Houston In The 1980s

[Subdude]

The Rendezvous Houston topic got me thinking about the big downturn. Bank failures, "see-through skyscrapers" and the "foreclosure belt". On the positive side, traffic got a lot better. Some places answered their phones "Houston Proud! How can I help you?"

[devonhart]

Foreclosure belt, thousands walked out on their mortgages. It was also a buyers market, we picked up a foreclosure at a very affordable price, 1/10th of what we paid for our house in the New York a decade later at the height of the housing market.

Edited July 5, 2008 by devonhart

[bmil128]

Ahh, good old Kathy Whitmire. Remember she also introduced us to good old Lee Brown....

[rps324]

It was rough then. A lot of stores closed down. I remember whole shopping centers being pretty much empty. The big apartment districts like Fondren SW, Broadway and Greenspoint all really took a hard hit and never did recover. Inner city areas like the Heights and Montrose that had started gentrifying just sort of stopped. Subdivisions out in suburbia had blocks and blocks of streets with no houses. In some of the tract home subdivisions you can still see the jump where all of the sudden you go from 70's style tract homes to 90's era red brick, (when building started to resume) right in the same subdivision.

Rents were unbelievably cheap. You could get a decent one bedroom apartment in the suburbs for $175 a month.

[mkultra25]

Anybody got a picture of a "Don't Shoot, Louie!" t-shirt? Google Image Search didn't turn up anything.

[crunchtastic]

Ahh, good old Kathy Whitmire. Remember she also introduced us to good old Lee Brown....

I seem to remember the city jail being called the Whitmire Hilton.

Love the picture of Bookstop. Ah, the 80s when there were useful shopping places in that center: Whole Foods, Butera's, Cactus.

[cowboybud]

Bum Phillips was actually fired after the 1980 season.

[sttombiz]

someone told me that when beltway 8 was completed (circa 87?) on the night or weekend it was finished the city threw a big party on the freeway and huey lewis and the news played. does anybody remember this?

I only bring this up because first it had to be awesome, and second I just saw huey lewis on a capitol fourth. still rockin.

[RedScare]

someone told me that when beltway 8 was completed (circa 87?) on the night or weekend it was finished the city threw a big party on the freeway and huey lewis and the news played. does anybody remember this?

I only bring this up because first it had to be awesome, and second I just saw huey lewis on a capitol fourth. still rockin.

Yeah, I do. Details are fuzzy (I was in my 20s, afterall), but I remember a stage right in the middle of the toll road. I seem to also remember that the party trash on the roadway caused it to be pretty slick, necessitating a bigger cleanup than was originally planned.

For all the doom and gloom, there were also some good times. 1986 produced...aside from a record number of foreclosures...the Rendezvous Houston concert noted in another thread, in April, the NBA Finals against the Boston Celtics in June, the US Olympic Festival, an Olympic tuneup event with over 3,000 athletes in August, the MLB All-Star game at the Dome in July, and the Astros versus the Mets in perhaps the greatest playoff series ever in October.

There was also a sort of camaraderie brought on by the oil and housing collapse. Whereas money and wealth causes isolation and self-centeredness, recession causes people to look to their friends and neighbors for what is really important. It was a very interesting time to live in Houston. In fact, the collapse is the foundation of the controlled excitement surrounding the current boom. Oldtimers know it could happen again.

[Subdude]

It was an interesting time. It is easy now to forget just how serious the situation was. Almost every large bank failed and had to be bailed out (Bank of the Southwest, Allied, TCB, First City, Interfirst, RepublicBank et al.). Dozens of construction projects were canceled. Not just oil, construction and banking, but lots of other industries were gutted as well. The Shamrock, Savoy, Sheraton, Towers, Plaza and Whitehall hotels all had to close. I had forgotten what rps324 pointed out how gentrification came grinding to a halt, but it certainly did. I had friends who lost bundles when they were stuck with rehab properties in the Heights after the market collapsed.

The rest of the country didn't seem to be terribly sympathetic. It was thought that we had benefited while the rest of the country was hurting in the 1970s, and that Texas was getting its comeuppance for being too arrogant and boastful during the boom years. There was a saying around at the time to the effect of "Lord please bring back the good times, and I promise not to blow it this time." Perhaps something to bear in mind today.

Love the picture of Bookstop. Ah, the 80s when there were useful shopping places in that center: Whole Foods, Butera's, Cactus.

I put that in because it was a big deal when the Alabama Bookstop opened! It was so cool and so big it just blew every other bookstore out of the water. Every store in that center was always packed.

