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Why would I think about buying a home now when everything I read and hear in the National news says the "sky is falling"?

                                                                          updated 12/29/07

We receive many inquiries from people thinking about buying a home.  They usually start with a question like "Is this a good time to buy a home in the Edmond or metropolitan Oklahoma City area?"

With the never ending stories and reports in the National news about some of the problems in the housing market and home loan market, that is a very good, and very reasonable question.

My answer is Yes, I do believe that this is a good time to buy a home.

Let's talk about our local real estate market in the Edmond and metropolitan Oklahoma City area.

The median home price increased 4% from $124,900 in October of 2006 to $129,900 in October of 2007. The average price increased from $144,041 in November 2006 to $146,329 in November of 2007. The average interest rate for a traditional 30 year fixed rate mortgage remained below 6.1%.  The average days on market was down a couple of days to 77 days. We are now in a more "normal" market, which is pretty evenly divided between a "buyers" and a "sellers" market.

Why is Oklahoma real estate so strong?

     Oklahoma has been experiencing very healthy job and population growth.

     According to the "Best Cities for Jobs" report recently released by Forbes magazine, Oklahoma City was 10th in the rankings in the largest 100 metropolitan areas included in the rankings.  The rankings included five criteria weighted equally: unemployment, job growth, income growth, median household income and cost of living.  These are the strongest factors that determine the health of the housing market in any market.  

     There have been 19,600 more people move into Oklahoma in 2006 than moved out.

      And Oklahoma's employment gain beat the national average by nearly 1%. 

The "Oklahoma Numbers" regarding subprime loans.

Regarding the home loan market, we are getting the "bad news" regarding the subprime lender market, but no one tells us what that really means.  The Oklahoma figures show that:

      1. There are about 421,620 home loans in Oklahoma.  Only 56,235 of those home loans are considered to be subprime loans, or less than 1.34% of the total home loans.

      2. Out of the 421,620 home loans, only 7.1 percent of those, or about 29,936, are currently in default.  Of the 29,936 currently in default, about 10,123 of those are subprime loans.  That means that about 82% of the subprime loans are current and in good standing!

      It is obvious from these numbers that Oklahoma doesn't really have a "subprime" problem!

The "Oklahoma Numbers" regarding the reasons for home loan defaults.     

When the numbers are studied, the reasons for home loan defaults are many, but losing a job accounts for 36.3% of the home loan defaults, with 25% of the home loan defaults being caused by illness or death and only 13.6% of the home loan defaults being caused by too much debt.

The "Oklahoma Numbers" regarding foreclosure and loan delinquencies. 

Oklahoma was one of only 4 states that actually experienced a reduction in the foreclosure percentages year over year from September of 2006 to September of 2007.  In fact, Oklahoma foreclosures are down 21% in the first six months of the year over the same period in 2006.  New Oklahoma mortgage foreclosures fell 30% in November of 2007 compared to November of 2006, and were down 8.7% from October of 2007 to November of 2007.

 An Update On The Oklahoma Real Estate Market

Most of the bad news we are bombarded with are from a handful of states, mainly in California, Nevada, Arizona and Florida, and, to a lesser extent, Ohio, Michigan and Indiana.  The increase in delinquencies and foreclosures being reported in the news every day is really not a National phenomenon, but rather a story of these seven states. And, the problems in these seven states were the results of investors and speculators pushing prices higher than homes were fundamentally worth or from the extremely high unemployment rates being experienced by some of these states.

While the national average for existing and new home sales are declining in many states, they have risen steadily here in Oklahoma during the past 5 years.

The median home price right here in the Oklahoma City area grew 31.6% between 2001 and 2006.  In the 2nd quarter of 2007, home prices rose 3.1% over the same period a year ago.

The number of home sales have also improved steadily in Oklahoma.  The state saw a 1.3% increase in home sales in 2006 and this continued with an increase of 1.5% over the 4 quarters ending in June 2007.

Home prices in the Oklahoma City and Edmond area increased 4.7% from the 3rd quarter of 2006 to the 3rd quarter of 2007.  Even more impressive is the fact that prices were up 2.39% from the 2nd quarter of 2007 to the 3rd quarter of 2007.

Another positive indicator of our local market is the supply of homes for sale.  Currently, we have a 6 month supply of homes for sale in our area, compared to the National average of an almost 11 month supply.

Oklahoma is a shining example that "all real estate is local". If you only listened to the National news media it would certainly seem to be a pretty bleak time for housing in America. Unfortuntately, the National news media does not tell our Oklahoma story, that "real estate is A-OK in Oklahoma"!

THIS IS WHY I BELIEVE THAT IT IS A GOOD TIME TO BUY A HOME!