OKC Metro Housing Values Defying The National Trends

[OKCHomeBuilders]

For complete information, visit www.DefyTheTrends.com

Oklahoma City Housing Values Defying the National Trends
Oklahoma’s numbers are steady despite what the national media is reporting

For Immediate Release

Contact: Melissa Richey, Public Relations Director, Mason and Moon Advertising
405.607.6226

Oklahoma City, OK – The mortgage flu has hit the nation with an epidemic of housing foreclosures weakening real estate markets nationwide. Due to the extensive national media coverage, you probably believe Oklahoma couldn’t be far behind the national trends. However, that is far from the truth. That’s why the Central Oklahoma Home Builders Association, Inc. invites you to learn how Oklahoma City is DEFYING THE TRENDS.

“There’s something to be said for a slower pace of life in Oklahoma. And there’s a lot to be said for a housing market that has been protected from much of the housing value hit reported around the nation. Oklahoma City real estate is making it through the national real estate recession with little damage,” says Jim McWhirter, COHBA President.

The Oklahoma City Metro is among the few markets in the country still enjoying consistent gains in home values, and mortgage rates are at near all time lows. Combine those factors with strong job growth, a strong local economy, and low cost of living, and it’s obvious that Oklahoma City is DEFYING THE NATIONAL TRENDS.

ECONOMY
Oklahoma’s economic forecast is one of the few bright spots in the nation. Basking in this sun has enabled Oklahoma’s housing market to become one of the strongest in the nation.

VALUES
Oklahoma is no longer just a state where “values” means friendliness and moral character. Today, our local real estate market continues to appreciate while the majority of the country is, shall we say, losing sight of its values.

MORTGAGE
Because only 5% of Oklahoma’s mortgages were subprime loans, our state has not had to deal with the mortgage woes elsewhere in the nation. And because Oklahoma has a network of local lenders ready to help you every step of the way, it’s amazingly easy to find the right program for you.

ENERGY
Surely you want to save money on utility bills, and you probably wouldn’t mind saving the environment. With the help of an Oklahoma homebuilder, you can actually do both at the same time. There are several options available to make a new home energy efficient.

TIMING
Everything about Oklahoma’s housing market points to one thing – there has never been a better time to buy a new home. Time is money, after all, and the sooner you make the move, the sooner you’ll find out that homeownership is the single largest creator of wealth in America.

“With all the negative hype in the media about housing values falling around the country, it’s no wonder many are skeptical about whether or not now is a good time to buy a new home. The fact is, in Oklahoma, the timing to buy a new home really has never been better,” says Jeff Click, First Vice President, COHBA.

The Central Oklahoma Home Builders Association, Inc. invites you to separate fact from fiction when it comes to the local housing market. An Oklahoma City housing expert can be made available for live radio and TV interviews, as well as any print interviews. Please visit www.DefyTheTrends.com to learn more about how Oklahoma City is making headlines.

The Central Oklahoma Home Builders Association, Inc. is a not-for-profit, professional trade organization, which is an advocate for the Oklahoma City housing industry and serves 1400 members. The association is a corporate channel through which builders contribute time, money and services to local community service projects and education initiatives.

The Central Oklahoma Home Builders Association, Inc. is an affiliate of the Oklahoma State Home Builders Association, a federation of more than 12 associations statewide with more than 3,000 members, and the National Association of Home Builders. The Central Oklahoma Home Builders Association, Inc. members include builders, remodelers, developers, suppliers, manufacturers, architects, engineers, real estate brokers, lenders, attorneys and other industry professionals.

For more information on The Central Oklahoma Home Builders Association, visit www.OKCHomeBuilders.com. Or if you would like to learn more about how Oklahoma City is defying the trends, visit www.DefyTheTrends.com.

[Steve]

Pete, I think your web site is getting noticed.

[Blazerfan11]

I was at Panara yesterday and saw a big "defy the trends" poster @ Stewart Abstract. Nice touch! I like it.

