Back-to-back recessions marked the beginning of the 1980s in America.  High inflation, combined with tight fiscal policy, the global energy crisis, high interest rates, and high unemployment caused financial misery for millions of Americans and for the real estate industry.  The American dream of homeownership became significantly less affordable. Buyers, no longer able to afford homes at high interest rates, were forced out of the market.  Business failures were at their highest levels since 1932.

Alabama was not immune.  In September 1982, Alabama had the nation’s second highest unemployment rate at 14.2 percent.

Mortgage interest rates in the 1980s couldn’t have been worse.  The weight of 17-18 percent interest rates caused a near collapse in existing home sales.  “From the peak of four million existing home sales in 1978, there was a 50 percent drop in home sales over the next four years,” according to the American Enterprise Institute.  It took almost 20 years for the market to return to 1978 levels of sales.

Homeowners and investors faced falling prices and declining property values.   Widespread loan defaults and the failure of financial institutions led the government to step in by passing the Economic Recovery Act in 1981.  The Act changed capital gains tax rules for real estate and expanded depreciation deductions.  From bust to boom, real estate quickly became an attractive tax shelter and investors – including foreign investors – poured in money.  Bank lending increased from $100 billion to $350 billion from 1980-89.  Commercial banks’ assets were heavily placed in real estate. In 1986, federal policy changed course with passage of the Tax Reform Act of 1986 which eliminated tax shelter advantages.

On October 19, 1987, the stock market fell more than 22 percent.  The day became known as Black Monday.  The real estate market was at a low point and the economy was deeply in a recession.

Amid all the gloom and doom, Alabama REALTORS® found a few bright spots.  The national and state associations grew and strengthened.  The National Association of REALTORS® incorporated into its trademarked “R” logo a tagline – “The Voice for Real Estate.”  In 1984, Alabama Association of REALTORS® members gathered in Nassau, Bahamas for the state convention.  The following year, Alabama REALTORS®’ very own David D. Roberts served as NAR President.

In 1986, the now ubiquitous cell phone first appeared in ads in AAR publications and the mobile revolution was born.  Only 340,000 Americans had cell phones in 1985, but three years later, Americans possessed two million devices.  None of them resembled the mini computers available today, but they quickly became essential to REALTORS® and other professions.

To learn more about the Association's history visit our Centennial Anniversary page here.