The '00s Sunbelt housing crash had, relatively speaking, one exception: The Lone Star State.
Peak-to-trough, home prices in markets like Austin and Dallas only fell -8.5% and -10.5%, respectively, while house prices tracked by ZHVI fell -63.9% in Las Vegas, -56.4% in Phoenix,… twitter.com/i/web/status/1…
While zealous lenders across the nation were allowing borrowers to take on mortgages without putting much down, Texas stuck with conservative lending practices during the '00s.
According to the Texas A&M Real Estate Center, that helped markets like Austin avoid the worst of the… twitter.com/i/web/status/1…
Texas was slow to allow home-equity lending, and when it did so in '97, it "restricted the total of all mortgage deb from exceeding 80 percent of the home's fair-market value" recenter.tamu.edu/articles/resea…
And while markets like Las Vegas and Phoenix boomed during the '00s, markets like Austin stayed fairly tame.
To some degree, that helped to insulate Austin from the '00s housing crash.
Fast-forward to the pandemic, and Austin was at the epicenter of the boom.
Between March 2020 and July 2022, Austin home prices soared 58.5%.
Keep in mind a normal year, nationally speaking, is +4.6%.
That type of home price appreciation—especially when it's driven by outside money pouring in—puts a strain on fundamentals.
Once mortgage rates spiked in '22, that went from "strain" to "pain" and Austin moved into correction-mode.
Some Austin investors, as the boom went on, were buying properties that weren't cash flowing. That can feed into a correction.
We've went 9 straight months without setting an all-time high (ATH) for U.S. home prices.
IF seasonally adjusted prices, as measured by Case-Shiller, keep rising at March's pace (+0.42%), we'd set a new ATH once the September 2023 reading publishes.
IF that happened, the streak (of months without an ATH Case-Shiller) would top out at 15 months this cycle.
The early '90s correction made it 37 months, and the '00s crash went 116 months.
The early '90s correction wasn't notable for its national decline (it only saw a -2.2% seasonally adjusted peak-to-trough), instead it's remembered for how long it took to bounce back into growth mode.