Not just homebuilding is up this year. Builders said house sizes are headed back up, too.
Consumer confidence and historically low mortgage interest rates have buyers buying bigger again, said Kurt Dinnes, president of the Central Oklahoma Home Builders Association and co-owner of Sun Custom Homes in Oklahoma City.
Edmond homebuilder Caleb McCaleb builders are seeing increased demand for upscale homes for the first time since the credit freeze and recession in 2007-2008.
“This is a reversal of the trend we have been seeing the past five years. That is not to say that the mega-home is coming back. We have just seen incremental increases in the average square footage of homes,” McCaleb said.
In the first 10 months of the year, home starts increased 29.8 percent in Oklahoma City, Midwest City, Edmond, Moore and Norman, with 3,892 permits issued, the builders group reported.
Edmond had the greatest increase: 510 permits through October, compared with 331 in the same period last year, a jump of 54 percent.
“Interest rates at record lows are driving the market. Fixed rates from 2.5 percent to 3.5 percent have put a sense of urgency on buyers,” McCaleb said. “Yes, we are seeing a resurgence of the upscale market. I believe people in Oklahoma feel confident about their jobs and we are seeing that spike in consumer confidence reflected in bigger home purchases.”
“We are seeing not only first-time buyers, but a larger number of buyers that are selling their current home and wanting to build their dream home,” Dinnes said. “If interest rates remain low, we should see homebuilding and developing continue to be good. In some parts of the Oklahoma City metro area, available lots to build on are in short supply. Developers are working hard to acquire and develop land to meet the demand.”
McCaleb said big companies with growing work forces are having a big impact in Edmond.
“We are still seeing large numbers of buyers in the Edmond market from Boeing (Co.), Devon (Energy Corp.), Chesapeake (Energy Corp.), Continental (Resources Inc.), Tinker (Air Force Base), SandRidge (Energy Inc.), Mercy (Health Center), Integris (Baptist Medical Center) and OU Medical (Center). Plus we are seeing a lot of local people moving to Edmond from other parts of Oklahoma City (area).”
Dinnes put the increases in economic perspective. Take the 31 percent increase in permits in Oklahoma City this year: That's 643 permits. Assuming an average price of $200,000, Dinnis said, it comes to $128 million pumped into the economy.
“When you consider that over 150 people touch (work on) each new home built, that has created and maintained a large number of jobs in our local economy,” he said. “Homebuilding is definitely a strong indicator as to our economic health not just to a local level but on a national level as well.”