Much continues to be said nationally and locally about the state of the economy. If you are like me after listening to a 30 minute news cycle, you probably want to burn your house down, leave your stock portfolio behind (what's left of it) and move to....well I don't know where, but somewhere.
Is the national economy in a recession? Yes. Is it a serious recession? Yes. Should home owners be concerned? Sure. But before you burn your house down or something equally drastic, remember this one, powerful statement: Real estate is local. What you hear about the national housing market and economy does not translate to Tulsa.
Yes, the local real estate market has settled down from it's peak in 2006. But even considering that, 2008 ranked as the fourth best year ever in the Tulsa Real Estate Market and the best year ever for local real estate values.
In 2008, the greater Tulsa real estate market saw 13,454 properties close sale at an average price of $151,478. Going back 18 years to 1991, the same market saw 4471 properties close at an average price of $78,844. Within that 18 year period, there were 4 periods of differing levels of contraction. What we are experiencing locally is just a normal part of the cycle - which is part of the good news - this is normal.
As posted previously, the national contraction may be severe in certain places (the sun belt, rust belt and both coasts are most notable), but in Tulsa, the contraction is expected to be no worse than .02%. Not exactly cause for burning down houses, jumping out of windows, etc.
Finally, 30 year fixed mortgage interest rates as of this posting are still around the 5% mark and some home builders are even offering 30 year fixed rates of well below 5%. This should help to ensure a stable market, and possibly could encourage a modest expansion in the market.
Monday, January 26, 2009
Wednesday, January 21, 2009
Impact of Record Low Interest Rates on the Market
I outlined in my post on 1/20/2009 the strength of the Tulsa Real Estate Market and how it is well positioned for 2009. There's more good news!
The Federal Reserve in late December 2008 took the unprecedented step of lowering its short-term target interest rate essentially to zero. More importantly, it made a strong commitment to provide additional support, as needed, to the housing market by continuing to purchase mortgage-backed securities.
As a result, 30-year fixed mortgage rates dropped below 5% to stand at their lowest level in more than FIFTY years!
If rates stay near 5 percent or drop even lower (a real possibility) home sales could rise nationally by 10% to 15% in 2009 and bring price stabilization to parts of the country where markets have lost significant value (according to Lawrence Yun, chief economist of the National Association of Realtors).
For markets like Tulsa that have remained strong and not lost value, this could mean an increasingly competitive real estate market and a large influx of buyers - both of which are great things for the local real estate market.
As an example, I just had a client receive a fixed-rate mortgage quote of 4.75% on a $500,000 plus mortgage. The client was able to use the low interest rate coupled with the less than favorable economic news from the national media outlets and secure a fantastic deal on his dream home. Twelve months ago this would not have been possible.
There is a unique window that will remain open possibly the next couple of months for those who are considering trading up to the larger dream home. I believe the low interest rates will remain for most if not all of 2009, however when Spring hits it will bring with it a significant increase in Buyer activity. Couple this with historically low interest rates and we could be looking at a very competitive market beginning in April.
If you are considering moving into your dream home or a larger home, now is the time.
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Tuesday, January 20, 2009
Tulsa Area Real Estate - 2008 Overview
We are officially done with the 2008 Real Estate year. For many around the country it's a welcomed goodbye. Markets on the coasts, in the industrial rust belt and in the Sunbelt areas of Arizono and Nevada were hit hard by rapidly increasing foreclosure rates, falling property values, increase market sale times and compounding unfavorable economic news. Needless to say that for most 2008 was less than a great year.
Could the same be said for Tulsa in 2008? The answer to that question depends upon who you talk to. Let's examine the facts:
The Tulsa Market as I refer to it consists of the following school districts: Tulsa, Jenks, Bixby, Broken Arrow, Union, Glenpool and Owasso. Certainly there are other, vibrant and growing communities and school districts that comprise the greater Tulsa area. This list simply represents the bulk of the Tulsa metro's real estate market and doesn't intend to slight any community not listed.
In 2007 the Tulsa Market, as defined above, resulted in 9,693 residential properties closing sale. The average listing price was $168,961 and the average final sales price was $164,577. The average property size was 1,930 square feet and the average time on market was 53 days.
In 2008, when everyone talked about the terrible real estate market, the Tulsa Market resulted in 8,602 residential properties closing sale - an 11.3% decline in number of units sold. The average listing price was $170,900 and the average final sales price was $165,922 - in increase from 2007 of about 3/4 of a point. The average property size was 1,935 square feet.
So while the number of properties sold was down by 11%, the value actually went up slightly and the number of days on market stayed the same as well. Of course these numbers can vary greatly depending upon which part of the metro area you live (mid-town vs south tulsa; owasso vs. jenks, etc) and I will discuss this more in depth in a later post.