[Blazerfan11]

"MORTGAGE
Because only 5% of Oklahoma’s mortgages were subprime loans, our state has not had to deal with the mortgage woes elsewhere in the nation. And because Oklahoma has a network of local lenders ready to help you every step of the way, it’s amazingly easy to find the right program for you."


What are some of the other states figures? Does anyone know??? If it's a lot more I think this is a really fine point. Also who are the local lenders?

[Blazerfan11]

this "subprime primer" is cute and educational. Glad we aren't as much to blame for all of this as are the fancy, sophisticated east coast folks!

subprime works - Google Docs

[Karried]

It's not pretty that's for sure.. I've been following this blog daily for about 4 years.. got to watch the house I sold in CA appreciate like crazy ( kicked myself) and then got to watch the market stabilize, then pretty much stagnate and now close to crashing altogether. I have two stories of friends who are losing their homes to Foreclosure - both highly educated, high wage earning families. It's a horrible shame - they now are losing everything they have worked so hard for so many years.

The banks aren't even trying to work with them.

Housing Crash Continues, Bubble Pops

[Karried]

Dallas-Fort Worth home foreclosure postings rise 40% | Dallas Morning News | News for Dallas, Texas | Dallas Business News

One thing to keep in mind is that the Homebuilders (just like the Realtors) will put a positive spin on it to sell homes so you still have to be cautious when making the most significant purchase of your life.

Things to NOT believe when your Lender says this:

1) You can get an ARM or Interest Only loan with a low teaser/starter rate and when it adjusts to a higher rate, you can then refinance!

Because of course, Real Estate ALWAYS goes up ( no it doesn't) what goes up can come crashing down.

So, with lenders tightening their standards, it's not so easy to get a loan with a great interest rate. All it takes is a job loss or health issue or anything unexpected to set you on a track that you can't get off of. Once you start missing payments - there goes your credit and with penalties and late charges, it won't be long before there is no way to make these payments and you might lose your house.

I'm not trying to be too pessimistic because I've long thought that we've been insulated here in OKC. And if you've done your homework, it might be a good time to buy in your particular situation.

But, I strongly advocate caution and getting educated on what you are signing and purchasing.

[jclick]

Blazerfan,

See this recent article from The Oklahoman by Richard Mize, which includes several direct sources on the stats:

Subprime time National news skews local views | NewsOK.com

There are a number of local lenders who are members of COHBA (sponsors of the Defy Trends Campaign). I'll disclaim that it's our intent to help promote those in the mortgage business who are among our membership, but there are many great lenders who aren't a part of our association.

You can locate an extensive list of those who are COHBA members by going here and selecting the "Mortgage Banker" and "Mortgage Companies" categories:

Welcome to the Central Oklahoma Home Builders Association

[Blazerfan11]

Thanks j, but that article doesn't answer any of my questions. I'll do some googling and see if the numbers are worth boasting about.... can't imagine they aren't but it's worth looking at. Mason and Moon in the past has said things like smacking gum is glamorous, so I wan't to hold them under the microscope a little bit with something this important....

[jclick]

Thanks j, but that article doesn't answer any of my questions.

Blazerfan11,

Now that I look back, I did fail to address the question. I don't have an immediate link to a report that provides this data in a table-like format. However, National Association Of Home Builders (NAHB) publishes frequent reports that cite data of significance. Here is an interesting excerpt on some of the more notable areas impacted by subprime, ARM resets, and foreclosures.

...California, Nevada, Arizona and Florida are at the epicenter of this problem, with California and Florida alone accounting for 30 percent of all foreclosure starts in the U.S, according to the Mortgage Bankers Association. The two states also account for 36 percent of subprime ARM foreclosure starts nationwide. Nationally, 83 percent of subprime borrowers with ARMs are still paying on time every month.