[bmil128]

Yeah, I do. Details are fuzzy (I was in my 20s, afterall), but I remember a stage right in the middle of the toll road. I seem to also remember that the party trash on the roadway caused it to be pretty slick, necessitating a bigger cleanup than was originally planned.

For all the doom and gloom, there were also some good times. 1986 produced...aside from a record number of foreclosures...the Rendezvous Houston concert noted in another thread, in April, the NBA Finals against the Boston Celtics in June, the US Olympic Festival, an Olympic tuneup event with over 3,000 athletes in August, the MLB All-Star game at the Dome in July, and the Astros versus the Mets in perhaps the greatest playoff series ever in October.

There was also a sort of camaraderie brought on by the oil and housing collapse. Whereas money and wealth causes isolation and self-centeredness, recession causes people to look to their friends and neighbors for what is really important. It was a very interesting time to live in Houston. In fact, the collapse is the foundation of the controlled excitement surrounding the current boom. Oldtimers know it could happen again.

The Huey Lewis concert was on a Saturday in 1990; I remember because we went to Benihana on Westheimer from Spring that night for my birthday. The concert was just west of 45; the freeway was open west of there if I recall and was free for the first few days (this was back when you had to stop & pay whether w/ exact coins or at the booth & get change and the traffic was not that bad), I remember we made it all the way around to I-10 but I don't remember if it was open all the way to 59; I think that may have been the next day or so.

'86 was a good year here after all, this was before anyone in my family (namely me) worked in oil & gas. I got to carry the Olympic torch that summer about 3 feet down Cypresswood Dr. w/ my scout troop. My dad got to go the Astros' penant clinching Monday playoff game w/ the Dodgers too.

[RWB]

someone told me that when beltway 8 was completed (circa 87?) on the night or weekend it was finished the city threw a big party on the freeway and huey lewis and the news played. does anybody remember this?

I only bring this up because first it had to be awesome, and second I just saw huey lewis on a capitol fourth. still rockin.

I don't recall that, but I do recall that when they completed the section that ran from I-10 to 59, they opened it up a day early to bicyclists. My friiends and I all took a ride on it (quite taxing, due to a stiff, unimpeded wind that day) and then settled down for a mid-parkway concert by Joe "King" Carrasco. It was awesome.

[Fringe]

I don't recall that, but I do recall that when they completed the section that ran from I-10 to 59, they opened it up a day early to bicyclists. My friiends and I all took a ride on it (quite taxing, due to a stiff, unimpeded wind that day) and then settled down for a mid-parkway concert by Joe "King" Carrasco. It was awesome.

I seem to recall the Bangels playing at that event. I remember because my daughter wanted to go so bad.

[ADCS]

There was a saying around at the time to the effect of "Lord please bring back the good times, and I promise not to blow it this time." Perhaps something to bear in mind today.

I've always heard it as "Lord, please let it get back up to $40 a barrel, I swear I won't blow it this time"

Nowadays, we're (well, those of us not in the oil industry) all praying for it to get back DOWN to $60 a barrel!

[IronTiger]

In the late 1980s, Houston was riding the wave of big oil, but then in the late 1980s the price collapsed, taking the economy with it. But what happened? I can only tell that eleven banks closed (per Wikipedia), two large malls (Greenspoint and Town & Country) got into a tailspin that they never recovered from, and the closure of Sakowitz (related?)

Still, it's largely a blank (didn't College Station suffer too?) but I'd like to hear some more stuff about it...

Admins: if there is a topic for this, bump the topic by merging this post into it

[TheNiche]

The short of it is that OPEC stopped holding back on oil production, not only resulting in a collapse in the price of it but pulling out from under us an incentive to enhance production domestically and in non-OPEC countries. Shortly thereafter, there was a global financial crisis. Houston (and the greater part of Texas) lost a massive chunk of oil companies and then nearly all of its locally-owned banks. Think Detroit, but less permanent. The bleeding stopped when the war in the Persian Gulf ignited, but we only really got back on our feet in about 1993-1994.

It's similar to what we have today, except that the disruption in oil prices is widely expected to be more temporary.

[Mark F. Barnes]

And to the second part of your question, being from the area, 1987 was devastating to BCS. Hundreds of Oil based jobs vanished overnight, literally. About ten thousand people in Brazos County, lost their jobs. Banks closed all over town, things were tough. But as Niche said earlier, The oil crash was a mere ripple on the pond, as to what is going on now.

