Why didn't Texas over build? Because, believe it or not, the industry (builders and lenders) learned lessons from the 1980s and didn't do the level of speculative building that other areas did.
Originally Posted by Whirlaway
Sorta true...a lot more has to do with home prices not rising in Texas as much as some of the more speculative markets. And part of the reason for that has to do with zoning and available land. DFW for example looks far different at its fringes than it did 20 years ago. There are areas in NE and W Fort Worth, McKinney, Frisco, Allen, Plano, Lewisville, Southlake, Mansfield, etc., that were large tracts of unused land or farm land. We had room to grow. The lack of room to grow is what drove prices higher in the northeast corridor of the US and the San Fran area. Constant demand for homes within commuting range of NY/SF/Boston/DC and no room to build.
Other areas, like Las Vegas suffered from a lack of diversity in their economy. That is the real lesson that Texas took from the 1980's. Houston was decimated because of the oil situation, and Texas was way too dependent on oil. As a result, there was a concerted effort to diversify and you can see it in the variety of corporations that have moved their headquarters here.
Phoenix and Miami were pure bubble-driven speculation. There weren't enough people to live in the homes that were being purchased, but as long as their were buyers, the builders would keep on building. Eventually, the greater fools wound up holding 10 homes that they thought they could flip, only the families that were actually moving to there had already found a place to live. Oops!