Part 2 book “Ten-Gallon economy” has contents: The evolution of texas banking, texas comparative advantage and manufacturing exports, so close to Mexico - economic spillovers along, border economic recovery lags rest of state, border and economic development, and other contents. | Part IV Industry and Exports 8 Texas Real Estate: From the 1980s’ Oil Bust to the Shale Oil Boom John V. Duca, Michael Weiss, and Elizabeth Organ Abstract: Texas’ oil-boom excesses in the 1980s created a residential and commercial real estate overhang that led to the collapse of the state’s banks. A restructured financial sector and renewed employment growth suggest a different outcome when the current shale energy expansion ebbs. Lord, give me one more oil boom and I promise not to screw it up this time. —Texas colloquialism Introduction Texas real estate trends over the past four decades reflect not only the pace of overall state economic growth—heavily influenced by energy market developments and other long-run factors such as low land development costs—but also the evolving structure of state banking and mortgage finance. Texas’ pace of job growth and housing construction normally exceeds national rates, indicative of long-term population and economic expansion in a land-abundant region and relatively lightly regulated business environment. During energy booms, Texas labor market activity accelerates from this already robust underlying trend, as do real estate construction and home prices. After the state economy shifted into high gear during the energy boom of the 1970s and early 1980s, it collapsed amid the oil bust of the mid-to-late 1980s, taking with it the real estate market and many financial institutions. That experience influenced the subsequent path of state banking reform and real estate laws. Texas enjoys stronger labor markets relative to the rest of the United States and, until recently, was in the midst of another energy boom—a product of relatively 110 JOHN V. DUCA, MICHAEL WEISS, AND ELIZABETH ORGAN high world energy prices and hydraulic fracturing technology that has allowed extraction of oil and gas trapped in shale rock formations. This growth has aided expansion of Texas’ real estate market, prompting analysis of how .