[Ross]

The oil bust was more like mid-80's. My Dad took a package in 1985 and retired. I was laid off in January 1985 and never did find a job. Went back to school, got my degree, and when I graduated in 1989, there were jobs again, in the oil industry.

[RedScare]

The oil bust was more like mid-80's. My Dad took a package in 1985 and retired. I was laid off in January 1985 and never did find a job. Went back to school, got my degree, and when I graduated in 1989, there were jobs again, in the oil industry.

The oil bust actually started in the Spring of 1982. I should know. All of my easily obtained job offers in the oil field were unceremoniously yanked. Despite dating a girl whose dad was a big shot in the industry, and applying to 100 oil and equipment companies, I got nada that summer. I ended up with a commercial electrical contractor in August 1982. The construction business cratered about a year later. I ended up in law school.

The real estate bust occurred a bit later, with the hardest hit coming in 1986. The oil bust softened everything up in the early 80s, but the S&L crisis actually had its own origins separate and apart from the oil bust. Similar to today, there was a lot of fraud within the real estate financing industry, and lots of bankers thinking the good times would never end, and that continually rising prices would cover all of the fraud. Like today, they didn't, and it didn't. Also, like today, the taxpayers bailed everyone out. Also like today, a Bush was involved. Several, in fact.

But in early '82 oil prices began falling, stagnating at about $27 in '85. Then the bottom dropped out, and prices fell precipitously, finally reaching $10 a barrel in January 1986.

With 70 percent of jobs in the Houston area depending directly or indirectly on the oil industry, the bust was in full flower. Construction all but came to a standstill, and some financial institutions failed, while others tightened credit.

Thousands were thrown out of work. In January 1983, unemployment in the six- county Houston metropolitan area rose to 9.1 percent, the highest among the state's largest metropolitan areas. Beaumont-Port Arthur was hit even harder, with a rate of 14.9 percent. The overall rate for Texas was 8.5 percent.

http://www.chron.com/disp/story.mpl/specia...rs/1074418.html

Edited March 16, 2009 by RedScare

[Mark F. Barnes]

In July 1986 the oil priced dropped to $9.85 per bbl, the impact was felt immediately, and by 1987, banks all over BCS were closing and changing hands, and like I said, 10,000 people in Brazos County lost their jobs. In 1985 Oil was still over $30 per bbl, and not too bad, 1981 was a peak time for Oil prices, near $40.00, and spending was pretty frivolous back then. In 1982 things started trending down, but the bottom fell out in July 1886. By 1987 Bass Boats and Harley's were for sale everywhere. Repo's were a dime a dozen. I was Expat at the time, and didn't feel it like a lot of the locals did then. I had a lot of friends that lost everything

[TheNiche]

It bears mention, that domestic oil companies had been fairly conservative in ramping up new supply to correspond with higher prices during the last several years. Exxon, for instance, had a lot of people scratching their heads as they maintained a long-term strategic plan for oil to be in the $35-$45 / bbl. range, but...here we are and they're still in reasonably good shape. There's not nearly as much excess production capacity as there had been by the end of the 80's because the causes of the runup then are very different from the causes of the more recent price runup. Unless the third world stops growing permanently as a result of the financial crisis--very unlikely--then global demand growth will kick in once more within several years and prices will start to rise again. Probably not to $140/bbl. anytime soon, but enough to justify further growth of the energy industry.

The real estate bust occurred a bit later, with the hardest hit coming in 1986. The oil bust softened everything up in the early 80s, but the S&L crisis actually had its own origins separate and apart from the oil bust. Similar to today, there was a lot of fraud within the real estate financing industry, and lots of bankers thinking the good times would never end, and that continually rising prices would cover all of the fraud. Like today, they didn't, and it didn't. Also, like today, the taxpayers bailed everyone out. Also like today, a Bush was involved. Several, in fact.

It also bears mention that although there was government intervention, the problems weren't nearly as severe. Real estate that ended up getting owned by the government was resold very quickly and efficiently to new owners that could turn distressed assets around and make money on them again. Investors are so skittish right now that transactional volumes have basically collapsed. Nothing is going on and prices aren't really coming down (in Texas). The market is stuck in disequilibrium.

Say Mark, have you got that same chart with an inflation adjustment?

Edited March 16, 2009 by TheNiche

[MadMax]

Real estate that ended up getting owned by the government was resold very quickly and efficiently to new owners that could turn distressed assets around and make money on them again. Investors are so skittish right now that transactional volumes have basically collapsed. Nothing is going on and prices aren't really coming down (in Texas). The market is stuck in disequilibrium.

