Oklahoma City homebuilders ring in ... 2003?

Building permits are up across most of the Oklahoma City metro area, but with a fourth of the year behind them, homebuilders worry about low appraisals and rising materials costs. Realtors are still seeing strong sales, especially in Edmond.
by Richard Mize Modified: May 3, 2013 at 11:32 pm •  Published: May 4, 2013
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It doesn't have much of a ring to it, but metro-area builders are building like it's 2003.

They took permits to build 1,282 houses in the first quarter of this year in Oklahoma City, Edmond, Midwest City, Moore and Norman. That's up 16.4 percent compared with the same period last year and is comparable to the 1,249 permits issued the first three months of 2003.

The year 2003 wasn't a boom year, although by the end of the first quarter it was better than the year before — and a big improvement over 2001 and its short and shallow recession.

The first quarter of this year is no boom, either, although it seems like it compared to the slump that hit here when housing crashed across the country with the Great Recession of 2007-2009.

“We've recovered. The slowdown is behind us,” said Robert Crout, president of the Central Oklahoma Home Builders Association.

Lots ready for construction remain in short supply, he said. Planning and development came to a stop during the worst of the building slowdown. Now that builders are busy again, developers have been slow to get land ready for construction, partly because lenders are still leery of lending.

Also, property appraisals, Crout said, are still lagging behind the cost of building.

Labor shortages plaguing other parts of the country where housing is in recovery never occurred here because builders just slowed down during and after the recession. Homebuilding didn't stop altogether, so framers, drywall installers, masons and other subcontractors didn't leave. But Crout said recovery is pushing materials costs up for builders everywhere.

With appraisals coming in less than what builders have to get to make a living, builders have few options, he said.

One is to absorb the cost increases, which no builder can do for long. Another is to cut back on the building bang a buyer gets for a housing buck — in other words, fewer frills, extras and amenities. Crout, a Mustang land developer, said the appraisal gap has some builders going back to basics.

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by Richard Mize
Real Estate Editor
Real estate editor Richard Mize has edited The Oklahoman's weekly residential real estate section and covered housing, commercial real estate, construction, development, finance and related business since 1999. From 1989 to 1999, he worked...
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