OKC Real Estate Market

[OKCRealtor]

Yes Tik Tok is what it is (and I refuse to have one myself), but these are good very high level videos explaining why today's situation is "different." I can't find the best video I've seen that explains all the math at a pretty granular level (granted, I recognize this is all very high level and doesn't account for geography, etc.) but these do a decent job. Despite being a millennial, I historically agreed more with the POVs of some of what I'm assuming are members of older generations posting on here that it's largely a matter of prioritizing expenses and lifestyle, but my perspective has definitely changed. While, yes, it is possible for younger people to prioritize homeownership (and I'm in the privileged position to have done so), it is also true that it is materially harder for people of my generation to do so than in the past and the math bears this out (again, at a high level).

https://www.tiktok.com/@fmsmith319/v...377962?lang=en

https://www.tiktok.com/@fmsmith319/v...807790?lang=en

Millennials are 28-43 so I don't necessarily agree with that because things were pretty easy until 2-3 years ago so even mid-late 20 year olds had good opportunities. I'm also a millennial and for a decade we had arguably the easiest conditions to buy/own. No longer true after 2022 though to your point. We are at generationally low affordability since mid 22 and may not get much if any easier.

I would say it comes down to personal responsibility (or lack thereof). If you work hard and make good choices, you can own your own home. Yes, it may take some initial sacrifices, but it will be worth it long term.

100%

At any given point in time, it can be harder to buy a home, especially since we are coming off ridiculously low rates that lasted a long time.

Think 7% is high? Rates were at 10%+ from 1975 to 1990, and got as high as 18%.


It still doesn't change the fact that given any current economic situation, you have to save for a downpayment then be prepared to lower your expectations and put in some work so you can get your foot in the door, then all the various forces -- inflation, high rates, high home prices -- are canceled out because you are already in the market.

And if things in fact are increasingly hard on first-time homeowners, you can either complain or come up with a plan to get in ASAP because waiting on the sidelines always makes it worse.

So much this. I wish there was a way to make people understand that. Especially after the last few years, so many people chose to wait on conditions they were just certain would be more favorable only to now realize the very unfortunate reality.

There has been a lot of good information posted!

[Pete]

So much this. I wish there was a way to make people understand that. Especially after the last few years, so many people chose to wait on conditions they were just certain would be more favorable only to now realize the very unfortunate reality.

Show them this graph.

Prices do nothing but go up, with the only exception the once-in-a-lifetime 2008 mortgage mess. And even that didn't last long.

[OKCRealtor]

I probably should keep something like that in photo form I can easily message out or to include with a buyer presentation. Just like the stock market. It almost always seems the most expensive when you're buying unless it just happens to be one of the down turns and all the better if you can afford then but as you look back it was almost always the cheapest. The best time to buy was always a few years ago. As long as you stay in the market linearly for several years you'll be just fine & sometimes can turn around and make much quicker move ups that wouldn't have been possible before.

[OKCRealtor]

I guess it's never too early to start looking ahead.

Many people have been telling us they would wait until after the election/change was made to buy. Here we go!

Will be interesting to see what happens, most will feel more certain economically I think at least from a psychological point of view but will be surprised to see rates going even higher. Hopefully this is a temporary move but the bond markets are pricing in tariffs which is leading back to higher mortgages last few weeks as they anticipated the win.

One thing is certain though all this volatility right now is creating some opportunities for buyers! Once things stabilize/look better the deals won't be as good.

[kukblue1]

https://x.com/KobeissiLetter/status/1854175237530648640

[OKCRealtor]

^

Yea rent is a major problem compared to the numbers a few years ago, all the more reason to buy ASAP. It's hard to get stable financially until you have a homestead IMO.

Single family rentals are poised to do great for years to come, the demand is very high and should remain & prices have gone way up. I feel like we're about to see a lot more investor activity. I had a couple buyer inspections going on this morning & one of my regular guys is also a long time investor said he's planning to pick up at least 4 next year now and basically go on a buying spree.

[Rover]

I guess it's never too early to start looking ahead.

Many people have been telling us they would wait until after the election/change was made to buy. Here we go!

Will be interesting to see what happens, most will feel more certain economically I think at least from a psychological point of view but will be surprised to see rates going even higher. Hopefully this is a temporary move but the bond markets are pricing in tariffs which is leading back to higher mortgages last few weeks as they anticipated the win.

