It's Time For Some Remedy

The Oklahoma City housing market has a fever, but there is a cure.

posted Apr 17, 2008 by Jeff Click

I think the Oklahoma City housing market has a fever. Unfortunately, the cure ain't "more cowbell." However, a good ol' fashioned spoonful of truth would do the trick.

I'm one of those builders who likes to spend quite a bit of time in his furnished model home. So much, in fact, I office there on weekdays, and then give my sales staff one weekend off a month so I can cover the model for the weekend. I like keeping track of the vital signs of our market, and the best way to do that is to talk face to face with those out shopping for new homes.

Five...maybe even as recent as three years ago...I'd say the ratio of what we call "tire kickers" vs. true buyers in the market was maybe fifty-fifty on any given Saturday. Now, I'd say I have the "best" traffic I've seen in my decade as a builder. I say "best" because the ratio has changed dramatically to a majority of true buyers out looking. That proves to me there is definite demand alive and kicking in the market for new homes. That's the good side of it.

Where it gets challenging is that more recently in my conversations with these prospective buyers, I often hear comments like:

  • "We're definitely in the market to buy. We're just not sure it's a good time right now."

  • "I have a great job, I have good credit, and can afford a payment. I'm just hearing it's tough to get a loan right now."

  • "We're ready to make the move, but we have a house to sell first, and we hear it's tough to sell right now and not lose money."

I'm reminded of the old notion that if you hear something enough, it will become true, even if it's really false. I'm certain that's what's happening here. We're on the verge of experiencing a self-fulfilling prophecy.

You see, we're in an age of new media. No longer is the local tv news or the community paper our only source of information. No longer is news delivered...or perhaps it's more that it's no longer full stories. It's headlines and first-paragraphs. Consumers don't have the time or attention span to dig deep into the facts and think critically about what they're consuming. It's understandable. Heck, I'm even that way. Where that becomes dangerous is when it begins to shape our outlook on something, thus creating an alternative reality by which we form our opinions, build our world-view, and make life-affecting decisions upon. But hey, I'm just a builder, not a philosopher.

When it comes to the Oklahoma City Metro housing market, it seems people are reading the headlines of stories whose facts and projections are based on numbers and statistics from the major "bubble markets," which are now correcting in a big way, and just assuming that it all holds true here. In a sense, it's a "Real Estate Market Hypochondria," as I call it. Combine that with the all the stories of foreclosures due to sub-prime loans and ARM resets, and now we've definitely got a virus afoot.

There is where the fever is setting in.

It's time for some remedy, friends, and a good, healthy dose of the facts is just what the doctor ordered. Don't let the national media scare you out of the smartest move you can make.

I hope you'll take two of these and call me in the morning.

Note:This post was originally written for and published on the COHBA "Defy The Trends" blog.

Jeff Click a builder and owner of Jeff Click Homes, L.L.C. He currently serves as the First Vice President of COHBA, and will serve as President in 2009.
He appears in the "Timing" video for

Prime Time, But Not Sub-Prime

Why the so-called mortgage crisis shouldn't affect your desire or ability to buy a new home

posted Sep 28, 2007 by Jeff Click

Open any national news paper, web site, or business magazine and you're likely to find a story about how the real estate market is suffering and the mortgage industry is in crisis. "Suffering", "crisis", and "meltdown" are pretty sensational terms, and they certainly catch people's attention. That's the point when you're trying to sell publications. Not all real estate markets are suffering, however, and just because the mortgage industry is correcting doesn't mean that you aren't still able to find a great loan at a great rate to help you buy a great home.

Oklahoma City is now one of the hottest real estate markets in the country.

Remember the adage that the most important factor in real estate is "location, location, location." Fortunately, the Oklahoma City real estate market is currently one of the few great locations to be buying a new home. Many respected national publications recognize that because of OKC's low cost of home ownership, combined with its continued solid performance in property value appreciation, now is one of the best times to buy a new home in the metro. Real estate investors are also cluing in on the investment value of our market. Our local media is recognizing it. Maybe you should, too.

The mortgage industry is correcting, not dead.

Don't let sensational journalism scare you into thinking that you simply can't get a loan anymore. Given the strength that OKC's market still enjoys, anyone with adequate income and satisfactory credit is still able to qualify for a loan with a great rate just as easily as ever.

