SIZZLING, DAZZLING
Home sales are still superlative in OKC
So many buyers are paying so much more than sellers are asking for in the still-sizzling sellers’ market for houses that it jumps out of the numbers with a dazzling statistic. • It’s 100.4, the average “percent of list price received” by metro-area sellers this year through July. • It’s more than 100, which is so rare as to possibly be unheard of. It usually hovers about 98-99%. • In July, it was 101.1%. • “I started selling real estate in Oklahoma in 1979 and have never seen that before,” said Victoria Caldwell, broker and owner of RE/MAX Associates in Edmond. “The supply of available properties will have to go up substantially to change that.” • And the market is cooling? That’s what some people are saying. Technically maybe, a little: still hot, just not quite as hot.
“The market for houses priced $175,000-$240,000, (negotiations) are still going into multiple offers, especially if the house is nice. Example: Last week on a home priced at $186,000, we offered $193,000 all cash and lost out. There were eight offers,” said Wayne Kirby, with Sage Sotheby’s International Realty in Nichols Hills.
At higher price ranges, he said, “I feel like the market is softening up and the home will sit on the market for a few more days and not get as many offers.”
“A few more days” is literal. Last month, on average, houses sold 11 days after they were listed, according to the Oklahoma City Metro Association of Realtors.
That was with a single month of inventory available. A six-month inventory is thought to reflect a balanced market, one with buyers and sellers basically on equal footing going into negotiations. In July 2020, it took 30 days on average for a house to sell, with a 1.6month inventory.
Here are a few tales from the front lines of the unusual supply and demand.
They made money coming and going
Seth Herrera, 27, a middle school teacher, and his wife, Jessica, 25, a surgical scrub technician at Oklahoma Heart Hospital, enjoyed the best of both sides of the market when they decided to buy a bigger house for themselves and 3-year-old son, Sterling.
They got $3,000 more than they asked for the house they sold in Yukon, a 1,300-square-foot place build in 1980, and paid $5,000 less than the asking price for the one they bought in northwest Oklahoma City, a 2,371-squarefoot home built in 2005.
Seth said the $162,000 they got when they sold was a total surprise. They expected $138,000, which is what Zillow said their house was worth.
Working with agent Eddie Landry, of Keller Williams Realty Platinum, they made improvements to the property to add value to it. First, Landry priced it at $145,000. They kept working on the house. Then, Landry advised them to list it for $159,000.
It went under contract 12 hours after it was listed, for more than they asked, which is hard to beat.
The Herreras’ search for a new home, though, was “miserable,” Seth said, because they kept getting beat out every time they made a purchase offer. “It was insane. (It took) weeks and weeks and weeks of looking and going to open houses.”
Wedded home-buying bliss in Norman, OK
Angela McLaughlin, 34, and her husband, Mark, 38, bought a house last month in Norman as newlyweds — but the extra money they received when they sold was no wedding gift, because they also paid more than the asking price for the one they bought.
The market did make it easier than it might have been to move into a bigger home for themMcLaughlin selves and their family —
Marley, 10, Hayes, 7, Hannah, 7, and Jack, 5.
She sold a house she’d owned for seven years, asking for $159,000 and getting $170,000 — two days after listing it — working with agent Brenda Woodard, of Whittington Realty in Oklahoma City.
They paid $445,000 for their new-tothem place, about $10,000 over the asking price — after nearly four months of looking.
“We weren’t too surprised at getting offers quickly, but we didn’t know what to expect,” said Angela, a stay-at-home mom. Mark is a store leader for Target. “We had a good experience. Selling and buying can be stressful, but we had a smooth experience.”
Not all sellers take extra money to the bank
Amy Young’s selling experience shows that not everything in the housing market is crazy. She got less than she asked for when she sold her home in the historic Crown Heights neighborhood. But she said that’s OK.
“It was the right offer,” she said, for the 1,844square-foot, two-story house she’d owned for 14 years on NW 40. Built in 1937, it needed work. She worked with agent Al Perry, of Flotilla Homes. She asked for $515,000 and got $510,000.
Young, 50, didn’t buy another home for herself and Willie Merle, her YorkieJack Russell terrier-Pomeranian mix. She opted instead for an upstairs apartment at 612 NW 29, the location of nonprofit Six Twelve Inc., a community education center that she co-founded and leads as executive director.
Is balance returning to the housing market?
