1980's RE (by 6x6 [TN]) Jan 6, 2021 12:56 PM|
1980's RE (by RB [MI]) Jan 6, 2021 1:16 PM
1980's RE (by Nicole [PA]) Jan 6, 2021 1:45 PM
1980's RE (by 6x6 [TN]) Jan 6, 2021 1:59 PM
1980's RE (by Tony [NJ]) Jan 6, 2021 2:19 PM
1980's RE (by Jim in O C [CA]) Jan 6, 2021 2:45 PM
1980's RE (by Richard [MI]) Jan 6, 2021 2:58 PM
1980's RE (by PG [SC]) Jan 6, 2021 3:56 PM
1980's RE (by Gene [OH]) Jan 6, 2021 4:16 PM
1980's RE (by NE [PA]) Jan 6, 2021 4:38 PM
1980's RE (by Ken [NY]) Jan 6, 2021 4:58 PM
1980's RE (by Dave [MO]) Jan 6, 2021 5:21 PM
1980's RE (by Busy [WI]) Jan 6, 2021 5:22 PM
1980's RE (by WMH [NC]) Jan 6, 2021 5:48 PM
1980's RE (by MikeA [TX]) Jan 6, 2021 6:00 PM
1980's RE (by nhsailmaker [NH]) Jan 6, 2021 6:00 PM
1980's RE (by Ray-N-Pa [PA]) Jan 6, 2021 8:52 PM
1980's RE (by Nicole [PA]) Jan 6, 2021 10:27 PM
1980's RE (by Dee Ann [WI]) Jan 7, 2021 1:19 AM
1980's RE (by T [IN]) Jan 7, 2021 7:24 PM
1980's RE (by Sisco [MO]) Jan 7, 2021 7:47 PM
1980's RE (by 6x6 [TN]) Jan 8, 2021 9:37 AM
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1980's RE (by 6x6 [TN]) Posted on: Jan 6, 2021 12:56 PM
I was wondering if someone would explain to me what RE was like in the 1980's with high inflation.
Thank you for your time. --73.120.xx.xxx
1980's RE (by RB [MI]) Posted on: Jan 6, 2021 1:16 PM
I bought a SFH on land contract in '79,
with an interest rate of 10%. --199.192.xxx.xxx
1980's RE (by Nicole [PA]) Posted on: Jan 6, 2021 1:45 PM
early 80s interest in homes was 17+%. You could also buy a five year old 4 bedroom, 2 bath house with a barn and two acres for $45,000. Same house today valued at $266,000 today. --72.70.xxx.xxx
1980's RE (by 6x6 [TN]) Posted on: Jan 6, 2021 1:59 PM
Thank you for the responses thus far.
Were houses selling slowly and was there a lot of inventory or people selling? --73.120.xx.xxx
1980's RE (by Tony [NJ]) Posted on: Jan 6, 2021 2:19 PM
There were 16 and 17% mortgages late 70's early 80's. Was 7 and 8% in mid 70's. I had a friend who had $150,000 cash and he had some local banks "bidding" on it - to borrow it from him - for around 14 and 15%. Change of presidents changed the economy. Money loosened up, and 7 - 8% were popular interest rates. Around here home values were increasing 2 - 3% per month between 1985 and 1988. In the election of 1986, the dems took the house and senate. They did "tax reform" in 1987 removing many capital gains incentives, leading to a softening in lending , home sales volume, and home values. Home values here about doubled from 1984 to 1988, then dropped around 30% by early 1994. These numbers & percentages in my area are not exaggerations. I had an appraiser friend who brought this to my attention. Got my calculator out and yes - he was right. Around here it took until 2002-2003 for homes to reach 1988 values. I may be selling out this year ..... How did I do 6X6? --73.215.xxx.xx
1980's RE (by Jim in O C [CA]) Posted on: Jan 6, 2021 2:45 PM
InBought two houses in 1980 without looking at them. My realtor had signed offers and a deposit check and he would describe the houses to me because by the time I got off work they would be sold. In California it was nothing for Houses to go up in value $500 to $1000 a month or more.
