Filed by Gail Banzet in Business, Feature, Local News, News.
March 5, 2010
 

Click here to download audio

When the housing crisis hit almost two years ago, both Oklahoma’s home and commercial properties continued to hold steady. Foreclosures ran rampant in states such as California and Florida, but not Oklahoma. While those states now worry about a second round of foreclosures, known as shadow inventory, Oklahoma officials say foreclosures total less than one percent.

Doug Emde is president of the Oklahoma Association of Realtors. From his office in Stillwater, he confidently said the state never saw that huge housing bubble burst like so many others experienced. Oklahoma showed a slow and steady increase in home values while other states set prices on market speculation. Consequently, it did not bode well for home buyers.

“And they never got out of economic debt, and so now it’s time to pay the piper again and so you’re going to see more foreclosures in those states because they’re just kind of putting off the inevitable,” Emde said.

That’s not the case in Oklahoma because it entered the recession two quarters behind the rest of the nation. Oklahoma ranks 33^rd in the nation for total foreclosures, and Emde said he thinks the state’s housing market has already hit bottom.

“Our real estate market hasn’t suffered drastically,” he said. “The number of units sold has dropped, but I think that’s kind of a sign of the times.”

A sign of the times and a sign of Oklahoma’s hard winter – Emde said housing sales have been weaker over the past couple of months, compared to a 19 percent increase in the 4^th quarter of 2009, He blames the lower numbers on dreary winter weather when people are less apt to check out a new home, but with spring around the corner, he expects sales to increase.

“With the extended homebuyer tax credit, which expires April 30, we’ll see a surge of house sales before April 30 and then another surge that will close before June 30,” Emde said.

Unlike other tourist states such as Nevada and Florida, Emde says people buy houses in Oklahoma to live and work – not to hire contractors for some big flip and then try to make a huge profit. So as long as the state’s unemployment rate can maintain itself or even improve, residents can expect a reliable housing market with minimal foreclosures.

One other trend Emde said he’s noticed is the average price of a home has dropped, and more people are now looking to buy in the 100,000 to 150,000 dollar range. Also, there’s still time to take advantage of the federal government’s $8,000 first-time home buyer tax credit. A home must be under contract by April 30 to qualify.

As for commercial real estate, foreclosures may not be a big issue either, but businesses have definitely seen a slow down. Mike Craddock is a commercial real estate broker in Tulsa.

“Businesses are having a very hard time getting financing to expand their business, to be able to buy inventory for their businesses, to start new businesses,” Craddock said. “There’s been a severe lack of financing.”

Today’s economy offers up the worst lending times since the 1940s so many businesses are simply hanging on to what they’ve got and not expanding. Retail shops, office buildings, hotels and motels – these all fall under the category of “commercial real estate.” These properties involve greater risk because the economy has more of a direct effect. As Oklahoma continues to work its way out of recession conditions, Craddock said he predicts commercial property sales may get worse this year before they’re better.

“I know the hotel industry is starting to have some challenges,” he said. “There will be other asset classes, other property types that will have some issues. I don’t think they’re going to be huge by any means.”

The Tulsa real estate broker said overall, Oklahoma’s commercial real estate property market will hold stable when compared to other states.