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Local home builders facing tough winter
Sales likely to drop through March

Workers build a home in the Lakes of Bailey Ranch addition in Owasso last year. Tulsa World file
 
By ROBERT EVATT World Staff Writer
Published: 10/28/2009  2:23 AM
Last Modified: 10/28/2009  4:50 AM

Local home builders and real estate agents may be in for a bumpy ride over the next few months.

Sam Rader, CEO of Coldwell Banker Select in Tulsa, said several factors, including the expiration of the $8,000 first-time homebuyer tax credit, will likely cause home sales to drop at least through March, though a slow recovery may begin shortly afterward.

"I see light at the end of the tunnel, and I'm reasonably sure it's not an oncoming train," he said.

Rader's comments came Tuesday at the Home Builders Association of Greater Tulsa's annual Economic Forecast Seminar at Forest Ridge Country Club in Broken Arrow.

Rader said the tax credit has been a huge influence on the types of homes manufactured and sold.

"We're looking at a market active in the middle end, from $100,000 to $200,000, while the high end and the low end have been extremely difficult," he said.

Rader said the low-value home market, especially in the northern part of Tulsa, is not faring well.

Many people in the housing industry have been pushing for an extension of the tax credit.

Rader said Congress has mixed views on the proposal, while the White House appears cool to it.

Tulsa area home sales are down 9 percent so far this year compared with the same period in 2008.

But construction has taken a bigger hit: New-home sales recorded by Northeast Oklahoma Real Estate Services — the multiple listing service that compiles data — are down 30 percent.

However, many new homes are sold directly by the builder and are not recorded by NORES.

Metropolitan Tulsa continues to fare much better than the nation as a whole. Median home prices here at midyear were down 2.7 percent from a year earlier, compared with a drop of 11.4 percent nationally, Rader said.

Additionally, an estimated 70 percent of homes for sale in the Southwest are on the market because of foreclosure or short sales, but the number is only 20 percent in Tulsa.

Ben Cowen, president of BOK Mortgage, pointed out that interest rates are being directly manipulated lower by the federal government as it buys a huge amount of mortgage-backed securities.

"Whenever the rate gets up to 5.25, we see their activity pick up," he told the gathering.

Cowen estimated that the government can keep up its pace until March or April, unless more money is allocated to the program.

Lending regulations continue to be a potential problem for buyers, Cowen said.

"The good news is that credit tightening has bottomed out," he said. "The bad news is that credit is pretty damn tight."

Furthermore, an increasing number of lenders are only allowing loans to be issued that are 80 percent of the total value of the home, which is leading to higher down payments.

Cowen said the total dollar amount of mortgage activity may drop in 2010, but a significantly larger proportion of that will be lending for home purchases rather than refinancing.


Robert Evatt 581-8447
robert.evatt@tulsaworld.com
By ROBERT EVATT World Staff Writer

