Déjà vu all over again? Ironically, the Greater Nashville Association of Realtors released sales numbers on Tuesday citing that home sales are up 15 percent for July of 2011, as compared with July, 2010. This is the first unassisted rise in more than four years.

The government had enacted legislation providing first-time buyers various tax incentives in order to stimulate the market in late 2009 and 2010. Prior to that, real estate in the area had been in a freefall since the fall of 2007 (not a typo, 2007). Of course everything fell off the face of the earth in 2008.

So, here it is July and sales are up. What happens? Another mess. When the last mess occurred it had been awhile since things had been scary, really scary, as far back as 1980 and 1981 when interest rates were at 21 percent and mortgage rates were at 16 percent.

Then in the late 1980s, the savings and loans fell into disarray and caused prices to fall 25 percent. By the way, the savings and loan failure was due to 100 percent loans for overvalued properties. In 1991, things began to settle down, although the deficit grew and Bill Clinton told George H.W. Bush that his economic plan was so bad that our grandchildren’s grandchildren would never be able to pull the nation out of the hole. Within six years there was a surplus. What about this grandchildren’s grandchildren thing?

Then in the 2000s, the lending institutions resuscitated 100 percent loans on overvalued properties. Another collapse follows. It only took three years to recover from the grandchildren’s grandchildren problems in 1991. The collapse in 2007 seems to have taken four years. So if this is a semi-permanent crisis, it should take three to four years to recover.

The unsettling condition in this new recovery is that the extenuating situation must be rectified or neutralized, and the recovery must begin. If this is real, the recovery may not begin for another year.

Also of concern is the difference between what happened between incidents. Once things recovered in 1994, the nation experienced unprecedented growth for 13 years. When the real estate market crashed in 2007, the only casualties were those who had bought from 2004 and up, meaning that the others owned properties worth more than they paid for it. If this crisis grows, it could set the market back to 2002 or even earlier.

In that scenario, there would be few owners who bought in the last 10 years who would be able to sell their homes for the same prices that they paid for them. This is an extreme, unexpected shift as the aging could no longer sell their empty nests and count on those funds to assist in their retirements. These funds were formally supported by their Social Security. Remember Social Security? Merle Haggard should have been an economist as in his song Big City in 1981, he referred to “your so-called Social Security.”

So what to do? “You got to know when to hold them and know when to fold ‘em. Know when to walk away. Know when to run,” Don Schlitz wrote. What’s the difference in a Nashville resident and someone from somewhere else? Nashville people call The Gambler a Don Schlitz song. To everyone else, it’s a Kenny Rogers song.

As for real estate, no need to fold ‘em, no benefit in running. You might need to hold ‘em for a week or two. If interest rates continue at this low level, you definitely shouldn’t walk away.

•••

As this has segued into a music column, I heard a good line last week at a Beatles festival in Chicago. Peter Asher quoted Miles Davis. Davis had returned from a tour of England, Asher’s native land, and Asher asked him how it had gone. Davis said, “The British want to play R & B so badly … And they do.”

In this case, the United States Congress wants to legislate so badly … And it does.

Richard Courtney is a real estate broker with Pilkerton Realtors and the author of Come Together: The Business Wisdom of the Beatles, hence his trip to Chicago. He can be reached at [email protected].