Both monthly and yearly numbers for local home construction in Tulsa slipped in August. 215 homes broke ground last month. This number is slightly lower than the 271 homes breaking ground in July and the 231 homes that broke ground in August 2013. Tulsa’s current year-to-date total of 1,907 new homes built is 4.1% lower than the same total from this time last year.
This decline is reflective of a national slowdown in the housing market. According to the U.S. department of Housing and Urban development and the U.S. Census Bureau, 643,000 single-family homes have been built thus far in the United States in 2014. Single-family housing starts have dropped 2.4% nationally from last year’s numbers.
Even so, National Association of Home Builders Chairman Kevin Kelley chooses to remain optimistic in spite of the slowdown. Kelley states that “Our members are telling us that traffic to new model home sites and sales expectations are on the rise,” said “Despite the monthly blip, single-family starts are still 8 percent above last year’s level.”
Home Builders Association of Greater Tulsa president Brandon Jackson offers some insight into possible causes of the slowdown. Jackson suggests that “people were anticipating interest rates were going to rise, and now they haven’t, that may have cut off enthusiasm for a new home.”
Veteran contractor Phill Rhees, of BMI Next Generation Builders, thinks that the slowdown might be a good thing. “We don’t want to overbuild,” he said. “The economy is recovering, but we don’t want to get too far ahead of the recovery.” Despite stronger economic recovery, homebuyers are still cautious of the housing market, and this caution is keeping the market numbers down.
According to Rhees, some areas in Tulsa have already become overbuilt. “We’re seeing some parts of town where we’re having a hard time finding land to develop on, such as Jenks east of the river,” he explains. Upscale areas in Broken Arrow and South Tulsa featuring homes costing $500,000 or more have exceeded their saturation point in the market. The lack of available land that is well-situated and easily developed is also a stumbling block to the residential construction market in Tulsa.