The collapse of investment firm Lehman Brothers on September 15, 2008 was the catalyst that accelerated the collapse of the fragile and overextended U.S. housing market. Today marks the ten year anniversary of its bankruptcy filing.

One day after the 2008 filing, global financial markets plummeted.

Lehman was one of the first Wall Street firms to dabble in residential mortgage loan origination as early as 1997. With successive acquisitions of sub-prime (unfavorable credit) mortgage firms, Lehman grew into a subprime leviathan. It packaged the loans and misrepresented their creditworthiness to institutional buyers around the world.

The firms $600 billion in troubled assets began to show significant cracks in 2007.

Another global investment firm, Bear Stearns, began to come apart in March 2008. However, the Federal Reserve Bank of New York floated a $25 billion loan to prevent its closure. Lehman, the 4th largest U.S. investment firm at the time, received no such bailout. Unlike the Bear Stearns debacle, regulators were not going to throw a lifeline to Lehman.

At the apex of the housing crisis in Phoenix, one in ten homes sat vacant. Home values in far corners of the Valley, like Anthem, fell by as much as 50% from their 2006 peak prices. New home construction activity dried up and homebuilders closed their doors.

Fast forward. In May 2018, median home prices for Phoenix homes around the metro first reached, then surpassed, their 2006 peak. But that is more of a water-cooler talking point than a measure of lasting recovery. What’s encouraging for housing here is the strength of buyer demand across most price segments, broad availability of credit and loan types, unceasing rent escalation since 2012 and a strong local economy.

By almost all measures, real estate activity in the Valley is back to normal or better. Housing inventory has been tight in 2018, especially under $250,000. Homebuilders, dusting off from the recession, would build many more homes now if additional labor and land were available to meet demand.

Distressed property sales, like bank foreclosures and short sales, now comprise less than 1.3% of all MLS transactions. That is a welcome sign.

No one suggested Lehman deserved to be saved. But the argument has been made that the crisis might have been less severe if it had been saved, because Lehman’s failure created remarkable uncertainty in the market as investors became confused about the role of the government and whether it was picking winners and losers. – Andrew Ross Sorkin, financial journalist and co-anchor of CNBC’s Squawk Box