Oklahoma's real estate rebirth
Strong economy, jobs spell good news for Realtors
By Steve Bergsman, Friday, September 16, 2011.
During the 1930s, tens of thousands of Okies and other victims of the Dust Bowl left their farms in the center of the country and headed west to California to find work.
It’s time to come back.
Not only is Oklahoma thriving (personal income growth at 8 percent is the fifth best in the country), but unemployment is well below the national average, all sectors are showing job growth including construction, and the housing market is very healthy.
What turned my attention to Oklahoma was a report from Hanley Wood’s Housing Intelligence Pro that showed two of the state’s biggest cities were in the top five in median price growth at the start of the year.
The Oklahoma City median housing prices jumped 6 percent, while Tulsa sported a healthy leap of 5.6 percent. Only two Texas cities, San Antonio and Austin, and Cape Coral-Ft. Myers, Fla., looked better. The latter metro, one of the hardest-hit areas during the current recession, sported outsized numbers, up 19.6 percent, that was really a claw forward from near decimation of the market.
The salubrious numbers for Oklahoma are due to much finer stuff.
First, population growth: More than 50 of Oklahoma’s 77 counties grew in the last decade as overall population expanded by 8.7 percent to 3.75 million, according to Census Bureau data.
I asked Lisa Noon, CEO of the Oklahoma Association of Realtors (OAR), what was going on in her state and she quickly rattled off a series of highlights:
- State revenues were up 15.5 percent over last year.
- Oklahoma City ranked in the top 20 metro areas for strong economic performance. The city not only added 2,000 jobs in the oil and gas sector, but, surprisingly, since 2008, it gained 2,500 jobs in the tourism and hospitality sector.
- Double-digit growth in tax commission collections (a good sign of economic growth).
- Construction job growth near the top in the country.
- Statewide residential building permits doubled since the start of the year.
"We didn’t have any evidence of a housing bubble, so we had no aftermath," said Dan Rickman, a professor of economics at Oklahoma State University.
Up until the 1980s, Oklahoma’s economy was almost totally dependent on oil and gas, which had a huge bust-up early in that decade sending the state’s economy into a severe recession. Since then, the state has become much more diversified economically.
"We used to counter the U.S. cycle," Rickman explained. "Now we follow the rest of the nation, but energy is still important enough that it gives us a cushion. When the U.S. economy was heading into a recession in 2007, we enjoyed a big surge in energy prices."
Although the service, hospitality, medical, call center and manufacturing industries all have grown exponentially, the important thing about the energy industry is that "it’s a very high-income sector and that spills over into a lot of other areas of the economy," Rickman said.
Two major oil and gas companies, Chesapeake Energy Corp. and Devon Energy Corp., are based in Oklahoma City, with the latter currently constructing a 50-story headquarters building.
As can be expected, the biggest benefactor of the state’s healthy economy has been Oklahoma City, the capital, with a population in 2010 of 579,999, up 14.6 percent from 2000 (metro-area population of 1.25 million). That’s good news for the housing market.
"In June, our average home price was $163,600 and that’s down a little from May, which was $170,000, but in May we had several million-dollar home sales," reported Steve Mann, a broker/associate and auctioneer at Paradigm AdvantEdge Realty in Oklahoma City and president of the Oklahoma Metropolitan Association of Realtors.
"Our list-to-sell-price (ratio) is 97 percent and our average days on the market in June was 85. We had 9,000 listings in the metro area a year ago and we have 9,100 listings this year. And we still have new construction."
The city also hasn’t experienced a severe REO (real estate owned homes) problem.
"Up to this point, we haven’t had enough REO properties to affect pricing," said Chuck Harris, broker/manager with Century 21 All Pro Real Estate in Oklahoma City and a specialist in REO sales. "The market wasn’t flooded with REOs and we’ve been real fortunate as we’ve been able to turn most REO properties under 60 days. We are getting families as well as investors."
Regarding the foreclosures Oklahoma City has experienced, "we’ve been able to absorb and get them closed out," Harris said.
Oklahoma City hasn’t been the only beneficiary of the state’s economic well-being. Although Tulsa, the state’s second-largest city, lost a bit of population during the past decade, down 0.3 percent to 391,906 from 2000 to 2010, the city added 2,943 jobs since the first of 2010, mostly led by the manufacturing sector.
The city of Edmond, in the Oklahoma City exurbs, saw its population jump 19.2 percent from 2000 to 2010 to 81,405. According to OAR’s Noon, "the cost of living there is 8 percent below the national average."
Then there is the unique case of Ada, Okla., 88 miles southeast of Oklahoma City and with a population a tad over 17,000. According to Noon, the city’s jobless rate is so low it might actually be negative.
So far this year, Ada added 465 government jobs, 444 service positions, 398 manufacturing slots, and 333 new employees in oil and gas extraction, and filled 222 openings in accommodation and food service industries.
"A number of employers and entrepreneurs are doing extraordinarily well in that area of the state," said Noon.
Judging from the economy, it really looks like Oklahoma is OK, if not better.
Author’s note: Special to Inman News readers, you can purchase the "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis" e-book for $5.99 (a 25 percent discount off the list price) by entering discount code ZX59A at the following website: Smashwords.com/books/view/76878. Read a column about the book: "The birth of modern suburbia."
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.
Contact Steve Bergsman: Letter to the Editor
All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.