1980's RE (by Richard [MI]) Posted on: Jan 6, 2021 2:58 PM
In the late 70's and early 80's, in Santa Barbara where I owned a construction business, when the interest rates went to 18 percent, almost all building stopped. Prices were stag net and sometimes dropped some, but not a lot since the area is typically high priced. I managed to get survive by focusing on the rich people for business. (If you own a bank, it's easy to get a loan and at a good rate too). Once Reagan got in and the rates went down, construction went wild with building everywhere. It was the best of times. Between 1983 and 1989 I made enough to retire early and I sold out in 1989 and retired. Prices through the 80's there went way up, often gaining 40-50 percent per year. Of course, prices vary by location and desirability. It's all in how much people want to live in a particular place. --75.7.xx.xx
1980's RE (by PG [SC]) Posted on: Jan 6, 2021 3:56 PM
In 1985/86 I built 1800 sf of the house I live in now. Spent 30k of cash I had saved.
When I ran out of money I went to two local banks - they said I had an unfinished house - it was completely dried in with electrical and plumbing - no loan even though I had a good paying job - never forget what the Bankers told me.
Finally found a bank that loaned me the money at 18% - as interest rates went down I refinanced.
I did not spend much time thinking about the high interest rate - every minute I wasn't working my regular job I was working on the house. Time well spent.
Fed Chair Paul Volcker was fighting inflation.
Added 1200 sf in 1999 at 5.5%.
My how times change.
1980's RE (by Gene [OH]) Posted on: Jan 6, 2021 4:16 PM
I bought my first single family rental house in 1989 for $56,900. I had the back up contract and the realtor who had the primary contract couldn't loan the money to buy it. I had the money saved for the down payment and I assumed a VA loan. It was a good deal at the time and has been a solid rental. However, it's appreciation has been slow, but it has recently been valued (online valuation) at $195,000. The area has started to really become desirable. I didn't buy another rental house until 1995. --104.225.xxx.xxx
1980's RE (by NE [PA]) Posted on: Jan 6, 2021 4:38 PM
I was born in '81. My crib was nice. --70.44.xxx.xx
1980's RE (by Ken [NY]) Posted on: Jan 6, 2021 4:58 PM
I was in college in 83,that christmas break i went with my dad when we looked at several rentals and he bought a 2 family,the following year the market doubled and he sold it after doing nothing but collecting rent.Wish he had bought 20 of them --72.231.xxx.xxx
1980's RE (by Dave [MO]) Posted on: Jan 6, 2021 5:21 PM
Ken, thatís where the real estate market is today. Sell, sell, sell! --173.216.xxx.xx
1980's RE (by Busy [WI]) Posted on: Jan 6, 2021 5:22 PM
Iíve already posted my interest in RE in the 80s in great detail in a previous thread months ago, so I wonít repost. Other than to say, RE was very regional in the 80s. Parts of the country were going gangbusters, parts (rust belt) were pretty much shut down.
Similar to today. --172.56.xx.xx
1980's RE (by WMH [NC]) Posted on: Jan 6, 2021 5:48 PM
Bought 1st house 1985, assumed a NEGATIVE amortization loan! Can you imagine they used to give those???
Sold it 6 weeks later and made $11k, bought another house in another state with a regular mortgage at 10/11%? --50.82.xxx.xxx
1980's RE (by MikeA [TX]) Posted on: Jan 6, 2021 6:00 PM
You really have to break it down into time periods. Starting in 1978-79 inflation started rising. Prior to that interest rates were 4-6% on a 30 year loan. It peaked around 1982, interest rates were 18%+. And then after 1984-5 things started calming back down with interest rates in the 7-8%.
