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April 26th, 2012 - Kelley Chambers

Reviving residential


Despite a national housing slump, metro-area prices have remained flat – and even increased – as builders pulled back


 

While the housing market nationwide has taken a roller-coaster ride in recent years, often with more plunges than ascents in many areas, Oklahoma City consistently has held its own.

Real estate website Zillow reported that 10 metro areas, Oklahoma City included, have seen home prices go up or remain flat since a peak in pre-recession home prices in 2006. That’s impressive, compared to an average drop of 25.9% nationwide over the past six years. While much of the country experienced that drop, the 10 cities cited by Zillow appreciated by an average of 3% or better.

Tulsa made the list at No. 3, but Oklahoma City came in second and boasted a 9.4% increase in home prices since the peak in 2006. Compared to the national average, Zillow found Oklahoma City was 30.9% below on underwater mortgages, and 85.9% below in foreclosure resales. No 1. on the list was Fayetteville, N.C.

In its January home price sales index, CoreLogic, provider of consumer, financial and property information to businesses and governments, reported national home prices, including distressed sales, declined on a year-over-year basis by 3.1% in January 2012, and by 1%, compared to December 2011 – the sixth consecutive monthly decline.

For Oklahoma specifically, CoreLogic reported home prices as of January, including distressed sales, increased by 0.8% in January 2012, compared to January 2011, and increased by 1.2% in December 2011, compared to December 2010. Excluding distressed sales, year-over-year prices increased by 1.9% in January 2012, compared to January 2011, and increased by 1.6% in December 2011, compared to December 2010.

Home builders also have ridden that roller coaster. Vernon McKown, owner of Ideal Homes, says the business is cyclical.

“Fortunately, the Oklahoma City market did not experience the incredible boom in housing (and prices) that many other areas of the country experienced,” he says. “We certainly had a ramp-up, but not to the extent as markets like Atlanta, Las Vegas and many more. So the fall in our market didn’t seem as far.”

In a market where home values could be shaky and demand was down, McKown says it just meant rethinking how he did business. In 2006, Ideal had 480 permits for new homes. In 2008, that number fell to 295 and stayed in that range through last year.

“When the market declined, we placed an emphasis on discipline and debt reduction,” he says. “But the biggest change came in our ability to embrace customization.”

 
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