Home Prices..

[Karried]

Okay, I'm wondering what your opinions are regarding how dismally low our home price appreciation is compared to almost every other state except for Texas. I moved from CA two years ago and am trying so hard not to be discouraged at how little my house here has appreciated compared to what I would have made in profit in CA.

What do you think the market will do in the future - obviously we won't have huge drops in equity since home prices haven't appreciated as much as elsewhere - but what are your feelings on the future of real estate in OK? I'm in Real Estate so I track these things daily but I like to hear from the posters here because most of you are extremely intelligent and possess a large amount of business sense and are pretty savvy.

[Pete]

I hate to tell you, but as long as there are few restrictions on new development (and there doesn't seem to be any whatsoever) houses in the OKC area will continue to appreciate below the national rate.

Builders keep cranking out new houses far out of proportion to the population growth.

It's simple supply and demand -- way more houses than buyers.

[mrote]

It is a bit frustrating isn't it? Everyone talks about how low housing costs are here but the appreciation is equally low. We moved here from Kansas City, MO five years ago and there is quite a difference in appreciation, at least in our situation. KC isn't exactly a real estate hotspot but in the 9 years we owned our home there, we made a nice chunk of money on it. Right now the future of my emplyment isn't exactly looking to hot so we are beginning to look at other options. We've been in our present home for 4 years and even though we are in a nice neighborhood, I honestly don't think we will get out very much above break even on it.

Like Malibu Sooner said, when there is so much open (and relatively cheap) land to build on, it's often more economical for people to just buy a new home in a newer neighboorhood than to search for a pre-owned home.

[Karried]

mrwrote, It is soooo frustrating - we too are in an employment quandry because the job we originally moved here for has not lived up to our expectations by any means. It is really strange to buy a house and try to sell it and break even at best? I can relate so much to what you are saying, I can't even think about what kind of money we lost - it's so depressing ... what is your profession and where are you thinking of going?

[mranderson]

Before I left for California, I checked the value of my house. In the past year the value has gone from 80,000 to 115,000. I have no complaints, just surprise. The house looks bad on the outside, so, I expected maybe five or ten thousand tops. I just wonder how much it would have gone up if it looked like it should.

[Karried]

When I moved from CA two years ago, my house sold for 465K My neighbor just sold the same house for 700K.

That's really a bummer. Especially since we moved here for a job that was supposed to a wonderful opportunity which turned out to be such a nightmare joke.

[mrote]

I might be finding out sooner than I thought what our house will sell for. My wife has an onsite interview next week so depending on how that goes, our house will be on the market soon. Just for comparison, we moved from Blue Springs, MO (small city east of KC, about 50,000 pop.) about 5 years ago. We owned our home there for 5 years and we sold it in 2000 for around 50% more than we paid. Of course the average home price there is somewhat higher than here. I was exaggerating slightly (I hope!) about getting out at breakeven but I don't see getting a substantial return on it. Appraised value and actual sale price are often two different things. But then again, you do get a lot more house for $150,000 than you would get in the KC area. But I do miss having a basement!

Anyway, if my wife gets an offer on this position we will have to make a decision soon one way or another.

[mrote]

I missed the last part of your post Karrie. Depending on how things go, we are probably going back to MO. Specifically, the St. Louis area. I work in the chemistry field and my wife is a registered nurse. Bottom line, I work for a company who is spinning off or selling their chemical division and the futures a bit cloudy at this moment so we are keeping our options ope. We both have parents in MO who are getting up in years so this would put us closer to them but even being in OK is fairly close so that's not a big issue.

[Karried]

Mrwrote, I pm'd you so check your mail.... what do you like best about MO? We may be relocating but I'm thinking Texas possibly - not sure yet what to do!

[zuluwarrior0760]

It is true that Oklahoma experiences below average appreciation....

BUT:

California is absolutely FULL of people refinancing their homes to make
payments with their equity, meaning they never gain any real EQUITY at all....
This phenomenon is fueled by Mr. Fireman and Mrs. Schoolteacher having
to pay 650k for an average 3 bedroom house and then watching two years roll
by BREAKING THEIR BACK only to then finance 750k and use the equity for payments
on the new mortgage.........it's sad.....and then to boot they commute 2 hours to work
each way because the same house near their job sells for 1.1mil

Then you have Texas which has more comparable home prices to ours, but in many
areas their property taxes are triple or even FIVE TIMES as high as ours.....
so much for no state income tax........they've got it alright.......it's just in the form
of a property tax bill.....

My sister in law lives in Coppell, Texas and bought a 275k home and her property taxes last year were over 9K!

I just bought a 250k house in OKC and my property taxes are 2800.

SO:

Yes, California and Texas enjoy quicker appreciation, but we enjoy Nice homes
at cheap payments and for that, I'll take slower appreciation, because I plan
to die in this house.....

[Pete]

zulu, there are some people here in Cali that have done what you describe but there are many more that are millionaires due only to home appreciation.

I have several fireman in my neighborhood that bought before things skyrocketed and all of them and sitting on hundreds of thousands of equity.

