By Michael Kinney
Tia Payne has been in the real estate game for more than 20 years. Located in Norman (Ok.), just south of Oklahoma City, she has watched the market endure some very interesting times.
However, Payne says none of those compared to the wild ride the housing market has been on in 2021. She is seeing actions take place that she’s never witnessed in her two decades in the business. That includes home buyers paying the closing costs and the difference in appraisals.
“If the house does not appraise, some people are paying a certain amount. I made my clients cap out at $5,000 because I don’t want them to be way upside down,” Payne said. “A friend of mine brought $30,000 to the title company and half of that was because they had to pay the appraisal difference.”
The ability to purchase a home throughout the nation has become an almost impossible task in recent months. With rising costs and a shrinking inventory, potential homebuyers can find themselves at wit’s end as home affordability continues to rise beyond the reach of more and more Americans.
The national medium existing-home price hit an all-time high in May at more than $350,000.
The typical home value of a home in Oklahoma is $148,986. That has increased almost 10 percent from a year ago.
For those trying to rent, it’s not any better. With 42 percent of families in Oklahoma County being renters, they are averaging close to $850 a month in rent.
The situation has become even more frustrating for low-income and working-class households who may spend more than half of their total on housing.
Despite the rise in prices, homes are being snatched up as soon as they are being listed.
Several different factors seem to be contributing to this phenomenon. They include people moving to the area due to the cost of living being lower than other parts of the country.
“I’ve noticed a couple of my past clients who had moved to other states, their jobs are transferring them back,” Payne said. “I want to say this started during the past year. I did have quite a few people contact me last year that were moving back, and were looking for rentals because they weren’t sure where they wanted to move to.”
Another factor playing into the lack of homes for sale is that first-time homebuyers have been taking advantage of low-interest rates and gobbled up homes.
Matt Reynolds is one of those Millennial first-time home buyers. He and his wife had been living in an apartment in downtown Oklahoma City for the past couple of years paying $2,900 a month for a two-bedroom, two-bath condo.
Reynolds said they were going to stay put in their apartment when their lease ended last year. But when they started looking around and saw that it was cheaper to buy a house, they made the move.
Reynolds now makes a $1,400 mortgage payment on a three-bedroom house in a suburb of Oklahoma City.
Reynolds said if he had waited a few more months, the house would have been sold and off the market.
Yet, Reynolds said he was tempted to put the house back on the market after seeing its value had risen more than $20,000 from what he paid less than a year ago.
“We haven’t done anything to it. It’s not like we have some dramatic remodeling,” Reynolds said. “It’s great if you sell a house right now for $20,000 over the value. But that just means whatever your buying is also over value.”
According to Walter King, an 81-year-old veteran who lives 40 miles south of Oklahoma City, he has continually been getting cold calls and postcards from realtors asking him if he wants to sell his house. He has never shown any interest in trying to sell, so he figures they must be really desperate to contact him out of the blue.
King also has no interest in selling his modest 3-bedroom, 2 bath home because he knows it will cost him even more to buy something similar in today’s market.
Because home-owners are holding onto their properties and new homes aren’t being built at the rate they were in the past, it has created an unpredictable housing market.
“So for instance, one listing I had in Norman, I literally put it on the market. The agent sent me an offer, and this is a military family, and they had lost out on eight other houses,” Payne said. “We were number nine. So, she set up the showing, sent me an offer, and then looked at the house to confirm to them that, yes, you want to buy the house. They made the offer before seeing the house because they had missed out on eight other houses. And with that property, they only paid $1,500 over the asking price. The majority of the people that are getting a house are offering over the asking price right now. I know for a fact that a person in my office, they got $10,000 over the asking price.”
For those who are looking to purchase a home in the near future, there is no consensus on how long the current market strife will continue. Some analysts see signs of it cooling down while others believe it could last into 2022 or even 2023.
“We’ve noticed the decline in inventory in 2019,” Payne said. “It’s been getting lower since 2019. Currently, it’s truly a seller’s market. It’s a great time to sell, because the market, you’re getting more from what your house is worth.”
Copyright Michael Kinney Media