There are signs that the market has reached its extreme. More houses are coming up for sale.
“There were more homes that came on the market in July 2021 than any month since August 2015,” said Patrick Schrank, managing broker at Swift Co. Real Estate in Norman. “There are certainly more homes on the market now than there were at the peak in March, April and May, but still plenty of people out looking.”
The rise in the number of listings is a move toward balance in the market, said Melissa Barnett, an agent with Keller Williams Elite in Oklahoma City.
“In April we had 2,000 homes on the market across all price points in the entire MLS,” she said, meaning the local Multiple Listing Service, the database of homes listed for sale with Realtors. “June it was up to 2,500, July 3,000. Today we have 3,315 so it is slightly slowing down, just not much.”
Whether or not demand is easing — by either an increase in supply or an actual decrease in the number of would-be buyers — sales are still hotter than in summer 2020.
Those were still the early days of the pandemic-era housing market, when inventory started draining fast across the country partly because of coronavirus-related pauses in construction and the production of building materials.
At the same time, historically low home loan rates plunged further, to less than 3%, sparking demand from regular buyers, as well as investors.
A breakdown of home sales activity by price
Demand has eased at higher price ranges, said Benjamin Floyd, broker and owner of 525 Realty Group in Edmond. He outlined the price points as he’s seeing them.
“Over all the market is still moving,” he said, “$100,000-$125,000, almost non-existent inventory; $125,000$150,000, if it’s in good shape or in a good area, still seeing multiple offers first day and well over list; $150,000$200,000 is about the same; $200,000$250,000 is slowing a bit with multiple offers a bit over list; $250,000$300,000 same; $300,000-$350,000, if nice, under contract in a day or two and multiple offers begin farther and fewer.
“This trend continues the higher you go — the more back to normal it gets.”
House-hungry buyers keep having to sweeten the deal, paying more than asked to get a home, said Kacie Kinney, an agent with Keller Williams Realty
Elite in Yukon.
“The highest we’ve seen (so far) is $27,000 over,” she said in her monthly emailed market commentary. “Secondly, most buyers are now paying the difference between the appraised value and the contract price.”
Lenders rely on appraisals to underwrite home loans, not loaning more than a house is judged to be intrinsically worth. Some buyers are still blowing off appraisals and making up the difference themselves.
“We recently have seen a buyer offer to pay up to a $26,000 difference (WOW),” Kinney reported. “Lastly, buyers are also offering to pay some of the seller’s closing costs. The most we’ve seen offered (so far) is up to $5,000.”
She added, “As we have said before, if you’re a seller in this market you have the upper hand, but if you’re a buyer, it’s a dog-eat-dog world out there.”
Builders rev the engine after coasting in June
For their part, homebuilders stepped it up in July after coasting in June by starting 454 houses, just one more than in June 2020, according to Dharma Inc.’s Builder Report.
The pullback was attributed to soaring costs for building materials, delivery disruptions related to the pandemic and last winter’s ice storms, and, in some areas, a shortage of lots ready for construction.
Last month, builders started 546 houses, Dharma reported, a 20.3% jump from the month before, although 18% down from the 666 starts in July 2020.
Lots are becoming available, which will push up starts, said Erin Yarbrough, director of marketing for Ideal Homes & Neighborhoods, based in Norman.
Ideal just opened three new neighborhood sections to custom construction, she said.
“As more sections continue to open up for custom building and new field homes, permits will increase, as well,” Yarbrough said. “Over the next 12 months, we expect to open brand-new neighborhoods in Harrah and Edmond, as well as new sections in existing neighborhoods throughout the metro.”
Realtor to buyers: Delays persist in construction
Construction slowdowns related to high construction costs and supply chain disruptions are still keeping builders from building as much as they want, and would-be buyers need to be prepared for that, said Alysia Cook, an agent with eXp Realty and Chad Rice Homes.
“Two-by-fours and frame packages are starting to get less expensive, and prices could decrease even more over the next three to six months,” she said. “But because of lingering supply chain issues and higher prices we’ve seen, builders are behind and home completion dates are still being pushed.”
Cook said lumber availability is loosening up, but other building supplies such as windows, wiring and plumbing materials remain in short supply.
What should a buyer do while waiting on new construction?
“Have upfront, open conversations with your Realtor and your builder,” Cook said. “Stick to a budget, even build under budget in case of unexpected expenses. And have a contingency plan about where you’ll live if your new home is delayed.”