Constance Ladd one of JCH's preferred lenders, is a loan officer for Coppermark Bank, and according to her, "Our region has less implications because we are in a very conservative market and our market values appear to be much more in line economically." The would-be buyers being affected by this correction in the lending industry are ones that required a "sub-prime loan" to qualify to make the purchase. According to Constance, these loans were "allowing inexperienced borrowers to purchase bigger homes on "ARM" loans with prepayment penalties assigned to their loans." Many of those buyers probably shouldn't be buying in the first place.

Here are a few tips that may give you the encouragement you've been needing to take the first step in buying your next new home:

» Don't assume your credit prevents you from being able to buy. Just because you don't have perfect credit doesn't mean that you can't qualify for a loan today. Often minor credit defects can be corrected or adequately explained and excused by your lender.

» Now more, more than ever, is the time to use someone local. In a volatile market, it's important to have a go-to person to call and discuss your situation in regard to what's happening in the market. Having a direct link to your lender allows you to hold them accountable, which means better service. Constance adds, "Home buyers should always go to their local lenders to collect information to start the prequalification process. They should find out what type of safe loan programs are available that would fit the needs of their family, not the neighbor's family," or the family elsewhere in the country that nation-wide programs broadly target.

» If a deal sounds to good to be true, it likely is. Don't get caught up with on-line lenders who promise small payments and low rates. There are often lots of hidden down-sides to such programs, if the programs exist at all anymore. According to Constance, "The average home buyer should be cautious about the type of loan presented to them. Also, that the monthly payment would fit the family budget prior to house shopping."

Constance adds, "Never put off what you can afford today. Interest rates are still in the all time lows and there are still great finance options to choose from." So if you've been on the fence about whether or not you're able to make that leap into investing in your future through the purchase of a new home, get in touch with us. Both Jeff Click Homes and Constance will be glad to help you make it possible.

Buy Now, Buy Low, & Sell High

Why the national media says now is a prime time to buy in the Oklahoma City Metro

posted Jul 24, 2007 by Jeff Click

Not even industrial-strength Windex can help in trying to wipe the smile off my face when an out-of-state buyer walks through the Jeff Click Homes Furnished Model Home in Silverhawk. It's something that we who have lived in Oklahoma City all our lives take for granted, but one of the many things that anyone moving here absolutely loves: the extraordinarily low cost of living and just how far the dollar goes here towards the purchase of a new home, when compared to other areas in the country.

Jeff Click Homes is custom building a home right now in Sonoma Lake IV for Steve & Susan. Now that Steve's retired, they're making the move here from San Diego to be closer to their kids and grandkids. They bought their former home in San Diego in 1971 for $27,900. It was a modest, middle-class California home with a nice back yard and a swimming pool. In 2006, they sold the home for exponentially more than what they paid for it 35 years ago!

So what does a retired couple from San Diego who spent over three decades in a 1500 square foot home buy when they move to Oklahoma City? Steve says the answer is, "Our dream home..." to retire in and to enjoy time with their children and grandchildren. Steve isn't kidding about enjoying the grandkids, either; he was in our model yesterday with his grandson and I'm not sure which one was the kid!

Their new home is our Luke Plan, which is 600 square feet larger than their previous home, includes a 3-car garage, and a glorious back yard view of the waters of Sonoma Lake. Larger house, all the latest amenities, a lot with a spacious covered patio view to die for, and you know what it's costing them here in Oklahoma City? Right at half of what they just sold their smaller home in San Diego for.

You couldn't wipe that smile off of Steve's face, either. Steve says he's fortunate he sold when he did, though. Prices are now falling in California, along with all of the other formerly-hot markets around the country, including those in Arizona, Nevada, and Florida.

So what does this mean for someone debating about making a new home purchase, but who already lives in Oklahoma City? Despite all of the negative press that housing is receiving around the country, is there money to be made in the Oklahoma City Real Estate Market? You bet there is, and plenty of it.

But don't take my word for it.

Forbes recently made Oklahoma City its pick for second-best housing market in the country, based on the city's average annual home value appreciation rate of 12.1% That's twelve dollars a year for every hundred you put into a new home! The gold standard for many investments is a 10% return, and that's putting your money towards something you typically don't get to receive any use or enjoyment out of, like stocks, mutual funds, and IRAs!

Why not invest in something that's going to perform for you while you get to enjoy it? Even with 100% financing at a 7% interest rate, you're still making 5% on someone else's money!

Money just ranked Oklahoma City among its "11 Bust-Free Markets," and has placed Oklahoma City on its list of the most affordable housing markets in the country. When you combine one of the lowest costs of home ownership in the country with one of the highest annual appreciation rates anywhere, you have a rare "Buy Low, Sell High" opportunity that anyone can take advantage of.

