Housing shortage persists
The housing shortage got a little shorter last month. Even with 2,512 new listings — up 10.7% compared with June 2019 — closed sales were up 11.2% year over year.
The inventory slipped to 1.7 months, compared with 1.8 months in May, according to the Oklahoma City Metro Association of Realtors' statistics for Oklahoma City, Arcadia, Bethany, Blanchard, Choctaw, Deer Creek, Edmond, Harrah, Luther, Midwest City, Moore, Mustang, Newcastle, Nicoma Park, Norman, Piedmont, Tuttle, Warr Acres and Yukon.
That means it would take just that long to sell every house listed with a Realtor in the Oklahoma City area. The Realtors don't track off-market sales directly by homeowners or homebuilders.
Houses sold faster, too, in just 32 days, on average, six days quicker than in June of last year. Nationally, home sales rebounded with double digits in June. “Existing home sales ended a three-month string of losses arising out of the COVID-19 pandemic with a flourish, soaring by 20.7 percent,” Mortgage News Daily reported this week, rising from a seasonally adjusted annual rate of 3.91 million units in May to 4.72 million units last month.
Buyers stormed back onto the market, according to the National Association of Realtors. “Buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR's chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
Having more houses on the market than in June 2019 had the metro area out of step with the nation as a whole, the Oklahoma City Realtors said.
“While buyer activity continues to be robust, seller activity continues to be a bit softer, with fewer homes being listed for sale than a year ago. Many housing experts believe sellers remain reluctant to list their homes due to continued concerns over COVID-19, which was beginning to see a resurgence in June. Until sellers regain confidence, housing inventory will continue to be constrained during what is expected to be an active summer selling season,” according to the local association.
Homebuilders here aren't waiting around, or at least they weren't in June, the latest period for which stats were available.
Builders took permits to build 2,674 homes through June, an increase of 6.5% compared with the first six months of 2019, according to Norman-based Dharma Inc.'s Builder Report, which tracks home construction in Oklahoma City, unincorporated Oklahoma County, Bethany, Blanchard, Choctaw, Edmond, Midwest City, Moore, Mustang, Newcastle, Noble, Norman, Shawnee and Yukon.
Construction in the country as a whole rebounded more in June. Single-family house starts led an increase of 17.3 percent to a seasonally adjusted annual rate of 1.19 million units, according to the U.S. Department of Housing and Urban Development and Commerce Department.
“The June reading of 1.19 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months,” the National Association of Home Builders explained. “Within this overall number, single-family starts increased 17.2 percent to an 831,000 seasonally adjusted annual rate, after an upward revision from the May estimate. The multifamily sector, which includes apartment buildings and condos, increased 17.5 percent to a 355,000 pace.”
The coronavirus, through June, had not affected demand for new homes, according to the builders group.
“Fueled in part by record low mortgage rates, builders are seeing solid demand for housing despite the challenges of the virus and elevated unemployment,” said Chuck Fowke, NAHB chairman and a custom homebuilder in Tampa, Florida. “Demand is growing in lower-density markets, including exurbs and small metros.”
NAHB chief economist Robert Dietz said builders are responding to the shortage.
“Single-family construction is expanding off April lows due to lean inventories of new and existing homes,” he said. “However, builders face challenges in growing costs, particularly rising prices for lumber.”
Then there's the pandemic, and the struggling energy business, and their drag on the state and local economy.
“Oklahoma's economy was already slowing in late 2019 and early 2020, due largely to difficulties in the state's important energy sector,”
Chad Wilkerson, Oklahoma City branch executive and economist for the Kansas City Federal Reserve Bank, said during a virtual economic forum last week.
Wilkerson's presentation is available online here: https://kansascityfed.org/ speeches.
“COVID initially spread less quickly here, PPP (Paycheck Protection Program) takeup was strong, and some indicators were normalizing by June but have since pulled back,” he said. “The state's economic and energy sector outlooks continue to depend on how the virus evolves and affects consumer and business activity.”
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