The state of Oklahoma received good news yesterday with the release of the Federal Housing Finance Agency's second quarter housing report. Oklahoma ranked #2 with a 1.06% appreciation rate for the quarter ending June 2009, and a .94% increase for the year, only behind North Dakota, with a 1.91 % increase for the quarter and 2.82% for the year. This represents quite a contrast with most other states, who are experiencing decreases in the same quarter. Nationwide, the decreases appear to be diminishing. Overall, U.S. home prices fell 0.7% in the second quarter of 2009 from the first quarter of the year. Over the year ending in the second quarter of 2009, seasonally adjusted prices fell 6.1%. This was the second consecutive quarter that the rates of depreciation are slower than in 2008, signposts to a stabilizing market.
Metropolitan areas in our state show curious results. Tulsa experienced -1.23 % change for the quarter but .10% increase for the year. Oklahoma City showed a slight decrease in house prices for the second quarter, at -.74%, and -.34% for the year. The FHFA Report takes into account all houses that sold with Fannie Mae or Freddie Mac acquired mortgages, leaving out those sales with FHA, VA and jumbo (over $417,000 in Oklahoma) mortgages. While the report is a good overall indicator of past price performance, a few other statistics and anecdotal evidence warrant our attention as we watch to see how quickly our local market might move in the future.
First time home buyers are out in force right now, trying to secure a contract on a home before the $8,000 tax credit ends on November 1, 2009. Entry level homes are experiencing a noticeable end of the summer demand, so it will be interesting to see the effect on prices over the next three months.
A significant shift occurred in June in the upper-end residential market, with 29 homes closed in the Oklahoma City MLS between $500,000 and $2,000,000 range. six of which were over the one million dollar mark. This represents an increase over May 2009 of 12 closed sales and the lowest month of January 2008 with only 8 units sold. The June sales also marked the largest increase of upper-end homes since October 2008 with 24 sales and August 2008 with 39 sales. Over that last year, this has been the most cautious segment of the market, with a wait and see attitude. But that may be changing.
Is the Oklahoma flat housing price landscape shifting? With the bevy of first time home buyers scurrying to write contracts, will the hoped-for "trickle up" effect occur? Does the noticeable movement in the upper end of the market signify increased confidence in our local market? Overall the market is stable, with about 13% less inventory on the market than this time last year, with a healthy average of 80 days on the market and a 96% list to sales price ratio. With continued shifts in particular price points, we may be poised to see some peaks emerging on the housing horizon.
Sources: FHFA News Release, 8/25/2009; based on information from the MLSOK.com for a period of 6/01/2008 through 7/31/2009, while information is deemed reliable it is not guaranteed.
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