If they so choose, they can sell and move somewhere else and retire at any time.

[okcpulse]

Karried, what job was this supposed to be and why did it fail your expectations? Please feel free to PM regarding this matter.

[zuluwarrior0760]

Agreed......

But it doesn't mean much to be a millionaire due to home appreciation
if you'd end up having to pick up and move out of the state to actually
see any of it.....

Also, where does this market leave a firefighter buying his FIRST home in
California....

The firefighters should come to Oklahoma City, make half the money,
pay a quarter as much for their home and then become a millionaire
selling Pez dispensers on ebay....

[Pete]

As you described, it's very easy to pull money out of a house without having to sell it. If you look around my neighborhood, it looks like a construction zone due to all the big home improvement projects.

Yes, it makes it more difficult to qualify for your first home, but you can usually work something out with creative financing. And once your'e in, it's darn nice to have 25-35% annual appreciation, especially when your home is already worth more than half a mil.


My family bought a home in OKC in 1963 and sold it in 1989. We added a pool and a big family room and the price only went from about $25K to $65K. Things are a little better there now, but appreciation rates are still below national averages and way below on in the longer term.

[windowphobe]

I bet if you'd sold it in 1982 it might have brought closer to $100k.

Seriously. I bought a house in 1979 for $40k and sold it in 1982 for $60k; it was sold again seven years later for less than half that.

Two words: oil bust.

[Pete]

Windowphobe, I'm sure you're right but even that amount of appreciation (from $25K to $100K in 26 years) only represents about a 5.5% annual rate, which is still pretty week, especially given the amount of improments invested and that this was a 'good' neighborhood.

In fact, oil bust aside, going from $65K to $100K in 6 years is only a 7% annual appreciation rate.

[windowphobe]

I'd rather have a steady 7 percent than a roller-coaster ride. Then again, I'm not planning to move any time in the next 28.5 years.

(The assessor says my place went up about 11 percent last year, which I attribute to other people in the neighborhood overpaying even more blatantly than I did.)

[Karried]

Windowphobe, you may be right.... in 1988 we bought our first condo at 88K, one bed, one bath 755 sq ft... sold it in 6 months for 122K... bought 1989 right after the huge earthquake 3 bed 2 bath, 1300 sq ft for 195K 45 min South of San Jose, from 89-99 it dropped and dropped in value.. hard to believe with all the recent uptick in values in CA. We sold in 99 for 179K. 10 years later! Bought 2500 sq ft for 259K Sold in 5 years for 465K. That was two years ago. Now the same house is worth close to 700K - but it just goes to show that it always doesn't go up in CA and what goes up ......

I'm thinking one good shaker (earthquake) and people will run for the great wide open states where no buildings or bridges will fall on them :-)

I'm also thinking Florida's home prices just may get a little stale with the new onslaught of hurricanes. Coastal trends will trickle inward but at a much slower and steadier pace. Maybe it will turn out that slow and steady wins the race?

[zuluwarrior0760]

There's an upside and downside to everything......
There is believe it or not an upside to your home only appreciating
modestly in OKC....and that is a guy across town selling a home
you want to buy is suffering the same plight, enabling you to buy THAT
home for 150k instead of 550k in the california sticks.....

Many think the bubble in California will burst when rates go up or
when the job market in California goes south....but in reality, it
will probably burst just from most average joes being plain priced
out of the market.....

Where is it going to leave Larry and Linda Average, who have
been using their equity to make their astronomical house payments
for the past few years when their home starts nosediving in value.....
it can and does and at some point WILL happen......history has
taught us that although appreciation has always been there, major
downturns do occur infrequently.....and they've usually been preceeded
by major booms in the real estate market followed by an economic event
that wreaked havoc on the jobs market in a given area....

How would you like to owe 600k on a 350k home?

Don't think it can happen?

Two Words previously mentioned:

Oil Bust

[Karried]

Two other words:

Irrational Exuberance

Earth Quake ( I know, I know :-) )

Tech Stocks

Silicon Valley

[dirtrider73068]

Well I have parents in Texas and like said before there property taxes are high compared to here. I have tried to get them here just the fact its a cheaper living house payments can be lower. But I have seen a 2 ned house sell for as much as 90K, how can a 2 bed house be worth that much thats crazy. The house market prices are going up but slow like what was said. If they want people to buy houses on the market why not try and get people to buy them make it easier to buy a house. I am more or less on a low income bracket and because if it I can not buy a simple 60K house cause my payment would be 600 or more a month. I can't afford that and any other low income family can't either so alot of us low income are forced to rent at a lower cost. The demand for house buyers I think in my opion is low so there for the house values are low trying to get the market to grow. Plus look at the taxes we have compared to other states, Texas for example I use to live there they have no state tax, no food tax, but look at where the make up for it at in, tobacco, gas, property value. So I would rahter have what I have now it could be worse and the state of oklahome could be taxed to death. I am proud of my state and proud of where I live. I like it how it is, its something i can afford and be happy at. I won't live anywhere else, it cost to dang much.