It is these areas which coincidentally make up a great deal of the "index" by which the vitality of the housing market is generalized on a nation-wide scale. I elaborate on that on OKMET, and this touches on the fundamental basis of why we're engaging in this campaign.

If I can locate a more comprehensive data table that better addresses your question, I'll be sure to post it here.

[Karried]

There's really not a lot of data for 2008 but I found this regarding Texas. It gives us an idea of the region, but I'm still searching for subprime stats for OK.



Financial Strain (Texas)

While not riding the boom-and-bust cycle seen in other parts of the country, the state’s homeowners are feeling financial strain. Per capita income in Texas is below the U.S. average, and the state is home to some of the country’s lowest-income counties. Many residents are particularly hard hit by high food and energy costs.

Mortgage debt is becoming a burden for some Texans—more than for people in many other parts of the country.

In other states, rapidly rising home prices helped homeowners refinance or extract home equity to relieve financial pressures. Because Texas home prices didn’t increase much, the state’s homeowners built relatively little equity, leaving many with a thin financial cushion.[5]

Moreover, the percentage of higher-priced mortgage loans issued in Texas has been above average compared with other states.[6] In Texas’ metropolitan statistical areas (MSAs), 30 percent of loans originated in 2006 were considered higher-priced—at least 3 percentage points above prevailing mortgage rates or the Treasury security of equivalent duration.

This figure exceeded the percentages in most of the nation’s 12 largest metro areas.[7]
Higher-priced loans were heavily used in several of the state’s MSAs, particularly along the Texas–Mexico border (see map). The highest percentage was in McAllen–Edinburg–Mission, where such loans accounted for over half of the lending.

Percentage of 2006 Mortgage Originations That Were High-CostAtlanta

24.4

Boston

17.7

Chicago

27.2

Dallas

29.4

Detroit

37.2

Houston

33.9

Los Angeles

32.3

Miami

45.1

New York City

22.4

Philadelphia

18.4

San Francisco

22.4

Washington, D.C.

22.7

[PennyQuilts]

Just closed on a house in Oklahoma, this week. It was a short sale and the seller was dodging forclosure. Absentee landlord living out in California. I don't know if he got caught in the housing crunch or what. All I know is that the house seemed to be a steal and the bank wanted it off the books. I was surprised that we didn't get more competition for the house but that may be because I'm used to the East Coast market.

From what I've read, Oklahoma has been weathering the current economic storm quite well. That is a switch, eh?

[adaniel]

There's really not a lot of data for 2008 but I found this regarding Texas. It gives us an idea of the region, but I'm still searching for subprime stats for OK.



Financial Strain (Texas)

While not riding the boom-and-bust cycle seen in other parts of the country, the state’s homeowners are feeling financial strain. Per capita income in Texas is below the U.S. average, and the state is home to some of the country’s lowest-income counties. Many residents are particularly hard hit by high food and energy costs.

Mortgage debt is becoming a burden for some Texans—more than for people in many other parts of the country.

In other states, rapidly rising home prices helped homeowners refinance or extract home equity to relieve financial pressures. Because Texas home prices didn’t increase much, the state’s homeowners built relatively little equity, leaving many with a thin financial cushion.[5]

Moreover, the percentage of higher-priced mortgage loans issued in Texas has been above average compared with other states.[6] In Texas’ metropolitan statistical areas (MSAs), 30 percent of loans originated in 2006 were considered higher-priced—at least 3 percentage points above prevailing mortgage rates or the Treasury security of equivalent duration.

This figure exceeded the percentages in most of the nation’s 12 largest metro areas.[7]
Higher-priced loans were heavily used in several of the state’s MSAs, particularly along the Texas–Mexico border (see map). The highest percentage was in McAllen–Edinburg–Mission, where such loans accounted for over half of the lending.

