BUILDING MOMENTUM
OKC-area homebuilders started more houses the first half of this year than last, despite the coronavirus and its effects
Oklahoma City-area homebuilders started more houses the first half of this year than last, despite the coronavirus, business shutdowns, the battered energy sector, raging unemployment and recession.
The 2,674 homes permitted through June was 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.
With a shortage of housing inventory, mostly at entry- level price ranges, and persistent, historically low mortgage interest rates,
builders roared into 2020 with 491 starts in January — an increase of 63.1% over January 2019 — then a 28.5% year-over-year increase in February.
Then the coronavirus hit in March.
March starts were off 15%, April's were down 20%, and May's were down 2%.
In June, with businesses opening back up and people who had been staying at home venturing out for the first time in three months, construction starts rebounded 16% over June last year.
New work could be stymied again in July and later because of the spike in COVID-19 cases and renewed emphasis on facial masks and social distancing to try and staunch the spread of the disease.
Whatever the coronavirus brings for the rest of 2020, builders — and buyers — will always have the Parade of Homes Spring Festival to remember. The two three- day weekends when nearly 100 new houses were open to the public left most of them with smiles, masked or not.
"All of our builders were blown away by the sales and traffic during the parade," said Rusty Appleton, executive director of the Central Oklahoma Home Builders Association. "The year has been surprisingly successful for homebuilders. Even though no one is quite sure how long it will last, right now buyers are buying houses."
The pandemic hasn't left the industry unscathed.
In fact, builder Andrew French, president of the association, said a builder member is sick with COVID- 19, with the coronavirus believed to have been contracted from a construction crew member.
"There for a while, they were definitely keeping their distance," French said, then crews relaxed safety measures. He said he expects a return to health precautions.
Appleton said the outbreak has changed builders' and crews' ways, even if they eased up on safety in recent weeks.
"It's affected how we show houses and how we manage job sites," Appleton said. "Fewer subcontractors are allowed on site, which slows build times. Also, the epidemic has affected the speed of the supply chain, which also slows construction."
Nonetheless, the first half of 2020 was "red hot for housing," said Steve Shoemaker, vice president of marketing for Ideal Homes, based in Norman. "A low supply of housing stocking is driving new construction through the roof. We see strong demand in Ideal Homes neighborhoods across all areas of the metro area.
"There was already a shortage of housing supply entering into 2020, then when COVID showed up, many people selling their current home or about to list their home decided to take their home off the market or wait to list out of an abundance of caution. This drove supply down even more, but the demand remained high."
Home shoppers had no fear of going into new houses that had never been occupied, Shoemaker said.
"New housing stock usually accounts for about 20% of home transactions in Oklahoma City. I expect that number to jump up this year. Probably more than we've seen in a long time," he said.
Oklahoma City-based Homes By Taber has had record- breaking sales each month this year, and the transactions were balanced across its three product lines, which range from the low $200,000s to the upper $400,000s, said Lindsay Haltom, director of marketing.
She said historically low interest rates are enabling buyers to qualify for more expensive houses, "disproving the theories that the higher- price- point homes are not able to sell in this market at this time."
The coronavirus has had its effects, Haltom said.
"The pandemic proved to spook some of the real estate investors around the metro that buy homes from builders and then rent them, but since we don't sell to investors we have not seen the repercussions that other builders in the area have experienced," she said. "In April, there was an increase in customers who preferred a virtual video chat appointment in place of the in-person appointments
"Luckily, our sales team had previous experience and training to service these customers without any issues, as we have been serving customers from out of the state and out of the country for quite some time. Those virtual appointments have decreased since April. However, we are still gladly accommodating, as needed."