During a peak 3-5 years a number of things happened. First, you couldn't get loans, or couldn't afford them. In most parts of the country that halted new construction and major remodels. Second, lots of retired folk on a fixed pensions suddenly couldn't afford food much less to keep their homes, many lost their homes to taxes or in such disrepair that they weren't habitable. Investors were locked into leases, material prices and labor went through the roof and those with Adjustable Rate Mortgages suddenly faced 50-75% higher payments with no ability to cover it. If they didn't have cash reserves they were in trouble.
IF you had cash you were king. One of my dad's businesses was a real estate office. He had an older gentleman that needed to sell his home to be able to afford to go into a nursing home, his options for a buyer were limited given the unique time. I was in college and had $14,000 that I had socked away working summers putting up hay (a hole nuther story)so I bought it and rented it for 2 years while I finished school and then sold it in 1984 for $28,000. By then things had started settling down and I was moving several states away to start a job. Had I kept it I'm sure it would have doubled again in another 2-3 years.
So some lessons I learned about hyper inflationary periods:
Adjustable rate mortgages will kill you.
Mortgages, HELOC's, or any other form of borrowing will be all but impossible to get.
Deals will be everywhere but beware of major remodels, the material will be hard to come by and super expensive.
Make sure you have some cash reserves to weather through.
Cash is king, you can buy cheap if you have cash to do it.
Finally, a fixed pension or annuity will loose it's buying power in a very short period of time. --64.130.xx.xxx
1980's RE (by nhsailmaker [NH]) Posted on: Jan 6, 2021 6:00 PM
80'S- I paid 21% to a private lender
Made a fortune on a flip
3 of us ( Bob Vila - This old House, And a Local developer) bid on the property and the old farmer decided he like my ideas
It was the goose that laid the golden egg and a start to my Real Estate Career -
I left a great International Insurance Broker job
Then Reagan got elected and the USA fixed the ills foist upon us by the the evil left --73.61.xx.xx
1980's RE (by Ray-N-Pa [PA]) Posted on: Jan 6, 2021 8:52 PM
The money in real estate was not in the real estate itself in the 80's - the true money was in the financing of it.
Products like wrap around financing became wide spread.
The course I told you to purchase will be an outstanding tool so you can do your own wrap around financing.
Now you di make money on the place because of the interest rates, high inflation occurred - but adjust for inflation.....not so much.
You can make a solid spread using wrap around financing --24.101.xxx.xx
1980's RE (by Nicole [PA]) Posted on: Jan 6, 2021 10:27 PM
Also, C.D.s were paying 15+% interest --72.70.xxx.xxx
1980's RE (by Dee Ann [WI]) Posted on: Jan 7, 2021 1:19 AM
Bought my first Milwaukee duplex in late '79 for $49,000 with a $3000 step down mortgage (the seller put down $3000 to be applied to the prinipal at $1000/yr over a 3 year period.) Bought second property in neighboring suburb summer of '89 for $110,000 at 12%. Was able to get a loan due to husband's good job, but bank wanted to know why I had not been working for 2 years, even though I was working when we applied for the mortgage. A few years later refinanced at 9%.
Interesting thread. --75.11.xx.xx
1980's RE (by T [IN]) Posted on: Jan 7, 2021 7:24 PM
Real estate moved, but there was alot of owner financing. Price reduced, but the owners made %% on the interest rate side.
Farm land wise, locally... dad said a farm sold 3k/ac in 1979. Just down the road in 1983, $900/ac. Wasn't until the late 90's did it get back to the 3K/ac price. Today, 15-35K/ac. Not farm use though. --76.77.xxx.xxx
1980's RE (by Sisco [MO]) Posted on: Jan 7, 2021 7:47 PM
House prices were suppressed by high interest rates, also by tight lending standards. People bought a lot less house until late 80ís.
We have had 35 years of falling interest rates and that factor alone has primarily driven market appreciation of houses. --67.43.xxx.xxx
1980's RE (by 6x6 [TN]) Posted on: Jan 8, 2021 9:37 AM
Thank you everyone for the replies.
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