One thing is certain though all this volatility right now is creating some opportunities for buyers! Once things stabilize/look better the deals won't be as good.

And, regardless of interest rates, insurance rates will continue to escalate as coverage will be harder to get and rates higher due to escalating weather episodes. It is the total bill that matters.

[OKCRealtor]

^

No doubt, it's all only going to get more expensive from here.

[Laramie]

[gjl]

This house right down the street from me was a rental for quite a few years. The people renting it moved out about a month ago. It had a for rent sign in the yard for the last month and is now for sale. It is a perfect example of a starter house for $150K. Looks like it last sold in 3/2021 for $101K. Taxes on it last year were only $1436. In this neighborhood it will sell very fast.

https://www.zillow.com/homes/4301-N-...2036563_zpid/?

[ChrisHayes]

This house right down the street from me was a rental for quite a few years. The people renting it moved out about a month ago. It had a for rent sign in the yard for the last month and is now for sale. It is a perfect example of a starter house for $150K. Looks like it last sold in 3/2021 for $101K. Taxes on it last year were only $1436. In this neighborhood it will sell very fast.

https://www.zillow.com/homes/4301-N-...2036563_zpid/?

I'd like to see more houses this size built. Only change being a 2 car, vs 1 car garage. My house is 900 sq ft, plus a 2 car garage. I'd like something a bit bigger, but all told I'm getting by just fine. Many single people and married couples with no or 1/2 kids would get along just fine in a house this size. It would help out with affordability.

[Pete]

This house right down the street from me was a rental for quite a few years. The people renting it moved out about a month ago. It had a for rent sign in the yard for the last month and is now for sale. It is a perfect example of a starter house for $150K. Looks like it last sold in 3/2021 for $101K. Taxes on it last year were only $1436. In this neighborhood it will sell very fast.

https://www.zillow.com/homes/4301-N-...2036563_zpid/?

Funny coincidence: That house is 4301 N. Libby.

When my family first moved to OKC from Milwaukee in 1962, we rented 4309 N. Libby for a year (six of us in a 2-bedroom house) before buying right next to Rollingwood.

[gjl]

That house is on the corner of 42nd and Libby so it's a big corner lot too. . As you go north on Libby from that house the houses get smaller and are not brick but wood siding too. Plus it's Warr Acres and not OKC. The other side of 42nd st is OKC.

[gjl]

I'd like to see more houses this size built. Only change being a 2 car, vs 1 car garage. My house is 900 sq ft, plus a 2 car garage. I'd like something a bit bigger, but all told I'm getting by just fine. Many single people and married couples with no or 1/2 kids would get along just fine in a house this size. It would help out with affordability.

I think something around 14-1500 sq ft. 3 bedrooms, 1 3/4 bath 2 car garage should be built for starter homes.. But there is probably less money per unit to be made by builders for that size house. The problem with 1 car garage houses is you get a 1 car driveway and that is a problem with multiple cars. My first house I talked about earlier in this thread was just a few blocks from this house. It was 1160 sq ft 2 car garage and it would have been so much nicer with just a couple hundred more sq ft. That could have moved the washer and dryer hook ups from the garage to inside the house and made the kitchen/dining/living area a little bigger. I had to knock a wall out between the kitchen and liking area to make adequate room for a dining table.

[Teo9969]

This argument becomes increasingly interesting to me every year. I will make these points in favor of renting:

1. Substantially more important to your financial health in the long run than owning a home is increasing your income (and I'm a medium to long term sustainable manner). To this end, if you are only renting then picking up and moving location is much easier when renting. Now, if you have something anchoring you somewhere advantageous to ownership, this isn't an argument in your favor. BUT, the flexibility can't be overlooked for wage growth.

2. Renting is more dependable from a pure numbers perspective in most 3-5 year periods. You can count on it increasing a decent amount between 5-10 years. Again, flexibility and short term benefits can't be overlooked.

3. Depending on COL in your area, the savings on rent vs. ownership can tilt heavily in favor of renting and, if you are anchored to such an area, renting forever may make the most sense.

I kind of see the math like this:

Consider, Interest + Taxes + Insurance (ITI) --vs.-- Rent

If ITI is ≤110% of rent, it's exponentially harder to justify renting if that ratio starts dropping under 92% (think closing costs against a quick sale). Up to 110% is potentially over leveraged, but likely corrects itself within 5 years.

If ITI is way higher than Rent (say, 125%+), the ownership starts to become questionable. You could always reinvest the difference in the stock market and likely make some serious returns that likely well outpace real estate.