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livinintheburbs, (10/28/2009 9:58:12 AM)
$8,000 tax credit...Cash for Homesters.Let it expire and give the rest of us a tax credit for bailing them out.
Time to sell those hummmers home builders...it's fixing to get slow...
Report Comment
Few Clothes, America (10/28/2009 6:29:04 PM)
I see the same thing in Oklahoma and Texas. Builders throw up houses that have the same color roofs, and paint jobs, and look like a Stalag 13 movie set. Where's the imagination? Where's the craftsmanship?
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my view, Sand Springs (10/28/2009 10:43:19 AM)
What's changed? My Father was a carpenter he always had tough winters. They made their money during the spring, summer and fall working 12 hour days and working Saturday's also. They prepared for the lean winter months. We hardly ever notice except he was around more.
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Local Yokel, Tulsa (10/29/2009 11:39:23 AM)
You get what you pay for. Everyone wants the most size for the buck. The successful builders figure out how to build more house for less dollar and the creativity suffers tremendously. It has been awhile since I have seen anyone trade size for style.
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yep, Tulsa County (10/29/2009 10:28:06 PM)
I live in a home built in the 80's. Terrible construction. Previous home was built in '73, and it was cookie-cutter but well built. I've remodeled some ones built in the 40's-50's. Had a lot of character, and old-time craftsmenship, but there were few building standards then so some things are overbuilt but some things are clearly not what they should be. Those homes will be around a long time though. This 80's home...won't last as long. The new homes I've walked through nearby in partial construction are even worse. Some of the big homes in the fancy neighborhoods are the worse....reminds me of a cheap, tasteless cake with a lot of icing and colorful designs on top. All looks, but not much quality beneath it. Like many things (customer service for example) building has become impersonal...the people doing the construction don't know who you are and a lot of them don't care.
Report Comment
The A Team, (10/28/2009 3:38:36 PM)
These cartel builders also employ illegal alien labor and misclassify them as 1099 employees or just pay them cash under the table.
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Corvetteguy, Tulsa (10/28/2009 9:30:59 AM)
I sincerely hate to see any of the rank & file construction workers losing their jobs,.... that work hard to get these homes built. Also, every home built in Tulsa, is another part of the tax base, which Tulsa needs.
Having said that however, has anyone gone out and looked carefully at the homes that are being built in Tulsa right now? I've looked at them, and they are nothing but a bunch of "cookie cutter" copies of each other. Plus, the quality, at best, is very mediocre.
Talking to construction workers, they tell me that the great builders of the past 20 to 25 years, were run out of business by some new "cartel" of builders who only care about mass-producing houses of low quality, at quick profits. I understand that if a potential buyer asks to talk tot he builder of one of these mass-produced houses, the buyer is told NO, you cannot talk to the builder, only the pressure sales people.
The workers tell me the high-volume builders ran the former, great quality builders out of business by literally selling at showstring budgets,... cheap-quality houses, right beside the good builders. In short, they ran those guys out of Tulsa, and Owasso.
The workers also tell me the local Home Builders Association is ran by these same builders, and is not even remotely objective. It's like a union for the homebuilding company owners. It's sole mission is to "prop up" the builders who are members, and arrange "parade of homes shows".

Maybe a slow-down could help thin this group of cookie-cutter builders out of Tulsa. Maybe some better builders will have a chance to start up. Which could mean more jobs for higher-quality houses.

Posibly there is a silver lining.
Report Comment
Corvetteguy, Tulsa (10/29/2009 10:39:01 PM)
T5000,

I'll agree with you on Sam Holinger, but that''s where I stop with your list.
one of those on your list of "good builders' paid out a hefty lawsuit settlement for putting the britches on a home buyer. A big, big, settlement.

The best ones are now gone.
Report Comment
T5000, 'burbs, Ok. (10/28/2009 4:08:40 PM)
Corvetteguy, Your comments have some truths, but also some untruths.

It's true that some 'cartel' builders came in and were stackin' em deep and sellin' em cheap. I won't name names, but it's obvious who some of them are. People who bought from the Cartel were often victims of bait-and-switch tactics & high pressure sales.

However, saying the Homebuilder's Association is run by these guys is untrue. The board of directors and officers of the HBA gets shuffled around with regularity.

There are still plenty of great builders in the Tulsa area. Builders such as Bill Rhees, Wayne Farabough, Gary Soderstrom & Sam Hollinger are still kicking and still producing top-notch homes.
Report Comment
nuffsaid, Tulsa (10/28/2009 4:41:25 PM)
The A team is right. I used to sell construction tools and all and I mean ALL the drywall, roofing and lawn workers were let's say people who could not understand any English. I'm actually glad to see the slow down. Maybe some will go back home with their fat pregnant wives and five kids.
Report Comment
Stratolifter, (11/8/2009 5:50:20 PM)
whatever you are looking to buy, do your "homework" (no pun intended) before buying a home located in an HOA (homeowner associations) and especially one with gates! those gates will NOT protect you from the problems (financial risks and liabilities) that lurk behind those gates! go to nohoa dot com, or ahrc dot com. get educated!!
Report Comment
Chief1998, (10/29/2009 7:39:22 PM)
I have to agree with Corvetteguy. The big builders are putting up some shabby houses that will be problems in the future. Either the code inspectors are asleep at the wheel, incompetent, or on the take to allow this trash to be built in their areas. Limmons homes may be the worst. High pressure sales personnel get you to sign a contract at one price and after the contract is signed you go to a "Design Center" and realize the house you contracted for is not liveable unless you agree to pay for "upgrades" and you end up paying significantly more for the home than you planned.
Buyers beware - never contract to have a home built by one of the cookie cutter builders. Once they get the contract they really don't care about the quality of the home they throw up.
 

 
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