Parade of Homes Spring Festival rides out storm
Nobody holds a parade during bad weather, but the Parade of Homes Spring Festival will go on despite a “perfect storm” in the housing market. • Just 50 homes are in the parade, April 23-25 and April 30-May 2 — less than half as many as usual, with entries scattered from Edmond to Norman and from Yukon to Choctaw. Coronavirus precautions will be observed. “Builders can’t keep inventory long enough to show during the parade,” said Elisa McAlister, executive vice president of Central Oklahoma Home Builders Association, which organizes the event.
The featured neighborhood is Cross Timbers, off Covell Road between Sooner and Coltrane roads in Edmond. The parade book, with description and maps to the homes, goes online Monday. OnCue stores also will have the free guidebooks.
The storm
The storm is a low pressure system, in the form of low mortgage interest rates, that is doing to the housing market what low pressure does to the atmosphere:
It’s letting it explode.
It’s driving demand that is overwhelming homebuilders’ ability to keep up, as well as the willingness of potential sellers, cooped up for a year to avoid the coronavirus, to put their houses up for sale.
Metro-area builders are trying. Through March, they started 1,545 houses, up 7.2% compared with March 2020 and the most since the first quarter of 2013, when the industry was at full speed in recovery from the housing crash and Great Recession of 20072009, according to Norman-based Dharma Inc.’s monthly Builder Report.
They really revved it up in March, with 593 starts, up 21.5% compared with March 2020 and the most since March 2013, Dharma reported.
Meanwhile, the inventory of homes listed for sale with Realtors, which doesn’t include those offered directly by builders, keeps falling.
The local market ended 2020 with a 30-day supply, according to the Oklahoma City Metro Association of Realtors. By the end of January, the inventory had fallen to about a 24-day supply. By the end of March, it was down to 18 days.
It’s driving home prices up. The median price last month was $227,000, up 13.5% from March 2020, and the average price was $265,246, up 15.3%, the Realtors reported.
Pandemic parade year 2
Holding the Spring Festival and the Parade of Homes Fall Classic last year, with the pandemic raging, “wasn’t near as daunting” as organizing this one, said Nathan Walters, event chairman and owner of MassaRossa Homes in Edmond. Walters Some builders had
nothing to offer, he said. “We’re sold out. I’ve even sold my models,” said Shawn Lawrence, vice president of sales and acquisitions for TimberCraft Homes.
Some builders had to ask owners of their recently sold homes to let them open them up to the public for the parade “to have enough for people to see,” Walters said,
That’s what Edmond builder Caleb McCaleb did: His lone parade entry — he usually has several — is under contract to buyers who are letting him show it.
McCaleb said his one parade home is a dream home. He said he and other builders with fewer entries than usual loaded them up.
“We tried to put every cool idea we could into one home,” he said.
Materials breach
A year ago, the market was at a near standstill. Lumber mills, among other manufacturers, had shut down because of COVID-19. Suppliers have not yet gotten back up to speed.
Literal storms made things worse: 11 hurricanes made landfall in the United States last year, making 2020 one of the costliest ever in wind and flood damage to homes and other structures, adding to demand for building materials and causing prices to spike.
The deep freeze in Texas in February exacerbated the situation: A resin used in wood products is manufactured around Houston and is in short supply with orders backed up because resin froze in pipelines, McCaleb said.
Computer chips are scarce and are hitting construction, as well as automakers, because the “smarter” homes are the more chips go into them, from HVAC systems to appliances, he said.
Prices for all construction materials, residential and commercial, ended March 12.9% higher than in March 2020, the largest increase in 35 years, said Ken Simonson, chief economist for Associated General Contractors of America.
Lumber and plywood soared 63%, milled copper and brass went up 44%, and steel products went up 40%, among other increases, Simonson said in his weekly e-newsletter.
Plus, he said, producers are quoting extended or uncertain delivery times and are limiting allocations to customers.
McCaleb said it’s all added to the time it takes to build a house. Before COVID-19 hit, it typically took McCaleb Homes six months to build a house; now it takes eight months. He said if someone contracted with him to build a house this week, it would be mid-July before he could start it.
McCaleb said he’s still pre-selling homes, meaning selling them before they’re started. So is TimberCraft, Lawrence said.
“A lot of builders have shut down presold custom builds,” McCaleb said, to avoid contracting to build a house for a certain price when costs are still going up.
McCaleb said he’s been able to negotiate average pricing with his suppliers to lessen the squeeze. Lawrence said TimberCraft sees pre-selling during a time of rising prices as “part of the gamble” of business and uses the increases to encourage people to “buy now and lock in your price.”
Everybody loves a parade
The builders said they expect big crowds during the parade despite the turmoil in the market.
“We had the parade during the pandemic (last) spring and fall,” McCaleb said, and potential buyers and others looking for ideas for their own homes came out — masks, hand sanitizer, social distancing and all.
“We’re hoping with the vaccines, we’ll see big numbers again,” he said.
Skyrocketing costs, plus a labor shortage, won’t put a damper on the parade, said John Nail, the Yukon-based builder who is president of the Central Oklahoma Home Builders Association.
“It’s amazing, the dream of home ownership. It’s still the American dream,” Nail said. “We’re still excited about it. We’re still blessed. We’re blessed to build, blessed to buy and blessed to sell.”
Pandemic precautions
Parade organizers ask visitors to:
• Continue to practice social distancing as best as possible while visiting parade homes.
• Wash your hands frequently and use hand sanitizer before entering each parade home.
• Keep the touching of surfaces (countertops, doorknobs, cabinet doors, etc.) to a minimum
• Wear a face mask or covering if you think necessary.
Real Estate Editor Richard Mize edits The Oklahoman’s Real Estate section, and covers housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com. Contact him at rmize@oklahoman.com. Please support his work and that of other Oklahoman journalists by purchasing a subscription at http:// subscribe.oklahoman.com.