Karried,
Unfortunately this is pretty accurate of the Texas home market. My parents are tryig to sell their home in Plano and are having a horrible time doing so. That doesn't surprise me that mortgage costs are higher; Texas citizens have the lowest average credit score in the nation. I guess people down there like their Neiman Marcus and Galleria shopping sprees a little too much! And there is an attitude down there that good fiscal responsibility is not a big deal. Its always bothered me about that place, with its materialistic culture. I'm seriously shocked when I go home and see all of these commercials advertising Hummers and Jaguars to people with bad or no credit. And they're usually pitched by famous local celebs, like Deion Sanders. You would think these people would have a little more shame then to peddle such a thing to people that can't handle it. I guess not. So yeah, it probably wouldn't be such a stretch for the same financial companies to loan out mortgages to people with credit in the dumpster. I know these things exists in Oklahoma, but the level at which they thrive in TX is saddening. I wouldn't be surprised that they start eying the market north of the Red River with the Texas market now more or less tapped out.

Also it doesn't surprise me that homes in TX have almost zero appreciation (in fact, I think OK has slightly higher appreciation although its not all that high to begin with). I can't speak for the rest of the state, but the Dallas Forth Worth area is about to face the consequences of a 10 year binge of new homes. As many people are moving to this area, I can't help but to think that there has been a serious oversupply of homes here. You can say the same about OKC, but OKC doesn't have the multitude of national homebuilders that DFW has. A market like OKC, which consists of many mom and pop homebuilders just doesn't have the capacity to throw up houses like they can in DFW. And I can personally say the quality of homes put out by national corporations just does not compare to a local homebuilder here.

I think a lot of people on here point to DFW as what OKC should be like, but housing is not one of them. I hope builders here look to that area to see the lessons the builders down there are learning the hard way (throwing up houses and giving them out like there going out of style) because OKC is not above having the same issues here.

[Karried]

Good observations. Let's hope we stay a little sane here in OK!

I really feel for people who thought that they were millionaires just a short while ago based on perceived wealth in their homes... and now are struggling just to stay afloat.

Unfortunately, those were elevated and false values, all on paper. Too many people used their homes as ATM's and are now facing dire consequences.

You know, it's funny, for the last few years, I've been wondering if I had made a horrible mistake by selling my home in CA and moving here where the appreciation hovered around 5-8% annually... ( this after watching the value of our previous home skyrocket right after we moved!) but now, I feel a little vindicated with our decision because we aren't in danger of losing our home or struggling like lots of our friends in CA who overextended themselves, used their equity that they didn't really have and spent money on cars and items thinking they had much more money in their homes than they do now. I might have fallen into the same trap had I stayed there.... it's very easy to do. Now, I'm just hoping that the market here remains stable.

[jclick]

Karried,
As many people are moving to this area, I can't help but to think that there has been a serious oversupply of homes here. You can say the same about OKC, but OKC doesn't have the multitude of national homebuilders that DFW has. A market like OKC, which consists of many mom and pop homebuilders just doesn't have the capacity to throw up houses like they can in DFW. And I can personally say the quality of homes put out by national corporations just does not compare to a local homebuilder here.

Adaniel,

I'm glad to see you recognize some qualitative differences here in OKC.

The only true national builder here is DR Horton. Historically, the national companies who have attempted to gain a foothold in the OKC housing market have failed due to slimmer margins here, along with what I believe to be a true desire among the buying public to be dealing with someone locally, and keeping their dollars within our community.

As for current supply, I think calling it a serious oversupply is overstating it. We're hovering around a 6-month supply, when it's typically been around 4 months historically. That's still a good statistic, considering what some of the major markets are dealing with. Experienced builders in Oklahoma haven't (and shouldn't) forgotten the 80s.

[Oh GAWD the Smell!]

Well, the neighborhoods that were growing like weeds around me came to a screeching halt in construction about 6 months ago. The few that were completed look funny sitting on empty streets by themselves...And they're WAY overpriced. At least I hope they're overpriced.

