Oklahoma City isn’t always recognized for its ability to keep up with national trends, but there’s one trend it’s keeping pace with: the severe shortage of entitled lots for residential construction. Accompanying this shortage are record-high prices for A and B grade lots.
According to a report presented by Metrostudy, the housing research division of Washington, D.C.-based Hanley Wood company, “Lot production is increasing, but it is not increasing as fast as home construction.” The report, which was recently presented at the National Association of Real Estate Editors annual conference, went on to add that, “Lot shortages will continue to be a significant issue for the builders all year.” Metrostudy spokesman Brad Hunter acknowledged that there are buildable lots available in the city, “but not where builders want to build and people want to buy.”
The last time that OKC-metro builders faced this level of lot shortage coupled with rising prices was in the third quarter of 2012. That year marked a recovery period in the OKC residential construction market, which had reached a low point in 2009. However, even OKC’s low point was significantly less dire than the home building crash that raged from 2007-2009. This is because the city had also missed out on the home construction bubble that swept the rest of the nation form 2004-2006. The recovery was easier because there was less to recover, but in the meantime housing prices lowered but didn’t bottom out, and foreclosure rates rose but didn’t explode.
According to David Weekley Homes CEO John Johnson, consumer confidence is key to a healthy residential construction industry, and much of that confidence is based on employment levels. The resurgence in construction now growing in the OKC market is due to low unemployment rates, a relatively strong local economy, and the revitalization of the energy business.