"In Texas" being the operative words in this phrase. I can tell you absolutely distressed financial assets (many secured by real property) from around the country are being auctioned off like crazy at very low prices. They are finding buyers now. Many of the same people who made tons after the last downturn have positioned for the next wave of this stuff.

The S&L crisis is almost a mirror image of what we see going on in NY right now.....nearly every bank in Texas failed. I think Frost Bank was the lone survivor. This problem is to NY was the S&L crisis was to Texas. And eventually it spreads.

[ricco67]

Considering I just entered my teens and only was aware of the news and such, the thing that I was aware of in the early 80's and late 70's was the price of fuel going through the roof and how Detroit was finally starting to gear up for smaller cars. The first one of note (to me) was the Chrystler 'K' car. Additionally, I can recall about how they were looking at oil alternatives.

It was about this time OPEC opened up the valves and made those not very cost effective.

The thing that stuck with me the most is my dad getting laid off for almost the entire decade living off savings and managed to support our entire family with it.

Since then, I've been fairly miserly with my cash and live well within my means, which is helping me not sweat this little bump.

[Fringe]

My dad took a company offered early retirement package in the late 80's from Union Oil. I knew a lot of people in the business that had to change occupations. In Houston that era was a lot worse than the financial crisis we are seeing today. Maybe that's why people in Houston have such a ho-hum attitude about what's taking place now. We have seen a whole lot worse.

Edited March 16, 2009 by LunaticFringe

[IronTiger]

The oil bust actually started in the Spring of 1982. I should know. All of my easily obtained job offers in the oil field were unceremoniously yanked. Despite dating a girl whose dad was a big shot in the industry, and applying to 100 oil and equipment companies, I got nada that summer. I ended up with a commercial electrical contractor in August 1982. The construction business cratered about a year later. I ended up in law school.

The real estate bust occurred a bit later, with the hardest hit coming in 1986. The oil bust softened everything up in the early 80s, but the S&L crisis actually had its own origins separate and apart from the oil bust. Similar to today, there was a lot of fraud within the real estate financing industry, and lots of bankers thinking the good times would never end, and that continually rising prices would cover all of the fraud. Like today, they didn't, and it didn't. Also, like today, the taxpayers bailed everyone out. Also like today, a Bush was involved. Several, in fact.

http://www.chron.com/disp/story.mpl/specia...rs/1074418.html

I find it sad that you felt compelled to bring up the Bush family name in talking about oil crises.

Especially considering Bush was only vice president at that time.

[Fringe]

I find it sad that you felt compelled to bring up the Bush family name in talking about oil crises.

Especially considering Bush was only vice president at that time.

Everything was Bush's fault. You should know that by now. I think he's even being blamed for the Civil War.

[Mark F. Barnes]

I find it sad that you felt compelled to bring up the Bush family name in talking about oil crises.

Especially considering Bush was only vice president at that time.

Tiger, he's referring to the S&L Crisis and the Bush's not the Oil Crisis. Neil Bush was at the head of Silverado, that cost the taxpayers almost a billion and a half dollars. But it was just a drop in the bucket of all the failures going on, but his dad being V.P. at the time, made him a lightning rod for all the media fallout. Besides dad did pull a few strings to keep him out of prison.

[tamtagon]

Say Mark, have you got that same chart with an inflation adjustment?

That would be cool.

[marmer]

Considering I just entered my teens and only was aware of the news and such, the thing that I was aware of in the early 80's and late 70's was the price of fuel going through the roof and how Detroit was finally starting to gear up for smaller cars. The first one of note (to me) was the Chrystler 'K' car. Additionally, I can recall about how they were looking at oil alternatives.

It was about this time OPEC opened up the valves and made those not very cost effective.

The thing that stuck with me the most is my dad getting laid off for almost the entire decade living off savings and managed to support our entire family with it.

Since then, I've been fairly miserly with my cash and live well within my means, which is helping me not sweat this little bump.

I thought the early 80's, with the price of fuel going through the roof, was the oil boom in Houston, with lots and lots of new businesses, restaurants, charitable giving, building, etc.

Then, when OPEC opened up the valves, that's what led to the oil bust, about 1986 or so.

[Mark F. Barnes]

I thought the early 80's, with the price of fuel going through the roof, was the oil boom in Houston, with lots and lots of new businesses, restaurants, charitable giving, building, etc.

Then, when OPEC opened up the valves, that's what led to the oil bust, about 1986 or so.

That is exactly what happened!