Crude, millennial stats bring housing future home
Economist Ted C. Jones’ usual slapstick, fire-hose approach to presenting data — and, of course, that’s a compliment — almost left me again besotted with information, analysis and bad jokes, but two items kept it to just a buzz.
One was from the oil patch. The other was from boomers’ not-yet-empty nests.
First, the oil patch. Yes, even armchair observers of the oil business know that drilling ain’t what it used to be — it’s better than it’s ever been. Advances in technology have kept the business afloat even in a glut of crude oil (defined as any amount that keeps prices lower than we’d like).
But Jones, Ph.D., chief economist for Stewart Title Guaranty Co. in Houston, had three numbers that I’d not seen before that hammer it home: 30, 40 and 19. He gave a talk at Will Rogers Theatre Tuesday as the guest of Stewart Title of Oklahoma Inc.
Thirty months ago, it took 40 days, on average, to drill and complete a well. Now, it takes 19 days. Drilling costs have been cut in half, basically.
That’s why he said he’s not worried about the oil business in the long term.
Technology — including improvements in hydraulic fracturing (in its 67th year) — is the main reason why nobody is freaking out over the plummeted rig count.
Some of us still watch the rig count at as a barometer for the business, even though, with multiple horizontal holes per rig platform, that number doesn’t mean what it used to mean.
And here is where I point out — from my desk at my shaking and rattling home in Edmond, where a mini-swarm of earthquakes struck earlier this week — that while there’s a connection, it’s not fracking that’s cracking my drywall; it’s injection wells where they dispose of all those bazillions of gallons of fracking wastewater.
And here’s where I dare to confess that, just like people shouldn’t gripe about agriculture with their mouths full, it’s hard for me to gripe about the oil business when I’m paying $1.97 per gallon for gas — and when, you know, jobs, housing, economy and stuff.
And here’s where I hope the explosion in oil field technology is also going into disposal well research and alternative fuels.
And it’s where I hope I’m right when I say: Energy companies, which are in the energy business, are most likely, and have the resources, to be doing research on alternatives to fossil fuels — because they’re in the energy business, not just the oil and natural gas business. Hope springs there like a bubbling brook, though, not a gusher.
Now, for boomers’ notyet-empty nests.
They’re emptying. Reports of millennials’ dislike of homeownership are greatly exaggerated, Jones said. They’ve just been taking their sweet time about getting into it, what with coming of age during the only coast-tocoast housing recession in the nation’s history, and what with — ooh, Pabst!
OK, maybe I’ve confused hipsters with millennials. Anyway, millennials do like their disposable income, and they’ve been disposing of it, even if they don’t have as much of it as their boomer parents, rather than socking income into mortgage payments.
By sheer numbers, millennials will have a historic impact on housing and retail for at least the next generation, Jones said. There are 83 million or 91 million millennials, depending on who’s counting, versus 76 million boomers.
Millennials, strange but lovable creatures, do have ways different from our own. Jones cited a poll showing that 75 percent said they could live without the telephone on their “device,” and that 19 percent never check their voicemail.
But they’re not forever renters, or forever living with their parents, which was a lingering effect of the housing crisis a decade ago. Jones noted that they became the top homebuying segment of the population last year, according to the National Association of Realtors.
In his blog this week — at blog.stewart.com/ stewart — Jones cited an Urban Land Institute survey that found that 60 percent of millennials born from 1980 to 2000 plan to be living in a detached single-family home within the next five years and that 75 percent intend to get married.
Your metro mileage will vary somewhere between OgdenClearfield, Utah, with the highest millennial homeownership rate, at 51 percent, and Los Angeles-Long BeachAnaheim, California, with the worst, at 17.8 percent.
He didn’t have Oklahoma City’s millennial homeownership rate, but he did have charts compiled by Madison, Wisconsin-based ABODO Apartments, an online apartment marketplace, showing us neither in the top 10 nor bottom 10, which should come as no surprise.
Hope can spring for homebuilders in most places.
“The leading edge of millennials born in 1980 are already 37 years old, and with the most common age of first-time homebuyers aged 31 (according to NAR), are well on the path in their homeownership journey,” Jones wrote on his blog.
He added, “As usual, I invoke the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market. Nor is there such a thing as typical millennial and where and what type of dwelling they will reside.”
TINSTAANREM is a good axiom. And I’ll add, TINSTAAOKCMREM:
There Is No Such Thing As An Oklahoma City Metro Real Estate Market; rather, because we’re so far-flung, with so many psychographic clusters (different personalities, basically) there are several. We still like to crunch metro-area numbers, though. Somebody has to.
That no-typical-millennial thing is a given. Who are these people?