Oklahoma City housing among nation's most affordable markets

Journal Record, The (Oklahoma City), Aug 10, 2001 by Ray Dozier

Oklahoma City ranks as the 10th most affordable home market in the nation, according to the 2001 Home Price Comparison Index released by Coldwell Banker Real Estate Corp.

The index study evaluates and indexes the average sales price of similar homes in typical middle management transferee neighborhoods in more than 300 markets across the United States.

The study revealed that Oklahoma City's average 2001 sales price was $134,225. Tulsa was listed as the most expensive market in the state, but only $50 more than Oklahoma City at $134,275. Oklahoma has the least variance between the most expensive and the most affordable markets.

Mike Jones, broker/owner of Coldwell Banker Mike Jones Co., said Oklahoma City has been blessed with having very affordable housing.

It does show our prices reflect our local economy, Jones said. We don't have very many union laborers on housing. We have a very low cost in land versus other metropolitan areas and we don't have as many restrictions put on by local and state authorities that puts a burden on land developers and builders.

Many communities have high costs, he said, such as water meters and sewers, which are passed on to the buyers in some of the other markets.

It's amazing how much front-loading there is to a land development and to a building because of the high cost of having to abide by all the environmental codes that other communities have.

According to the study, Minot, N.D., ranked first among affordable homes in the nation with an average sales price of $119,000 for 2001 and Palo Alto, Calif., was the most expensive market with an average sales price of $1.225 million for 2001.

The study reveals that residential real estate continues to be a healthy segment of the economy, as existing and new home sales figures have remained relatively strong throughout the first half of the year.

Only a few decades ago, mortgage-burning parties were commonplace - signifying the end of a homeowner's 30-year commitment, but in today's migratory society, families generally live in a home for about four to seven years before moving on, said Alex Perriello, president and CEO of Coldwell Banker Real Estate Corp. Our outlook on the real estate market is strong over the next five to ten years due to the steady rise in corporate relocation, sharp jump in single- parent families and the baby-boom generation achieving prime home- buying age, meaning they are supporting the 'move up' and second- home markets. Finally, the 2000 U.S. Census showed an increase in population of about 30 million, including recent immigrants who are buying homes as they realize the 'American Dream.'

Perriello noted that the increase in real estate spending is compound considering that for every dollar spent on home purchases, another 20 to 50 cents is spent on items such as furnishings, landscaping and improvements.

Overall, the housing sector accounts for about 14 percent of the U.S. economy and, on average, consumers spend about 40 percent of their income on housing and related costs, he said. All of these factors help support our belief that the real estate market is one of the few bright spots in today's slowing economy.

The average price of the study's subject home in the United States is $269,241, and out of 307 markets surveyed, 74 percent showed a price increase from last year. The subject home is defined as a 2,200-square-foot, single-family dwelling with four bedrooms, two and one-half baths, a family room and a two-car garage in a typical, middle-management transferee neighborhood.

Recently, factors such as stable interest rates and thriving regional and local economies have encouraged relocation to other markets despite the economic slowdown. Many factors such as differing salary, cost of living, taxes and housing prices affect what the same dollar can buy in different parts of the country. This year's Home Price Comparison Index revealed that eight of the country's 10 most expensive markets are in California and four of the 10 most affordable are within the Midwest.

The methodology used to compile the data included the surveying of hundreds of Coldwell Banker offices. Using the Home Price Comparison Index's indexing formula, consumers can calculate what their own home could be worth in another city. The index thus provides preliminary guidance for the affordability of housing within a market to aid a transferee's decision process. An online index calculator function can be found at www.coldwellbanker.com within the News Center, which provides the possible home values automatically.

Using the calculator to determine the value of a $100,000 home in Oklahoma City compared to the most expensive and most affordable markets, the home would cost $904,000 in Palo Alto and only $88,000 in Minot.