[cinnamonjock]

For most situations, owning does actually end up being cheaper than renting--especially if you're over one bedroom. When was the last time renting actually cost less than a mortgage payment? Seems like I remember rentals used to be bought either with cash or heavy down payments, but now it seems like most rentals have full mortgages on them, so landlords need to charge the entire mortgage payment, plus upkeep and profit.

[OKCRealtor]

In most scenarios it's cheaper to buy vs rent regardless of the rates & payments so long as you're going to stay I'll just say a minimum of 2-3 years to break even. Sometimes it's quicker than that but anything beyond and your usually making a profit. I can trace back my 15 years of ownership to even 5 year blocks and it's staggering the difference in net worth vs renting even when I first started out. Now I can connect the dots back & know I recoup about $1500/mo long term of mortgage payment looking back at both realized & unrealized gains from sale/equity appreciation.

[VeggieMeat]

For most situations, owning does actually end up being cheaper than renting--especially if you're over one bedroom. When was the last time renting actually cost less than a mortgage payment? Seems like I remember rentals used to be bought either with cash or heavy down payments, but now it seems like most rentals have full mortgages on them, so landlords need to charge the entire mortgage payment, plus upkeep and profit.

My current rent on my domicile is ~60% of what a 30 year fixed would likely be, but my landlord isn't all levered up.

[Teo9969]

In OKC no doubt owning is cheaper than renting. Do unless you're leaving in the next 5 years, probably worth buying...this was ESPECIALLY true before the oandemic

[OKCRealtor]

Yea it wasn't even close pre-pandemic, the monthly mortgage payments were often times cheaper than renting and that's before even taking into consideration the massive amount of other benefits that come along with owning.

It's been more difficult since '22 when you look at the monthly payments but it's still cheaper than renting long term. Rent prices went way up along with home prices so that missed equity + paying down mortgage is still cheaper than the alternative. I highly doubt most people are taking any savings difference & investing for the the long term to beat housing.

[Pete]

Who on earth has ever put aside hundreds of thousands in savings by renting??

Yet, almost everyone I know has that sort of equity in their home.


A home is like a forced savings account. Even if the costs are higher in the short term (which is arguable, outside a down payment), you always have something significant to show for all those years of payments.

Show me someone who has a decent amount of assets and I'll show you a homeowner and probably someone who owns additional property as well.

[OKCRealtor]

^

Exactly, it’s financial discipline more than anything. There are no other options once you become a homeowner, at least that’s how I’ve always looked at it. The whole cost comparison vs renting really is silly given the true cost of not owning for anything other than a short duration.

[Pete]

When you rent, you are totally at the mercy of what a landlord charges, which is ever-escalating.

As opposed to entering into a 30-year fixed mortgage rate and you can even refi if rates become more favorable. And the argument about rising insurance rates is silly. Again, the landlord is just going to pass that cost on to a renter. As a homeowner, you can shop around, change your coverages, etc.

It's the same with property taxes. Your increases are capped as a homeowner unless you buy a new place. But if your landlord sells -- which they often do -- then renters are going to pay for the big jump in taxes.


For the life of me, I don't understand how anyone can think there is a financial advantage to renting vs. owning unless you plan to move every couple of years for the rest of your life.

[gjl]

Plus as a homeowner you can improve your living conditions like remodeling a kitchen or bathroom. Any improvements just add to the value and your equity in the property. That is hard to do in a rental. My first house I removed a wall to make the house better. The house I described above went from 101K to 150K in 3 1/2 years. That is a lot of wealth accumulation in a relative short time.

[Pete]

Even the argument that renters "can just call the landlord" if they have a problem is laughable.

First of all, you have to call someone else, hope they care enough to do something about your issue, hope they get to it in a reasonable amount of time, and then you just accept whatever resolution they decide upon.

Anybody who knows how to use Youtube can figure out most minor repair projects, and get it done to your satisfaction in a flash. Or at the very least, hire someone who is paid to perform a service *to you*.

And BTW, unless you are renting an apartment (which almost always means people above, below, next or all of these), renting a home comes with just as many issues, just less control.

In all my years of ownership, I can't think of one significant repair of any type. Maybe a clogged drain. Never a roof, or big plumbing problem, or anything of any real cost.

The money I've put into my properties has been for improvements, not repairs. And generally speaking, that is yet another investment.