I guess they are to a degree. I mean, 7% unemployment is nothing to sneeze at. Some of the gray-haired friends I have in the real estate industry are starting to sound like jaded upperclassmen. You know, "We had to take our licks too, you Freshmen can't be exempt!"
What are they referring to? Well, take a look back to 1985-1990. In Texas, real estate sales were in the dumps. Dallas office buildings were largely vacant and doom and gloom was everywhere. Buyer's market? Too many days on market? Businesses folding and leaving Texas? Not good, friends. How'd that pan out?
Well, by 1995, Jim Mitchell reported that office space occupancy was like 89% in Texas! Apartment complexes were full, and even industrial occupancy was only 4% vacant. That's very healthy. But there had been about 5 years of economic uncertainty--specially in Texas. The old timers in my industry, see that the last two years in Texas real estate sales are merely a correction from a hyper-prosperous response to the pre-9/11 market. We all know that new home builders lost their stinking minds in some of the DFW suburbs and built like homeowners and their money both grew on trees! Of course we hit a more bearish market and of course profits in DFW real estate went down and inventory went up!
In other words, it was great in the mid-1990's, so folks got a little over confident, many racked up too much debt, and too many were greedy. Then, the Islamofascists swine attacked us on September the 11th, 2001 and burst the economic bubble we had enjoyed.
So where ware we? How bad are things, today? Well, find someone who owned a business in the 1970's and they'll have tales to scare you into feeling better.
Mr. Debt-Free, Dave Ramsey writes,
Yes, many people have lost their jobs and houses. You may be one of them. But
guess what? People have lost their jobs and houses even in a bull market. About 93% of people are still employed. That is pretty good! I was alive in the 1970s when unemployment hit double digits, and we’re nowhere near that right now! I’m not making light of the fact that some people are struggling; I’m just putting the situation in the proper perspective. (Read More from Dave)
I remember 1986 in Texas. My Dad's law firm represented Savings and Loans and they all died or had their DNA rewritten by the Feds to a degree that even the honest, sensible S&Ls went the way of the Dodo. I remember either me or Mom worrying that we'd starve. We didn't. In fact, my sisters graduated from $MU and since then, Mom and Dad built and sold two new houses. So, I think we made it.
Guess what? We're going to make it through this too.
If you need a reboot on your psychological, financial, occupational, and spiritual outlook on all things economic, check out my financial guru, Dave Ramsey =>: Seven action steps if you’ve lost your job (or think you might)