So maybe you can't make what Steve & Susan made off their home in San Diego over 30 years. But no one is making that money in California now. Yet here in Oklahoma City, where the economy is strong, job growth continues, and interest rates are low, you can count on healthy returns on your investment in a new home. Time is money. The time to buy is now.

Need more convincing? Check out 10 more reasons why now is the time to buy a new home in Oklahoma City...

Fireworks Gone, Boom Still Echoes

More explosive data showing Oklahoma City Metro real estate is a sound investment

posted Jul 9, 2007 by Jeff Click

While the 4th Of July and all the fireworks have come and gone, there's still a boom that echoes through the Oklahoma City Metro. Several recent stories from major national magazines have noted Oklahoma City as being a stand-out among the strongest housing markets, all but guaranteeing that the Metro is no dud when it comes to home ownership.

Until recently, most national news stories on the topic have painted a bleak picture of the real estate industry as a whole, which in my opinion has led many in the buying public locally to an inaccurate conclusion about housing here. In an effort to fire back at those reports that don't hold a candle to what's really happening in our market, I've pointed out several times in recent months both in the Jeff Click Homes Blog and in quotes in the media regarding how the Oklahoma City Metro, including Edmond, enjoys a unique position over other comparable, and even larger real estate markets around the country. Given the explosion of urban renewal taking place in the city, which has bolstered the city's economy and sparked the interest of many major companies looking to expand into new territories, along with our already low cost of living, these recent dazzling reports on the investment opportunities here come as no shock.

Just last month, Forbes gave OKC the nod as the 2nd best housing market in the U.S. based on average property appreciation, which is just over 12%. Money magazine ranks Oklahoma City as the 39th most affordable housing market, a ranking of 6th place in our region.

Perhaps most importantly, in consideration of how other housing markets are suffering from a recent slump, Money lists Oklahoma City among its "11 Bust-Free Markets". As one of the few markets in the country still enjoying double-digit gains in property values, it's nice to finally see OKC and other strong markets receive some national recognition for bucking the trend.

So while the fuses fizzle out in other markets around the country, stand back when it comes to OKC. Sparks are still flying. The question is, will the fireworks be happening in your portfolio, or will you just be watching the show from afar?

» Blog Post Bonus: Chat Log From JCH Staff Brainstorm Session For This Post

Jeff: You both here?
iChat: Pam Bradford has joined this chat.
Pam: Are we still on the headline?
iChat: Jonathan Youngblood has joined this chat.
Jeff: Headline: Fireworks Gone, Boom Still Echoes
Jeff: Subheadline: Even more data showing Oklahoma City Metro real estate is a sound investment
Jeff: Opening line: While the 4th Of July and all the fireworks that come with it have come and gone, a boom still echoes through the Oklahoma City Metro.
Jeff: Let's think of all the toungue-n-cheek phrases we can play on here.
Jeff: I've already used the "sound" investment, echo, etc.
Jeff: What else can you guys think of to spice this up?
Jeff: Not necessarily headlines, but in the article. Cliche's, plays-on-words.
Jeff: Doh. I used an apostrophe on "cliches".
JohnnyY™: i thought you were joking earlier with the "more data showing that..." part
Pam: Fireworks, pops, exploding,
Jeff: Well, help me re-write it!
JohnnyY™: Flashes, sparks, dazzle
Jeff: Maybe the types of firecrackers.....exc
JohnnyY™: no, i think it's good
Jeff: Give me more words and phrases.
Jeff: Homes 'er poppin like lady fingers here in OKC!
JohnnyY™: haha yeah i was trying to think of a way to work in roman candles
Jeff: Send a flare...
Pam: An explosive market....
Jeff: Sending a flare to buyers that OKC needs no rescuing from a bubble that's burst elsewhere in the country...
Pam: Lighting a fuse.
JohnnyY™: igniting....uh......something
JohnnyY™: I was going to say something about a dud or fuse that hasn't stayed lit...
Pam: sparking interest
Jeff: Nice.
Pam: Maybe something about smoke bombs trying to screen the true residential market
Jeff: Oooh, nice. The effect of the nat'l media.
JohnnyY™: haha something about dodging shrapnel from, like, the fallout of, like, a falling market
Pam: that's good

Are The Numbers Lying?

