What's the housing market like this year?
Residential real estate moves in cycles. Here's some insight for buyers and sellers in the Tulsa area.
Some years the markets move up, and some years the markets move down. This ebb and flow of home buying always happens, but can vary in length.
Tim Cochran, president of the Greater Tulsa Association of Realtors, says Tulsa’s full recovery from the last big recession was expected to take quite some time.
“Back then, all the economists figured it would take 8 to 10 years to get us back to where we were,” says Cochran, an agent with Keller Williams Preferred.
It has now been nine years since 2010 — the year Cochran remembers the Tulsa metro area hit bottom. Has the area fully recovered?
As of the end of 2018, the answer is a resounding yes. Although just 9,300 houses sold in 2010, home sales in the Tulsa metro area increased every subsequent year and topped 14,000 in 2018.
Many factors can influence home sales, but Cochran says the top factors are the overall economy and employment levels. Right now both are humming.
“Oil prices being down have affected the Oklahoma economy, but our overall economy is still strong,” he says.
Though the price of oil has dipped again in recent months, Cochran says the continued diversification of the area economy has greatly lessened our dependence on oil. Indeed, the oil bust of a few years ago wasn’t enough to stop home sales from growing every 12 months.
That said, local real estate professionals aren’t ready to rest easy. Certain pockets are better and worse than others. Although the tight inventory of homes now gives sellers an advantage, sellers can’t expect aggressive profits from their homes.
“In today’s market, it’s more important than ever that homes are priced right,” Cochran says. “Homes are taking a little longer to sell, so it makes it a little more important that homes are priced accordingly.”
At the same time, the long years of record-low mortgage interest rates have finally edged upward, though Chris Odom, senior vice president and director of lending at Mabrey Bank, says that rise hasn’t been steady.
“Interest rates went up through 2018, though toward the end of the year, they started trending slightly back down,” he says. “In 2019, they’re likely to go up.”
Though the Federal Reserve has drawn some political scrutiny for raising its prime lending rates over the past year, Odom says residential mortgages are more influenced by U.S. Treasury interest rates, since both are longer-term.
Odom says he expects rising interest rates to impact home buying, as he has noticed home builders are seeking fewer speculative construction loans.
“Local builders are being more cautious, and there’s not as much speculative construction since they don’t want to keep as much inventory,” he says.
Heather Van Hooser, senior vice president and director of private banking at Mabrey Bank, says mortgage-related activity at the bank has not slowed.
“We didn’t see things slowing down,” she says. “In fact, with interest rates going up, we had more people coming in.”
Van Hooser says she suspects that rising interest rates have encouraged indecisive people to go ahead and buy, since no one expects rates to drop again in the near future.
She adds that although she has seen steady traffic for purchase and home renovation loans, mortgage refinances have plummeted, especially for those individuals who were able to secure historically low rates over the past 10 years.
Overall, Cochran says he’s hopeful this year will be another strong one for Tulsa-area home sales, though the first few months will likely set the tone.
“I’m anxious to see what 2019 holds,” he says. “I’m optimistic things will continue to improve.”
Tulsa County 2018 Housing Market Statistics
Closed Sales: 10,196
Average List Price: $209,751
Average Sale Price: $204,022
Average Days on Market to Sale: 43.83
Source: Greater Tulsa Association of Realtors, MLS Technology Inc.