[dismayed]

Things are better here than most everywhere else, but that doesn't mean that things are fine here. High end houses are staying on the market a long, long time. Appreciation is positive but in this range it is close to zero. Lots of houses are going up for sale in these neighborhoods. Since it's a buyers market I can only assume that this indicates some underlying problems in that segment of the market....

[solitude]

Oklahoma City has always had low median home prices, therefore, less need for subprime loans. No? There are not the kind of jobs in the metro that people flock here and buy homes for. Compare that with Plano, Frisco and all of Collin County and North Dallas. Higher demand for homes=higher prices=more subprime mortgage loans.

[adaniel]

As for current supply, I think calling it a serious oversupply is overstating it. We're hovering around a 6-month supply, when it's typically been around 4 months historically. That's still a good statistic, considering what some of the major markets are dealing with. Experienced builders in Oklahoma haven't (and shouldn't) forgotten the 80s.

Actually, I should clarify myself. I meant that DFW has a serious oversupply of new homes, not OKC. I got "here" and "there" mixed up since I consider both my homes.
I'm glad to see that builders here in OKC have played it conservatively, and a six month supply of homes is a slowdown but not bad. A close family friend of ours builds homes in NW Arkansas and the inventory level there is close to 36-40 months. And this is an area that is adding jobs hand in foot. He himself is very close to declaring Chapter 11. Very sad.

Oklahoma City has always had low median home prices, therefore, less need for subprime loans. No? There are not the kind of jobs in the metro that people flock here and buy homes for. Compare that with Plano, Frisco and all of Collin County and North Dallas. Higher demand for homes=higher prices=more subprime mortgage loans.

Not necessarily. In Collin County, new homes average about 275-300k for a 3500 square foot home with some landscaping. In fact, homes there tend to be cheaper as builders in that area really squeeze on the lot size. I will tell you this however, the quality of homes in Plano/Frisco/Allen area is lacking BADLY. WE had our home built by a national builder and we've had problems with it ever since. The lines on the molded ceilings don't even line up! I'm always jealous of my uncle's new home in Edmond, which has considerably more work done in it than ours.

As far as the jobs link is concerned, I think it is rather weak, which only adds to the lunacy that was this country's housing bubble. DFW and Atlanta all added more jobs than LA or Miami, but the housing prices in the latter two were considerably more. Which is what I don't understand. How could prices in states like California soar like they did when 1+ million people left that state just this decade?

[Blazerfan11]

ok after some thought, I think "defied the trends" would be more accurate. OKC defied the trends because we were free from a lot of the non-sense. Hopefully this campaign isn't created to encourage people to go beyond there means, but I suspect that is it's intent.

[veritas]

Oklahoma City never got too hot or too cold during the housing boom and, thusly, isn't it a bad position. 40 year average home value increases in this area were in the 5%-6% per year. At the hight of the housing boom OKC never got much above 8% per year in increases.

Building permits are down a bit but nothing to worry about.

/least I can get drainage plans reviewed by the City in a timely manner now

[Karried]

How could prices in states like California soar like they did when 1+ million people left that state just this decade?

Greed.

A lot of speculative investors buying homes in the hopes of flipping for a profit.

I have a lot of friends whose neighbors have multiple families sharing a single residence home. People are still coming though.

The Bay Area is highly saturated with immigrants from everywhere .. all wanting the American dream and for many people, homeownership is their number one priority.

Unfortunately, many lenders took advantage of that and got them into horrible loans that are now adjusting to levels that they can't maintain..

Cycle started a few years ago, listings saturated the market, homes weren't selling, people couldn't make the payments, foreclosures, bank sales brought down the value finally equalling lower prices.

[Blazerfan11]

interesting!

[Karried]

blazerfan11,

I found this site and there are a few different maps to click on.. you can find some Subprime/Foreclosure info on other states:

WSJ.com

[Karried]

Here we go....

Mish's Global Economic Trend Analysis: Dynamic Maps of Nonprime Mortgage Conditions