Further, several sources are indicating that the Tulsa area is well positioned to ride out any further market downturns. Economy.com ranks Tulsa as the 6th strongest housing market in the country, predicting Tulsa's housing market will lose about 1% of it's value before the market begins to recover by the end of the year. Tulsa ranks ahead of Oklahoma City, Little Rock, Wichita, Springfield, Dallas, Fort Smith and all other neighborhing markets in the study.
Forbes Magazine ranked Tulsa as the fifth best city in the country to ride out the recession, based on our low unemployment and stable home values.
Tulsa is ranked by MSN Real Estate as the ninth most livable city in terms of best bargains for real estate.
Stan Lybarger in a recent article in the Tulsa World, had this to say about Tulsa:
Other area economists take a similar view, forecasting flat to slightly positive growth for 2009.
As a realtor, I have opportunity to discuss the market with a variety of professionals in the market. All are seeing an increase in buying activity over the first couple of weeks of 2009 and a marked increase in out-of-state interest in the Tulsa real estate market.
So, while the news continues to paint a negative picture of real estate, keep this important statement in mind: all real estate is local. The Tulsa market remains stable and strong.
Upcoming posts will focus on more specific details for a variety of market segments - Union, Jenks, Owasso, Broken Arrow, Bixby, Glenpool, and Tulsa schools. I will also be posting snapshots of individual neighborhoods that may be helpful to those new or unfamiliar with Tulsa.
Could the same be said for Tulsa in 2008? The answer to that question depends upon who you talk to. Let's examine the facts:
The Tulsa Market as I refer to it consists of the following school districts: Tulsa, Jenks, Bixby, Broken Arrow, Union, Glenpool and Owasso. Certainly there are other, vibrant and growing communities and school districts that comprise the greater Tulsa area. This list simply represents the bulk of the Tulsa metro's real estate market and doesn't intend to slight any community not listed.
In 2007 the Tulsa Market, as defined above, resulted in 9,693 residential properties closing sale. The average listing price was $168,961 and the average final sales price was $164,577. The average property size was 1,930 square feet and the average time on market was 53 days.
In 2008, when everyone talked about the terrible real estate market, the Tulsa Market resulted in 8,602 residential properties closing sale - an 11.3% decline in number of units sold. The average listing price was $170,900 and the average final sales price was $165,922 - in increase from 2007 of about 3/4 of a point. The average property size was 1,935 square feet.
So while the number of properties sold was down by 11%, the value actually went up slightly and the number of days on market stayed the same as well. Of course these numbers can vary greatly depending upon which part of the metro area you live (mid-town vs south tulsa; owasso vs. jenks, etc) and I will discuss this more in depth in a later post.
Further, several sources are indicating that the Tulsa area is well positioned to ride out any further market downturns. Economy.com ranks Tulsa as the 6th strongest housing market in the country, predicting Tulsa's housing market will lose about 1% of it's value before the market begins to recover by the end of the year. Tulsa ranks ahead of Oklahoma City, Little Rock, Wichita, Springfield, Dallas, Fort Smith and all other neighborhing markets in the study.
Forbes Magazine ranked Tulsa as the fifth best city in the country to ride out the recession, based on our low unemployment and stable home values.
Tulsa is ranked by MSN Real Estate as the ninth most livable city in terms of best bargains for real estate.
Stan Lybarger in a recent article in the Tulsa World, had this to say about Tulsa:
- Our cost of doing business is 7.1 percent below the national average
- Tulsa's cost of living is 11.5 percent below the national average
- Tulsa County per capita income is 20.7 percent above the national average
- The Tulsa area added 1,890 jobs in 2008
- Tulsa's current unemployment rate is 4.6 percent - the national rate is 6.5 percent
- In 2009, the number of jobs in the Tulsa area is projected to remain virtually unchanged
Other area economists take a similar view, forecasting flat to slightly positive growth for 2009.
As a realtor, I have opportunity to discuss the market with a variety of professionals in the market. All are seeing an increase in buying activity over the first couple of weeks of 2009 and a marked increase in out-of-state interest in the Tulsa real estate market.
So, while the news continues to paint a negative picture of real estate, keep this important statement in mind: all real estate is local. The Tulsa market remains stable and strong.
Upcoming posts will focus on more specific details for a variety of market segments - Union, Jenks, Owasso, Broken Arrow, Bixby, Glenpool, and Tulsa schools. I will also be posting snapshots of individual neighborhoods that may be helpful to those new or unfamiliar with Tulsa.
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