When we begin a discussion about housing crashes in the history of the United States, most people think of the crisis that occurred in most recent history in 2008. The truth of the matter is that there have been multiple crashes where home sales sagged miserably as sub prime lending rates skyrocketed, making new home ownership well out of the reach for many. When economic bubbles occur in the real estate market there is usually a land boom with an increase in the market price which is followed by skyrocketing housing prices that become unsustainable, and then, a crash occurs. Upon research, we’ve discovered multiple periods where new and pre-owned home sales were down and are the most prominent 10 housing crashes in the history of the United States.
1. The Housing Crash of 2008 with unique effects on Las Vegas
After the housing bubble began to form in 2003, hitting a peak in 2005, Las Vegas was one of the areas including about half of the US which was in for a sharp decline. After the peak of home prices in 2006 for the rest of the nation, home prices took a big drop and Las Vegas felt the crisis is 2006. This was just the beginning through. The trend would continue all the way through 2012 in this area, with variances in the crisis throughout the rest of the country throughout this period. Prices would fall incrementally until some reached a depreciation of up to 60 percent in this city, roughly twice that experienced by other segments of the nation’s housing market. Part of the problem for the area was due to homeowner borrowing against the value of their homes believing that the trend would turn around, but it didn’t, at least not fast enough.
2. The Panic of 1873
During this period of time the depression in Europe and North America lasted from 1973 until 1879. It caused the construction of new homes and other buildings to come to a halt as wages were cut and there was a serious shortage of money. In addition to this, it caused the real estate crash of 1873 as the values of homes fell sharply as profits from business owners dissolved.
3. The Boom and Bust of 1837
Another Housing crash that took place was in 1837. The land bubble which had occurred briefly prior had began to deteriorate and when lending policies in Great Britain changed, it had an impact on New York Banks and money could no longer be redeemed at the full face value, however, things improved the following year, but came crashing down again in a time of declining prices, failing businesses, unemployment and a sharp decline in land and home values which would persist until 1844.
4. The Crash of 1929
There was another period in the history of the United States when the real estate market experienced a violent down town. It happened in 1929 at the beginning of the great depression. This is a period in time when it would take a full decade to recover, although, Manhattan seemed to escape the severity of the downturn in comparison with other regions in the country.
5. The Panic of 1893
Argentina’s Baring Brothers Bank encouraged investment and when a massive failure in the 1890 wheat crop occurred along with a coup in Buenos Aires, investments come to an abrupt end causing international panic resulting in a run of US treasury gold by investors from Europe. A crash in wheat prices and a full blown economic crisis affected all sectors including the real estate market resulting in yet another decline in land and home prices.
6. The Panic of 1857
Another real estate bubble was formed during the 1850s when Congress made land warrants on trade goods, starting in 1852. Prices rose to high levels which could no longer be sustained and the bubble burst when the economic panic of 1857 broke with land and home prices declining rapidly.
7. The real estate downturn of the 1990s
There was also a bubble burst in 1990 in the real estate market. It is believed that the sharp rise in asset values and relaxed underwriting rules combined with other factors during the 1980s including savings and loan deregulations that led to the real estate down turn that took place in the early 1990’s.
8. Real estate Bust in 1910
There was another real estate bubble that developed just prior to 1910. Prices rose during the boom of the 1910 era with housing developers making bank on new lands available and the Western part of the country was being developed. Farmland was being farmed until a drought struck which caused a domino effect, particularly for homesteaders in Montana and by 1911, the bubble had burst and there was a decline in the value of real estate.
9. The Real Estate sag of 1986
Another decline in the real estate market took place in 1986. Although it didn’t come close to having the same effects as some of the more dramatic crashes, it followed a significant period of increasing real estate prices. The trend began in 1973/4 with homes particularly in selected areas of California increasing in value at a rapid rate. The bottom fell out and real estate prices took a down turn in 1986.
10. Real estate decline in Manhattan
The Manhattan real estate market is experiencing a decline in real estate values that is the steepest drop since the financial crisis. For five straight quarters, values have continued to drop and sales are down by 14 percent with apartments being offered for rent at lower prices. Could this signal the beginning of a bigger event?.