years. Maybe your friend the agent is too young to remember. And at any rate, real estate markets vary widely from one area to another, and some places are holding their own quite well.

Well said! I guess it's always the worst time if you have to live through it. The ones we don't remember don't seem that bad, right?