More evidence now is a great time to buy new in the Oklahoma City Metro

posted May 31, 2007 by Jeff Click

I've begun carrying a bullhorn that clips onto my belt. It's the one I use to shout from the freshly-decked roof tops that the sky is not falling in the Oklahoma City Metro real estate market despite what is happening in other major, more coastal markets in Florida, California, and Arizona. I've commented many times both here, and in numerous stories in the media that new homes are still a solid and reliable investment in the Oklahoma City Metro, thanks to how unique our market here really is. With job growth strong due to new companies moving into the area, wages up, unemployment down, interest rates still at all-time lows, and an astoundingly low cost of living, it doesn't get much better than OKC as a place to live. But if you pay attention to what the national media is reporting about other markets and assume the same applies here, you're missing the trees for the forest, not the other way around.

Don't just take my word for it. Read what the local analysts have said just this month...

The Greater Oklahoma City Chamber of Commerce published an independent report, "State bucks trend; strength projected in home building," which reports double-digit growth for housing construction in many areas in the Oklahoma City Metro. The article points out that true numbers reveal that more metro-area building permits were pulled in February 2007 than in the same month of the past few, record-setting years, "which is a sign that Oklahoma is bucking the national trend," to quote the article.

This week's Oklahoman Business section carries two headlines "Oklahoma housing prices rise above expectations," and "Home Prices Increase," both of which provide more hard numbers supporting this interesting phenomenon we're experiencing. Sure, the number of permits being pulled in some recent months suggest that our market is finally catching it's breath, and honestly, I welcome that. Record numbers cannot be sustained forever, and what's happening now is what should be happening. It's long overdue.

What should matter, though, to anyone considering the purchase of a home is what is happening to property values, and which is the smarter buy: a used home, or a new home?

While other markets are experiencing a decrease in value of real estate, known as depreciation, the Oklahoma City Metro continues to enjoy healthy gains. To take it a step further, new homes appreciate at a greater rate typically than older, used homes over 7-10 years old, which is when appreciation most often plateaus.

So while more existing homes make their way to the market with attractive price cuts, as a buyer, ask yourself which is better: A used home with someone else's dirt and who-knows-what-else on the carpet, that you may feel, at least for a while, like you got for such a steal, but when in reality you just de-valued it by buying low, or...

A brand new home with the latest amenities and lower cost of ownership thanks to energy efficiency, that will enjoy healthy gains in value (earning you money) in our uniquely strong market, especially as other new homes are built around it?

The choice is obvious, so long as you look what is happening here, in our market. New homes in the Oklahoma City and Edmond areas continue to remain a solid investment, and the numbers aren't lying.

Providing the As to Executive Qs

On being featured in the Oklahoman's Executive Q&A Column

posted May 21, 2007 by Jeff Click

I recently had the opportunity to provide some comments on the local real estate market, how the national media is affecting sales, how increases in the price of oil is affecting the price of homes, and the latest in home technologies in a recent Executive Q&A column in The Oklahoman.

A few excerpts from the column...

On the national media: With so much negative news being reported in the national media about the real estate market, blanket statements that really only apply to larger markets are being interpreted to also apply to smaller markets like ours, when in our case, that negative news certainly doesn't apply.

On our market: I believe our market is unique in that it is insulated from the extreme fluctuations, both positive and negative, that other major markets are subject to.

On technology: Some think that CFL bulbs, which are compact fluorescent bulbs that work in replacement of less efficient and traditional incandescent bulbs, are the next big thing. I don't think these will prevail because while these bulbs are indeed more energy efficient, they do contain mercury, which can be both a health and environmental hazard.

I also had originally stated that I believe that CFL bulbs will be the "8-track of lighting". While this didn't make publication, I wanted to get it on record here!

Also of potential interest, I participated in a recent NBC Nightly News story entitled "Give me that online religion"

Sunshine And Thawing

Bringing back some warmth to the market

posted Feb 27, 2007 by Jeff Click

I find it interesting how often "numbers" don't really mean anything. In an era when information and data rule, careful analysis is sometimes left by the way-side, causing many to draw inaccurate conclusions that lead to decisions based on erroneous information. This can be true whether the numbers indicate something positive or negative.

I've made several posts over the past few months making the case for how strong the Oklahoma real estate market really is, despite negative national stories stating otherwise. What I haven't addressed is what recent data are suggesting about the Oklahoma real estate market. In January 2006, there were 483 permits for new homes pulled Oklahoma City metro, compared to just 271 in January of 2007, a decline of 44%. Just by numbers, that seems like a bad thing. Richard Mize, Real Estate Editor at the Oklahoman, filed a story in today's business section, headlined "Builders hope sunshine will help thaw home sales", which speaks to that very issue.

