From November 2004:
Usually I don't like to speak on issues that are already well-covered, but the economic position of the U.S. right now is a topic that cannot be spoken of enough. With real estate and talk of currency troubles (aka: interest rate watch), we are watching like hawks these issues. Builders all around many metro suburbs are speculating with relatively cheap money, and banks are loading their balance sheets with really shaky things like "100% loans" (like an ARM with a balloon payment/refi instead of an adjustment). It looks scary. Moreover, it can happen like dominoes -- one big entity makes a move, and everyone (foreign financiers of U.S. debt) starts second guessing.If only this stuff didn't matter. Again, there are many more factors now with which to analyze the situation than there were back in 2004, and there is plenty of reason to be hopeful, particularly in the strong Houston market area and economic sector. Locally here in N Houston Metro we have seen no notable decline in demand and continue to describe the specific Houston area as relatively balanced in supply and demand, as has been the case historically for many years.
[Update 11/24/2008: One year later, demand in the Houston area has definitely softened, with overall sales volume year-over-year in excess of 20%. The silver lining is that prices are holding relatively stable for now. But then we never had the pricing bubble that other areas of the country experienced.]