There's been a change of possession in the Oklahoma City housing market, and home sellers might not know it yet, but they're playing defense.
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Buyers have the ball.
Home prices remain strong in the Oklahoma City area but sales slowed even more in September. Sales in the area sank 25.3 percent in September compared with August.
Still, there is a six-month supply of houses, which is considered a neutral market. Nationally, there is a 10-month inventory of homes for sale, according to the National Association of Realtors.
"We had a four- to five-month absorption rate this summer, which is a seller's market. Most markets would jump for joy if they had these rates,” said Joe Pryor, a Realtor with RE/MAX Associates in Edmond.
The change hurts anyway for people trying to sell a house when the market was on their side for so long.
Add the psychological impact of months of bad national housing news — from media outlets that tend to lump local markets all over the country into aggregate statistics that don't mean much on the local level — plus the actual unsettling accumulation of for-sale signs in formerly active neighborhoods, and it's a buyer's market.
Sellers didn't punt. Nothing that drastic, statistically, has shown up in Oklahoma City's numbers. The way the market changed was more of a turnover on downs.
Nonetheless, it "barely” is a buyer's market, said Mike Cassidy, chairman of the Multiple Listing Service of the Oklahoma City Metro Association of Realtors. Nonetheless, it means buyers, knowing they have more selection, are driving bargains, not sellers.
It's not that cut-and-dried, though. Except for first-time buyers, most people in the market in a given locale are both buying a house and selling a house — unless they're moving into the area or moving out. It can make timing difficult.
Most sellers don't grasp that the market has turned, Cassidy said.
"They don't realize you can't play the game you did a year ago,” he said.
A home shopper a year ago, for example, who had decided on a particular neighborhood might have had four houses to consider. Now, the shopper can pick from 10 or a dozen houses, said Cassidy, broker and co-owner of Coldwell Banker Advantage.
The increased inventory is letting shoppers play hardball — and some sellers still don't know what's hitting them, he said. September ended with 9,598 homes for sale, 1 percent more than the month before and 5 percent more than the year before.
It's the sales pace that gives the housing supply meaning.
Realtors handled the sale of 1,432 houses in September, a 10 percent drop from September 2006. If that pace were steady it would take 6.7 months to absorb the supply.
A more realistic estimate requires taking the average number of sales per month over the past year, 1,621.8, a pace that would sell those homes in 5.9 months.
"We've still got sellers out there who don't realize we're in a buyer's market,” Cassidy said, and that they need a new game plan.
To sell sooner rather than later, and at the price they desire, he said, sellers have to have spotless homes that look good inside and out — and they have to price their house right from the beginning.
Cassidy had an example of the right way and the wrong way:
The owner of a 4-year-old, 2,400-square-foot house in the Fenwick addition near NW 164 and Western Avenue insisted that he list the house for $220,000 when Cassidy advised an asking price of $210,000.
With no sale after six months, the owner lowered the price to $215,000 — but still it remains unsold.
Not far away in the same neighborhood, the owner of an identical house had Cassidy list the house for $210,000 from the outset, and it sold in 10 days.
Pricing is trickier than it's been since before the 2002-2005 housing boom, he said. But Oklahoma City still parts ways with the nation on home price trends.
The national median price — half the homes sold for more and half sold for less — fell to $211,700 in September, down by 4.2 percent a year ago, the National Association of Realtors said Wednesday.
But in the Oklahoma City area, the median price increased 7 percent in September compared with September 2006, from $121,500 to $130,000, according to the Oklahoma City Metro Association of Realtors.
"This does not mean that we don't have real pockets of problems,” Pryor said. "We have high-end-market-priced homes that may sit for a considerable time longer.”
In addition, he said, the effects of tighter lending standards as a result of subprime excesses are hard to gauge.
"We don't know yet how the first-time buyer will be affected by fewer 100 percent loans, and more (Federal Housing Administration-backed) loans with a down payment,” Pryor said.
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