A federal look at home prices from 2006 to 2011 in the booming U.S. oil patch found a tie between appreciation and places with lots of energy jobs, which probably was no real surprise.
In Oklahoma, having more energy jobs also meant gains in home values — but not as much as in counties with fewer energy jobs, which might seem puzzling.
That's at least partly because of how an energy job and a high-energy county were defined in the study.
Tulsa County, for example — Tulsa, long known and still known in some quarters as the “Oil Capital of the World” — was not considered a high-energy county. Front-office and many other white-collar jobs that people consider oil-and-gas employment are classified as general management in federal studies.
The grouping of Tulsa County with non-high-energy counties alone could explain the puzzle. Home prices there increased at a greater rate during the five-year period than in Oklahoma County, which was grouped with high-energy counties.
Where the houses are
Comanche County, where Lawton home values also rose at a greater rate — mostly because of growth at Fort Sill — also was classified as a non-high-energy county in the federal study.
“These three metros have to account for nearly two-thirds of the total housing stock in the state,” said Chad Wilkerson, economist and Oklahoma City Branch executive of the Federal Reserve Bank of Kansas City.
Keeping Tulsa and Comanche counties — especially Tulsa — from the high-energy group was probably enough to explain why homes in high-energy counties didn't perform as well as others, he said.
The Federal Housing Finance Agency included the special look at the stability of home prices in eight oil-and-gas-producing states in the years since the national housing bust as part of its third-quarter Home Price Index report released Monday. The FHFA regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.
FHFA grouped counties in each state based on whether 2 percent or more of the counties' labor force was employed in mining or oil and gas extraction.
The agency then calculated the 2006-2001 change in home prices based on single-family sales involving conforming, conventional mortgages bought or securitized by Fannie Mae or Freddie Mac — no jumbo loans or cash purchases.
Home prices in counties with the higher energy employment outperformed the other counties in every state but Oklahoma. Here, high-energy counties saw home price gains of 4.8 percent while the other counties saw better gains of 5.3 percent.
Statistically, it was close. Oklahoma was the only one of the states where the difference was less than one percentage point. FHFA principal economist Andrew Leventis said the small numbers the agency had to work with in Oklahoma probably played a factor in making the state an outlier in the study.
The FHFA also looked at Alaska, Louisiana, New Mexico, North Dakota, Texas, West Virginia and Wyoming. None of the state saw a drop in home values in high-energy counties.
North Dakota, where Oklahoma-based Continental Resources Inc. is the leading oil producer in the prolific Bakken Shale, saw the greatest increase, 39.6 percent. New Mexico had the least increase, at 1.9 percent.
Just two of the states saw a drop in home values in non-energy counties: New Mexico, at 8.2 percent; and West Virginia, at 4.1 percent.
Leventis said FHFA decided to look at home prices in the energy states because they “sort of jumped out in the data.” He called the gains in North Dakota “extraordinary.”
He said it deserved a special look because the boom in the energy sector, unlike come-and-go booms in farm commodity prices, is based not only on increases in oil prices but expanded production from the use of new extraction technologies.
The findings shouldn't be a surprise for Continental Resources. The company, based in Enid but moving to Oklahoma City this spring, has been dealing with strains in North Dakota's economic infrastructure almost since it took the lead in the Bakken Shale. Hotels fill as soon as they are built and crews are housed in portable buildings at drilling sites. In addition, Continental is a leader in new drilling technologies such as multiunit wells with horizontal drilling extending laterally thousands of feet.