1976–1985: Low Energy

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Battered by an energy crisis, record inflation, and high interest rates, the housing industry came through this 10-year period bruised but not beaten. Baby boomers came of age in the '70s and '80s and began forming households, renting apartments and buying homes. As a result, 1978 marked an all-time high for yearly housing starts — 2,020,300.

January 01, 2007

 

Sidebars:

Professional Builder's Builders of the Year (1976 to 1985)

Decade at A Glance

Profile: 1984 Builder of the Year Nash Phillips of NPC

Battered by an energy crisis, record inflation, and high interest rates, the housing industry came through this 10-year period bruised but not beaten.

Baby boomers came of age in the '70s and '80s and began forming households, renting apartments and buying homes. As a result, 1978 marked the all-time high for yearly housing starts — 2,020,300 — a record that has not been broken.

New urbanism/traditional neighborhood development was introduced through Seaside, a beachfront project in Walton County, Fla., from developers Robert Davis and architects Andres Duany and Elizabeth Plater-Zyberk.

With the enactment of the Federal Manufactured Home Construction and Safety Standards of 1976, mobile homes become known as manufactured or "HUD Code" homes. Before then, the lack of regulatory oversight made the quality of these homes uncertain and prompted many local governments to restrict or ban their use.

Some of the largest housing Giants of this time were U.S. Home Corp., Centex, Lincoln Property Co., Kaufman & Broad (now KB Homes) and Pulte.

The '70s Oil Crises

 

The Arab Oil Embargo of 1973 cut the supply of oil to the United States and several other Western European countries and elevated prices to then record levels. Long gas lines were a common sight.

The harsh winter of 1976–77 brought high energy bills. President Jimmy Carter, who took office in 1977, declared the energy shortage "permanent" and created the U.S. Department of Energy to address ways of dealing with overdependence on Middle East oil and other energy problems.

From 1973 to the mid-1980s, oil prices stayed at very high levels, due in part to a second oil crisis in 1979–80 caused by the Iranian revolution and the reduced production that followed. American oil production was increased to reduce dependence on foreign oil and improve end-use efficiency. Energy efficient products for the home — HVACs, lighting, solar panels and the like — gained popularity, as did more energy-sound home design. PB even published a book, "Energy and the Builder."

'80s Inflation and High Interest Rates

The early '80s was a time of high inflation and record-breaking interest rates — as high as 21 percent. By 1981, the total number of housing starts had declined to almost half the number in 1978 (down to $1,084,200.00). The country experienced a deep recession in 1982. Unemployment was as high as 10 percent. Because of the difficulty home buyers had in affording a mortgage, the housing industry nearly collapsed. But by 1983, inflation had eased, the economy had rebounded, and the country began a sustained period of economic growth. A housing recovery began in 1983.

70th Anniversary Article Series

 

 

 

  • 1936-1945 Depression and War
  • 1946-1955 Driving Toward Profit
  • 1956-1965 Baby Boom
  • 1966-1975 A Revolution
  • 1976-1985 Low Energy
  • 1986-1995 Clearing the Fog
  • 1996-2006 The Big Boom

     

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    Professional Builder's Builders of the Year (1976 to 1985)

    1976 Bob Schmitt

    1977 George S. Writer, Jr.

    1978 Richard B. Smith

    1979 Guy Odom

    1980 Ray Ellison

    1981 None

    1982 William Lyon

    1983 Tawfig Khoury

    1984 Nash Phillips/Clyde Copus

    1985 John Crosland Jr.

    Average cost of a new home:

    1976: $43,400

    1977: $54,200

    1978: $62,500

    1979: $71,800

    1980: $76,300

    1981: $83,000

    1982: $83,900

    1983: $89,800

    1984: $97,600

    1985: $100,800

    Source: US Census Bureau-Mfg., Mining, Construction Statistics

    Decade at A Glance

    Total home closings

    1976: 646,000

    1977: 819,000

    1978: 817,000

    1979: 709,000

    1980: 545,000

    1981: 436,000

    1982: 412,000

    1983: 623,000

    1984: 639,000

    1985: 688,000

    Source: US Housing Market Conditions-Historical Data/HUD

    Profile: 1984 Builder of the Year Nash Phillips of NPC

    A huge chapter in the storied housing industry during this time was the success of Nash Phillips, founder with partner Clyde Copus (deceased), of Austin, Texas-based Nash Phillips/Copus. NPC was once the largest privately held home builder in America. The company built continuously until 1986 when it succumbed to the Texas housing market crash and become the largest bankruptcy in Texas history.

    Nash says he never got credit for taking home building from a local to a regional business; he operated in several Texas markets — San Antonio, Dallas, Houston, Lubbock, Odessa, Midland, and Amarillo. Nash says that as he expanded into other states like Tennessee and Georgia, "I had to be careful in my PR methods in order to not riffle too many feathers there."

    "The biggest challenge was always selling homes, making the deals," says Nash. "It was a more competitive market back then — a tougher sell. It's very different from the way the market has been over the last four years."

    Nash says FHA and VA loans were a godsend for potential home buyers but were met with suspicion by bankers. "At first, people in the real-estate business called VA loans a communist deal, because it's nothing down," he says. "But if we didn't have FHA and VA loans, I couldn't have done what I did."

    High interest rates in the early '80s made it nearly impossible for anyone to get a home loan. Nash says those rates killed his company, and he isn't shy about where he places at least part of the blame.

    "Jimmy Carter was the worst excuse for a president ever," he says.

    The octogenarian has had a very successful second act after founding Giant Wilshire Homes with Wes Phillips and son-in-law Ed Horne in 1991.

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