Oklahoma City homebuilders built more houses last year than in nearly a decade despite clouds of uncertainty.
• A global pandemic that couldn't tamp down the effect of persistent, historically low mortgage interest rates.
• An unexpected surge in demand amid a housing shortage, civil unrest and a wild presidential election year.
• A two-headed lumber price spike — in September and again in December — plus other rising costs and supply chain disruptions.
• All the while responding — with new floor plans and designs — to both the stay-at-home movement and the stuck-at-home blues.
"The pandemic has caused a renewed sense of home as a sanctuary, and a shift to the suburbs away from high-density options such as apartments is keeping everyone in the new home construction industry busy," said Shawn Lawrence, vice president of sales and acquisitions for TimberCraft Homes.
The year 2020 saw "a demand for new homes that we haven’t seen before in this market," said Erin Yarbrough, director of marketing for Ideal Homes & Neighborhoods, in Norman. "Working and learning from home created new needs for homes and neighborhoods: home offices, learning spaces, playrooms and outdoor neighborhood amenities."
It challenged long-held assumptions about "home" and "workplace," which brought changes to both the form and function of space in a house.
"An extra room that can be used as a home office or other type of flex space is currently of utmost importance to most of our homebuyers," said Devin Holloway, vice president in Oklahoma City for D.R. Horton, a national homebuilding company based in Arlington, Texas. "We don’t expect this trend to change anytime soon, and as a result, many of the floor plans we offer have more than three bedrooms to allow for the additional space and flexibility our homebuyers desire.
"As always, affordability is key, and we’ve seen many buyers looking to get out of apartment homes in the interest of having additional space for their families while spending more time at home."
The building business boomed.
"We experienced tremendous growth with some of our local builders having record-setting years," said Andrew French, who was 2020 president of the Central Oklahoma Home Builders Association. "Overall, I'd say this is one of the best years on record, especially as we were apprehensive heading into election year. Then, with the onset of the pandemic, we were able to work at the local, state, and national levels to keep construction on the essential business list — a major highlight for the year."
Oklahoma City-area builders started 6,024 houses in 2020, an increase of 12.3% from the year before, according to Norman-based Dharma Inc.'s Builder Report. Dharma tracks construction in Oklahoma City, unincorporated Oklahoma County, Bethany, Blanchard, Choctaw, Edmond, Midwest City, Moore, Mustang, Newcastle, Noble, Norman, Shawnee and Yukon.
The busiest builders, according to Dharma, were Homes By Taber, which started 821 houses, followed by Rausch Coleman Homes OKC with 548; Ideal Homes & Neighborhoods with 546; Moore-based Home Creations with 506, and Dr. Horton Inc., a national builder based in Arlington, Texas, with 198.
The most active neighborhoods were all in the Oklahoma City limits: The Grove, to the northwest, with 159 new house starts, Summerhill (near Yukon) wth 134, Saratoga (near Yukon) with 125, Brookstone Ridge (near Mustang) with 122, and Lone Oak East, northwest, with 116.
Low mortgage rates fueled housing like never before in 2020 with both purchasing and refinancing. The average rates dropped more than one percentage point over the year, ending Dec. 31 at 2.67%, another record low, with less than a point paid for closing costs and fees, according to Freddie Mac.
The power of low-cost financing was not lost on homebuyers, said Lindsay Haltom, director of marketing for Homes by Taber.
"With all of the uncertainty in the world, something that buyers can be certain of is that low interest rates means they can qualify for a higher mortgage. 2020 showed buyers that they wanted more out of their living space, and the interest rates provided the perfect storm so they could achieve that," she said.
Thinking about buying in 2021?
"Don't wait," French said. "Whether building a custom or buying a spec home, don't wait. The price increases on materials have been catching buyers off guard, which leads to projects being put on hold. Plan accordingly and don't wait as pricing on materials doesn't look to be decreasing any time soon. Now is the time to buy with record low interest rates, so again, don't wait."
Haltom said that despite the strength of the market in general, rising costs and supply difficulties could hurt some builders — and their customers.
"Don’t settle for a builder," she said. "Buyers should do their research to make sure they are getting what they deserve in (a) home. With the challenges that other builders are facing right now, the builder they selected may not be around to service their warranty issues after they close. Even though the housing market is in a good place with sales, builders are getting hit hard with material costs that could easily cause them to shut their doors later on."
Looking ahead, the 2021 president of the Central Oklahoma Home Builders Association, Yukon builder John Nail, said he and his colleagues have their work cut out this year — for themselves and their customers.
"Continued supply chain issues and keeping building costs down will continue to be a challenge in 2021: increased building costs, which impacts the final cost of the home, which then impacts affordability," Nail said. "As home prices increase due to cost, it begins to price homeowners out of home ownership."
Real Estate Editor Richard Mize edits The Oklahoman’s Real Estate section, and covers housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com. Contact him at email@example.com. Please support his work and that of other Oklahoman journalists by purchasing a subscription at http://oklahoman.com/subscribe today.
Original article can be found here.