Lennar Homes coming to OKC

[Midtowner]

These are some small lots! 30 foot wide lots. 3000 sq ft lots

These smaller homes on tiny lots are selling like hotcakes at outrageous prices compared to older homes. We thought when we bought in July of last year that we were getting hosed on the price (but did great on the sale of our former home). It's like the market said "hold my beer."

The market is inevitably headed towards a correction. I'm concerned that buyers in divisions like this are never going to realize dollar one of equity once that correction takes place. And of course, long term, I would expect that the lack in equity will lead to deferred maintenance, foreclosures and blight in these neighborhoods. Hate to be so negative, but I just can't see a 30-foot wide lot home holding its $300K value in a downturn in the housing market.

[OKC Guy]

These smaller homes on tiny lots are selling like hotcakes at outrageous prices compared to older homes. We thought when we bought in July of last year that we were getting hosed on the price (but did great on the sale of our former home). It's like the market said "hold my beer."

The market is inevitably headed towards a correction. I'm concerned that buyers in divisions like this are never going to realize dollar one of equity once that correction takes place. And of course, long term, I would expect that the lack in equity will lead to deferred maintenance, foreclosures and blight in these neighborhoods. Hate to be so negative, but I just can't see a 30-foot wide lot home holding its $300K value in a downturn in the housing market.

January new home sales weaker, -4.5% vs. -1.2% est. & +12% in prior month (rev up from +11.9%); median sales price +13.4% y/y to $423,300 … at current sales pace, it would take 6.1 months to exhaust supply of homes, up from 3.6 months a year ago

This is national info and metro areas will vary but I see the start of slowdown. Inflation eats at income needed to buy houses and most are losing that battle even with good pay wage increases inflation is running way higher so its a net loss.

[OKCRealtor]

January new home sales weaker, -4.5% vs. -1.2% est. & +12% in prior month (rev up from +11.9%); median sales price +13.4% y/y to $423,300 … at current sales pace, it would take 6.1 months to exhaust supply of homes, up from 3.6 months a year ago

This is national info and metro areas will vary but I see the start of slowdown. Inflation eats at income needed to buy houses and most are losing that battle even with good pay wage increases inflation is running way higher so its a net loss.

We actually just looked at OKC metro inventory this week and compared y/y back to 2017. Inventory in OKC is less than it was at this time last year and actually every year we looked back to. I would agree we should be in the beginning stages of a shift with inflation/interest rates on the rise but as long as inventory is so low and demand continues to outstrip supply it's hard to imagine a correction. We are at historic low levels of inventory here still, less that a couple months supply. National correction in some places inevitable, will be interesting to see what happens here since we've done so well economically and continue to grow. Lot's of people still moving in from out of state as well. Buyers should get some relief as rates & prices continue to rise but it hasn't happened yet. Rates are up ~ 1.25-1.5 % off their lows already but it's still the same story. I'm not selling anything (unless it's brand new or off market) still that's not a multiple offer (have been in 5 multiple offers- all different clients looking for different things) just in the last week and it's only February still and as hot as ever.

[Richard at Remax]

We actually just looked at OKC metro inventory this week and compared y/y back to 2017. Inventory in OKC is less than it was at this time last year and actually every year we looked back to. I would agree we should be in the beginning stages of a shift with inflation/interest rates on the rise but as long as inventory is so low and demand continues to outstrip supply it's hard to imagine a correction. We are at historic low levels of inventory here still, less that a couple months supply. National correction in some places inevitable, will be interesting to see what happens here since we've done so well economically and continue to grow. Lot's of people still moving in from out of state as well. Buyers should get some relief as rates & prices continue to rise but it hasn't happened yet. Rates are up ~ 1.25-1.5 % off their lows already but it's still the same story. I'm not selling anything (unless it's brand new or off market) still that's not a multiple offer (have been in 5 multiple offers- all different clients looking for different things) just in the last week and it's only February still and as hot as ever.

I've written 35 offers for 6 clients since Jan 1 and haven't landed a single one yet. Stupid money everywhere.

[OKCRealtor]

I've written 35 offers for 6 clients since Jan 1 and haven't landed a single one yet. Stupid money everywhere.

Wow, that is insane. Rarely do I get past 5-6 offers with someone before we land one. My experience is that at that point it's on them as they're not willing to play by the market rules or just not well qualified enough to win and will have to wait. I don't know how reluctant you are to cut a client loose but sometimes it's 100% a necessary evil. A few bad clients can really screw up the good ones when they come along. I was pretty fortunate that I got 3 out of the 5 accepted since last week.

[OKC Guy]

We actually just looked at OKC metro inventory this week and compared y/y back to 2017. Inventory in OKC is less than it was at this time last year and actually every year we looked back to. I would agree we should be in the beginning stages of a shift with inflation/interest rates on the rise but as long as inventory is so low and demand continues to outstrip supply it's hard to imagine a correction. We are at historic low levels of inventory here still, less that a couple months supply. National correction in some places inevitable, will be interesting to see what happens here since we've done so well economically and continue to grow. Lot's of people still moving in from out of state as well. Buyers should get some relief as rates & prices continue to rise but it hasn't happened yet. Rates are up ~ 1.25-1.5 % off their lows already but it's still the same story. I'm not selling anything (unless it's brand new or off market) still that's not a multiple offer (have been in 5 multiple offers- all different clients looking for different things) just in the last week and it's only February still and as hot as ever.

Good info. I think in time even here it catches up based on price increases and inflationary headwinds. If people are moving from higher cost areas and sold house at old city (at a very high price in comparison to our prices) they would be able to afford. But how will local buyers with less income afford the much higher prices. We did weather the last downturn well but prices weren’t spiked as much as now.

Here’s another chart over time, again its national amd not always reflective of OKC metro. Blue is medium price and orange is supply of houses. Chart is from 2000-current:

[OKCRealtor]

Good info. I think in time even here it catches up based on price increases and inflationary headwinds. If people are moving from higher cost areas and sold house at old city (at a very high price in comparison to our prices) they would be able to afford. But how will local buyers with less income afford the much higher prices. We did weather the last downturn well but prices weren’t spiked as much as now.

Here’s another chart over time, again its national amd not always reflective of OKC metro. Blue is medium price and orange is supply of houses. Chart is from 2000-current:

I agree that things will level off once interest rates along with ongoing price increases force people out of the market. Unfortunately for a lot of locals I think they either have to stay put in their current home instead of moving up or are forced to be long term renters. We still have one of the lowest national housing prices so really only one way to go IMO with a growing city and economy. My guess is on a more normalized growth rate, 3-4%, rather than a correction. I just don't see it happening here. Keep in mind also there is a much, much larger % of cash buyers and investors in the market. Not all of whom are necessarily local. Without looking I'm guessing I did 20-25 deals last year straight cash. I'd say roughly 30% of buyers are all cash now- pre pandemic I'd say that might have been 10% if I had to guess. Most of the others were pretty well qualified buyers who had a lot of cash to work with in order to win in aggressive situations. The days of first time buyers/FHA/VA loans getting into a home with little to no cash have been virtually non existent unless it's a brand new build.

We live in such a crazy world with so much uncertainty now that it's almost hard to put much stock into any historical data IMO. Our average price is about 1/2 the national average based on that chart and our inventory is about 1/3 national average and that's going to take some time to balance out. It can't stay like this forever but I think we just return to more of a balanced market and buyers get a touch of relief when things do settle. We'll see. Truth is none of us know or can time the market or we'd all be so rich we wouldn't be posting about it in here.