A "bad" market equals new housing starts, new development and increasing property values?

First let me start with a caveat...I am a Texas REALTOR who does business in the Texas Hill Country and we are very fortunate that we have not been exposed to some of the tragic fallout of the economic woes that plague many other markets.  With that being said I wake up this morning curious about what defines a "bad" market.  I have been invited to a Broker/Agent coffee in a couple of weeks being hosted by a developer (who I used to work for) announcing the grand opening of their latest (4th) upscale gated community in a rural/resort market.  I am delighted not only because I know this developer and the quality of work that he performs but also because it signals a stable real estate market for him to choose to open this development at this particular time.  Oh and one more reason...the gorgeous gated entry to this new development is at the end of the cul-de-sac that I live on!  I am seeing my property value increase even more..."YAY" me!

The week before this invitation arrived, I was driving into San Antonio, Texas down US Hwy. 281 and low and behold there are two new home subdivions under construction, with beautiful new homes popping up all over the hills.  To me, this is very encouraging, since I live and work in a market that has noticed a slowing over the past year or so.  But I must say, I have friends in the business who tell me last year was their best year ever...so maybe we should, as agents, get back to basics and get to work!  Additionally, property values in our market have actually increased in the past two years.  While the number of units sold has decreased, the sales prices has increased at a comfortable rate that is very much in line with the appreciation we experienced over the past five years when other markets where going bananas.

Now considering that the average sales price in the San Antonio metro market is $165,000 +/-, it is obvious that our biggest downfall in our market during the past couple of years has been the sub-prime market.  But just like in other parts of the nation, some folks got stupid and bought more than they could handle and bought when they maybe were not ready for the responsibility of home ownership and handling debt service.  I get tired of all the finger pointing, because quite frankly, I saw this coming and I believe many of you all did too.  It was obvious we were skating on thin ice, but what's done is done and as my late father used to say, "you can't put toothpaste back in the tube!"  What we need to focus on now is studying the data and the actions of that era and attempting not to repeat them again.

I know what you're thinking...we have had a recession every decade since the 60's and I am aware of that because I have lived through them all.  Yes, real estate and economics are cyclical, but it doesn't hurt to play responsibly.  I am thankful I live in a market where 80% of the sales are not distressed and where values are increasing and new housing starts and new development are occurring.  There are good things happening out there and there is light at the end of the tunnel.  For those of you who were not in the business in the 80s...we will prevail and we will have another good run!  In the meantime focus on positioning yourself in the market today for the comeback that will happen.