As I'm quoted in the article, there are legitimate, healthy reasons for the decline in permits in January 07 when compared to January 06. This time last year, we were experiencing a record demand from home buyers. Just meeting that demand alone accounts for part of the number of permits pulled. Record demand also bolsters confidence among builders, which caused many to ramp up production of "spec" homes, which are homes that are started in speculation of a buyer. Record demand plus record confidence equals record permits being pulled.

Here we are in January of 07, facing a number of factors that have legitimately lead to a reduction in the number of permits pulled in comparison to this time last year:

» The record demand in January 2006 is now cooled to strong, but reduced levels in January of 2007. There are fewer buyers in the market, therefore it's expected that permits should be down.

» The third quarter of 2006 experienced a slowdown in the demand for new homes across the nation. Because the market demand cooled, builders were left with more un-sold inventory and have been waiting until inventory is reduced before pulling permits for new starts.

» The cool-down also corrected an over-confident industry, which is now behaving more conservatively and responsibly in producing new inventory going into 2007.

» We've had unusual winter weather this year, with nearly 5 weeks of ice and snow affecting both construction and the ability for buyers to spend time shopping for their new home (Which is one reason why we put so much effort into a great web site). When homes can't be built or bought, permits aren't being pulled.

When you combine these three factors, it makes sense that "the numbers" are considerably lower. This isn't bleak, this is just reality, and it's a good thing for our market. Supply is now more in line with demand, which will further stabilize and protect property values. That's good for buyers, home owners, and builders alike.

The Oklahoma City metro real estate market remains healthy, and it's a great time to buy a new home particularly in Edmond, Oklahoma City, and Deer Creek.

Unfazed By The Slump

Oklahoma shines when other markets falter

posted Feb 15, 2007 by Jeff Click

I've said many times that the Real Estate market in the Oklahoma City Metro is both strong and resilient compared to more volatile markets elsewhere in the country. National news stories that have made their way into our local news via the AP have unfairly and inaccurately cast a dark, gray sky over the heads of builders and sellers here in the area. Yet those who look beyond their newspaper or computer screen will find that there is, and always has been, a glorious break in the clouds overhead, and finally more local media outlets are letting the light shine through, confirming that it's a great time to buy a new home in Edmond, Oklahoma City, and Deer Creek.

Despite recent reports to the contrary, Kelley Chambers penned a story in today's edition of The Journal Record,"State nearly unfazed by U.S. housing slump", <Syndicated Link> which relies on actual numbers verifying that our market is alive and well despite the conditions elsewhere in the country. The story is based on this press release by the Central Oklahoma Home Builders Association:

Local Homebuilding Market Remains Solid Despite Forecasts

(February 9, 2007) OKLAHOMA CITY - Listen to West Coast homebuilders or East Coast real estate publishers lament the decline of the home building industry and you'd probably believe that Oklahoma couldn't be far behind them. Far from it.

"The Oklahoma City market ended 2006 at a strong pace as compared to the last two years," said Caleb McCaleb, Central Oklahoma Home Builders Association President.

According to homebuilder Jeff Click of Jeff Click Homes, the Oklahoma City market is resilient to the sharp trends seen in the national home building industry.

"The Oklahoma City real estate market is fortunate in that it's insulated from many of the adversities that major markets around the country - especially the coasts - are subject to," Click said. "As a result, we don't experience the extreme fluctuations they often do."

Since building permit numbers increased though the end of 2006, both Click and McCaleb believe 2007 will be a strong year in the building market.

"I see 2007 at over 6,000 permits for the Oklahoma City metro area and outlying areas," McCaleb said.

With a solid economy, relatively low cost-of-living, generally affordable housing market, and the rehabilitation and revitalization of Bricktown and older neighborhoods in the Midtown area, Oklahoma City is becoming a serious draw for a new generation of business people. And it's anticipated that other industries associated with the real estate market will also benefit as a younger generation migrates into the metro area.

"With the success our city is having in attracting young professionals from other, larger markets, I believe we'll also see an increase in demand for style and interior design," Click said.

Competitive interest rates have also helped spur Oklahoma City's growth. Homebuyers can expect an interest rate of 5.75% on a 15-year mortgage, or a 6% rate on a 30-year note.

With building permits on the rise and attractive interest rates, the Oklahoma City market has separated itself from the national trend in the home building industry. The market is stable and only expected to grow in 2007.

"We can still say that it's a great time to buy in Oklahoma City," Click said.

For more information regarding the housing climate in the Oklahoma City market, visit or contact the Central Oklahoma Home Builders Association at (405) 843-1508.