The Crash of 2008 & Our own kind of Boom
In 2008, Springfield, Ohio had crashed.
It is important to understand how Chris and his real estate company got to this point. Chris calls Springfield, Ohio the rusty buckle of America’s declining Rust Belt. The real estate downturn in Ohio was not as severe as Florida or Nevada – because the economy was weak to begin with. Their last good year was 2005, and the downturn really hit in June of 2006.
Springfield is in the Dayton metro market, but is mostly its own entity. It was once a manufacturing hub, but deteriorated in the 1970s and 1980s. Globalization and huge corporate mergers pushed Springfield into a rapid decline.
Chris was born in Springfield in 1961 and moved away to Corporate America for over 20 years. He returned with his family in late 2000 to witness the decline of the middle class as the best and brightest fled to other areas of the country.
Springfield had a boom too, sort of.
It began around 2003. And as the area lost jobs and population, the local housing market was driven up by the same forces that caused the famed housing bubble: easy access to cheap money.
Anybody with a job and decent credit could own their dream home – and make unwise investments too! The sales numbers at Chris’s RE/MAX office reported the early warning. In June of 2006, Chris saw his first ever year-over-year decline. June of 2006 was 16% below June of 2005!
As a former retail manager, Chris’s brokerage closely monitored his agents’ year-over-year numbers. And in August, the bottom fell out. Sales were just 50% of the previous August ending 2006 at 23% below 2005. 2007 was soft. And 2008 fell 20% below 2007. Things were not going well.
In 2016, the market finally returned to equilibrium. Supply and demand were more balanced at all price points, and the foreclosures that dominated the market through 2013 were mostly gone. The crash created tremendous financial opportunities for many of us, but it is impossible to deny the devastation wreaked on people’s lives.
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