Yes, Texas was hard hit. However, some of that is attributable to change in legislation which pulled the rug out from under a lot of developers. This not only popped the bubble but added to the resultant downside. I don't remember the specifics on the legislation.
The Texas bust started out as energy related then Congress changed the rules in '86. Previously many types of real estate deals were treated favorably for income tax purposes. Basically you were taxed less so a smaller pre-tax return on investment wound up being a larger post-tax return on investment.
As a part of the (the name escapes me) tax reform bill Congress put an end to much of that. Well and good, ecept Congress didn't grandfather existing deals. Lots of real estate deals had been put together not because they made sense as real estate deals, but because they made sense as real estate deals given their tax advantages, which Congress had just taken away. Given the double whammy of regional recession and Congressionally caused recession you woulnd up with a collapse of prices, especailly in commercial real estate.
Thanks Pilsner. That matches my memory.
See post 74 for Pilsner's explanation of what happened in Texas.