OKLAHOMA CITY (Free Press) — Current home listings in Oklahoma City metro are down 50.1 percent compared to June 2020 while the median sales price has risen 11 percent from last year, according to current Multiple Listing Service (MLS) statistics.
This increased demand for real estate combined with the decreased supply of sellers willing to put their house on the market has created scarcity, bidding wars between local and out-of-state buyers, and a ripe seller’s market for those looking to make a profit.
Kira Ogle and Gwyn Self, broker associates with Coldwell Banker Real Estate LLC, say this trend is the culmination of low-interest housing rates brought on by the pandemic, extra stimulus funds, and new businesses such as medical marijuana and film moving into the state.
Ogle and Self see this trend continuing, despite fears that the market is “going too high too quickly.”
“Even in June of last year, it was crazy and kind of a similar situation. I think one of the only differences this year from last year is that perhaps people got more serious about buying houses,” Ogle said.
“We’re getting buyers before we even put in an offer, and getting them fully qualified instead of just for a pre-approval. Our offers are waiving contingencies, meaning sometimes we’re waiving inspections or, in the case of an inspection already being done, many are simply taking the house as is.”
This was the case of Eric and Deanna Nichols, home-sellers out of Yukon. After living in their house for 11 years, the Nichols chose to put their house on the market and purchase a new home, pending the sale.
The Nichols would accept two out of several offers before landing on a third well over the asking price, even with the buyer taking the house as-is. As new home sellers, the Nichols could afford to be decisive about their offers in this current market.
No fear of selling
“I don’t think there’s even a fear of selling your house, either. I’ve heard from other Realtor friends of mine that they have had buyers bid so high that they essentially shut out the other bidders,” Eric said. “In our case, the appraiser was using a market comparison from a year ago; obviously the housing market is much different now.”
The Nichols signed the contract for their home on the other side of Yukon in a newly built neighborhood in early March 2021. Out of curiosity, they researched how much the same house would cost to buy now only to find the house was $23,000 more expensive.
Sellers like the Nichols aren’t the exception; rather, they’re the trend.
“[Sellers] They’re getting top dollar right now,” Ogle said. “The problem right now is that sellers have nowhere to go, so most of the sellers are scared to even put their house on the market because we’re essentially in a market lock.”
Self added, “However, it is difficult for some people; like we have a few customers that are probably going to list because they have so much equity that they’ll essentially make off debt-free. They’ll be able to pay off their cars, credit cards, things like that and go into a rental for a little while until the market calms down.”
Challenges for buyers
While this current trend is ideal for sellers, it can present unforeseen challenges – sometimes literally – for veteran and first-time homebuyers. Two buyers who have experienced this competitive market firsthand are Julia Cunningham, 23, and Marisa Brown, 24.
Cunningham, an administrator for Vincit Constructors in Oklahoma City, and Brown, a Whole Foods Market employee, have been looking for homes in the Village and northeast Oklahoma City for a couple of months.
“It’s pretty much been the same since the beginning because of the current status of the housing market where houses are being sold in under a week,” Cunningham said. “They’re going so fast that we can’t keep up.”
Cunningham says the only reason that she’s able to enter the housing market at her age is due to an unforeseen inheritance she received after her great-aunt’s death.
“It’s not a lot by national standards, but it’s enough here for me to put 20 percent down so that I don’t have to pay mortgage insurance. I’m doing this so Marisa and I don’t have to pay rent to a landlord anymore,” Cunningham said. “I’d rather invest this small inheritance that I have in a property than continue to throw it away on rent which is not a privilege most people have.”
Prospective buyers offering between $5,000 and $12,000 more than the listed price plus the skyrocketing increases on building materials like lumber has altered the standard process for purchasing a home – making an offer after looking over other properties to ensure the right decision is made.
Instead, realtors are being given offers in as little as two hours of listing with bids high enough to block other buyers.
“There are a lot of people putting advance offers on houses and hiking up the bids by like $10,000 for a home. If you can’t afford that $10,000 jump, then you’re out and back to square one,” Cunningham said.
“People with that express wealth are able to outbid us because they can afford to put down more and it snatches it outright from under everyone else. Some are doing this without even seeing the home first. How are you supposed to win against that?”
Ogle and Self acknowledge that the option to think over a home purchase doesn’t exist in the current market. Their hope is that appraisal rates can help cool the market to a manageable level before a market lock makes this supply and demand problem unmanageable.
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Last Updated June 1, 2021, 3:20 PM by Brett Dickerson – Editor