NORMAN — Recent data from a national real estate listings website reveals record lows in home listings across the U.S., a trend that holds true for the Oklahoma City metro area.
A Dec. 2020 housing report released by Realtor.com this week shows the number of homes for sale in the U.S. dropped under 700,000, the lowest amount ever recorded. Compared to December 2019, the number of homes for sale nationwide declined nearly 40%.
The Oklahoma City metro area saw a decline of just under 43% in the last year. Of the 50 largest metro areas in the country examined, the Oklahoma City metro was one of 31 metro areas with declines of more than 40% in active listings year-over-year.
In a news release, Danielle Hale, chief economist for Realtor.com, said while there has been an ongoing trend of home shortages the last two years. However, the low level from the December report is a combination of the usual holiday inventory slowdown and the COVID-19 pandemic buying trend, he said.
“Looking forward, we could see new lows in the next couple of months as buyers remain relatively active, but a surge of new COVID cases may slow the number of sellers entering the market,” Hale said in the release.
Hale said the data points to potential relief in the future, but consistent improvement in COVID-19 case surges will be necessary before the shortage will subside.
“We eventually expect to see improvements in the supply of homes for sale, especially in the second half of the year,” Hale said. “Until then, finding a home will continue to be a top challenge for buyers across all price ranges.”
Rob Schaerer, broker and associate at Norman’s Dillard Group Real Estate and 360 Realty, said he has had trouble finding houses for buyers throughout the year.
“I’m seeing more and more people now opt for the contingency route, where they’ll sell a house, and then as soon as theirs goes under contract, they buy another one,” Schaerer said.
With this method, Schaerer said buyers are opting to sell now and move into a rental before beginning the process of searching for their next house.
He said many people are taking advantage of the seller’s market. According to local Multiple Listing Services statistics, in December 2020, Norman houses averaged eight days on the market compared to 33 days in 2019, a 76% change.
Schaerer said the fervency of buyers has created a climate in which sellers don’t have to do as much remodeling or home updates to sell it at the same price they would have last year.
“There’s not enough houses for [buyers] to be as picky,” Schaerer said. “Under these conditions, with one eye on equity and the other eye on sanity, you don’t have to do as much to sell it.”
In the last year, MLS data shows that the median sales price for a house in Norman has gone from $184,000 to $202,500, a 10% increase.
While the demand has increased the price of homes, Schaerer said buyers are still able to get more square footage for their money with the low interest rates.
“Someone that bought a house for $110,000 five years ago at 4.5% can now get a larger home and not see an increase in the [payment amount],” Schaerer said. “If we didn’t have the shade of the recent 2.5% interest rates over our eyes, 4.5% would be amazing. The opportunity is there for that person to now go buy a $150,000 dollar house without paying more.”
Schaerer said interest rates have to go back up eventually and for some that will mean less incentive or desire to buy. But others will see it as a waning opportunity.
“There’s nothing that’s going to be more motivating than not being able to buy the house that you would want or that you could have yesterday,” Schaerer said. “For every percentage point the interest rate changes, you’re looking at a significant difference in house payment and that’s very motivating for people.”