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COMPREHENSIVE HOUSING MARKET ANALYSIS , Oklahoma

U.S. Department of Housing and Urban Development | Office of Policy Development and Research | As of September 1, 2018

Summary

Housing Market Area Economy Sales Market onfarm payrolls in the The current sales housing market Oklahoma City HMA in the HMA is balanced, with Nare at record-high levels, an estimated vacancy rate of 1.9 and job growth has increased percent compared with the rate recently. During the 12 months of 2.2 percent in April 2010. ending August 2018, nonfarm Demand is forecast for 18,400 payrolls increased by 14,500, new homes during the next 3 or 2.3 percent, to 645,300 jobs, years (Table 1). The 1,500 homes compared with flat job growth a currently under construction will year earlier. The recent surge in meet a portion of that demand. job growth was mostly because of job gains associated with Rental Market increases in oil prices. During the Current rental housing market 3-year forecast period, nonfarm conditions in the HMA are soft, payrolls are expected to increase with an estimated 8.5-percent an average of 2.2 percent annually. The Oklahoma City Housing Market rental vacancy rate, down from The four largest employers in the 10.4 percent in April 2010. Area (HMA) is coterminous with the HMA are the State of Oklahoma, Oklahoma City, OK Metropolitan During the forecast period, Tinker AFB, OU, and the Federal demand is estimated for 3,825 Statistical Area and is comprised of Aviation Administration, which Canadian, Cleveland, Grady, Lincoln, new market-rate rental units account for a combined 14 percent (Table 1). The 530 units currently Logan, McClain, and Oklahoma of all jobs (excluding military Counties in . The under construction will meet a personnel). Table DP-1 at the end portion of the demand. HMA includes the Oklahoma state of this report provides additional capital, the employment data. (OU), and (AFB), all of which contribute to the Table 1. Housing Demand in the Oklahoma City HMA During the Forecast economic stability of the HMA. Period Oklahoma City HMA Sales Units Rental Units

Market Details Total Demand 18,400 3,825

Under Construction 1,500 530 Economic Conditions ...... 2 Population and Households ...... 7 Notes: Total demand represents estimated production necessary to achieve a balanced market at the end of the forecast period. Units under construction as of September 1, 2018. The forecast Housing Market Trends ...... 10 period is September 1, 2018, to September 1, 2021. Data Profiles ...... 17 Source: Estimates by analyst 2 Economic Conditions

he Oklahoma City HMA billion annually (U.S. Department economy depends heavily of Defense). The third largest Ton the government sector, employer is OU, with a combined which comprised 129,600 jobs, or 17,700 full-time employees at the one-fifth of all nonfarm payrolls in main campus in Norman and at the HMA, during the 12 months the Health Sciences Center near ending August 2018 (Figure 1). . OU The State of Oklahoma is the has an annual economic impact largest employer in the HMA, on the HMA of $2.2 billion with 47,300 workers (Table 2). and accounts for a combined The second largest employer 47,500 direct and indirect jobs is Tinker AFB, which employs in the HMA (The University 27,000 (18,400 civilians and 8,600 of Oklahoma Community active-duty military personnel) Impact Report 2018). The fourth and has an economic impact largest employer is the Federal on the HMA of more than $3.0 Aviation Administration, with 7,000 employees. The aerospace industry, which includes jobs Figure 1. Current Nonfarm Payroll Jobs in the Oklahoma City HMA, by Sector in multiple sectors, continues to grow in the HMA. More Mining, Logging, & Construction: 7.8% Government: 20.1% than 300 aerospace-related firms, Manufacturing: 5.3% with a combined 43,000 employees (including Tinker AFB personnel), are located in the HMA and have an annual economic impact Wholesale & Retail Trade: 13.9% of $6.2 billion on the HMA Other Services: 4.4% economy (Oklahoma Aeronautics Commission). Transportation & Utilities: 3.3% The economy of the HMA Leisure & Information: 1.2% expanded throughout most of the

COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE Hospitality: 11.4% Financial Activities: 5.2% 2000s, with job growth occurring every year except during periods coinciding with national economic

Education & Professional & downturns. From 2001 through Health Services: 14.4% Business Services: 13.0% 2004, nonfarm payrolls in the HMA increased by an average Note: Based on 12-month averages through August 2018. of only 700 jobs, or 0.1 percent, Source: U.S. Bureau of Labor Statistics annually, partly because of the

Oklahoma City, OK • Oklahoma City, national economic recession during 2001. Job growth was Table 2. Major Employers in the Oklahoma City HMA strong in the HMA from 2001 through 2004 in the education and Number of Name of Employer Nonfarm Payroll Sector health services sector, increasing Employees by an average of 2,300, or 3.3 State of Oklahoma Government 47,300 percent, annually. Widespread Tinker Air Force Base (AFB) Government 27,000 University of Oklahoma Government 17,700 gains in the education and health Federal Aviation Administration Government 7,000 services sector during that period Education & Health Services 6,000 reflected national trends in Stores, Inc. Wholesale & Retail Trade 5,100 this sector, which increased an Mercy Health Education & Health Services 4,500 average of 3.1 percent annually. OGE Energy Corp. Transportation & Utilities 3,400 Job losses in the HMA occurred SSM Health Education & Health Services 3,000 in several sectors from 2001 Norman Regional Health System Education & Health Services 3,000 through 2004 but were greatest in the manufacturing sector, which Notes: Excludes local school districts. Data includes military personnel, who are generally decreased an average of 3,200, not included in nonfarm payroll survey data. or 6.9 percent, annually. That Sources: Greater Oklahoma City Partnership; U.S. Department of Defense; employers decrease also reflected national Economic Conditions Continued

3 trends in this sector, which payrolls in the HMA decreased declined an average of 4.6 percent by an average of 8,800 jobs, or annually during the same period. 1.5 percent, annually. Job losses Economic expansion was strong were greatest in the manufacturing from 2005 through 2006 in the and the professional and business HMA, when nonfarm payrolls services sectors, which decreased increased by an average of 10,900 by an average annual of 3,000 jobs, or 2.0 percent, annually. The and 2,200 jobs, or 8.5 and 2.8 mining, logging, and construction percent, respectively. Widespread sector led job growth during this layoffs in the manufacturing and period with average annual gains the professional and business of 3,300 jobs, or 9.7 percent. services sectors during the Increased production stemming period reflected national trends from oil and natural gas price in these sectors, which declined increases contributed to an average an average of 7.3 and 2.9 increase of 1,900 jobs, or 18.6 percent annually, respectively. percent, annually in the mining Approximately one-fourth of and logging subsector, which job losses in the professional and accounted for 56 percent of the business services sector both in the mining, logging, and construction HMA and nationwide occurred sector gains. During the same in the temporary help services period, the construction subsector industry. Average annual gains grew by an average of 1,500 jobs, of 1,800 jobs, or 1.5 percent, in or 6.0 percent, annually, partly the government sector partially because of numerous revitalization offset overall losses during this projects in the city of Oklahoma period, primarily because of City funded by Metropolitan increased hiring in the federal Area Projects (MAPS), an and local government subsectors. economic development initiative The federal government subsector passed by Oklahoma City voters. increased by an average of 1,200 Revitalization efforts, totaling jobs, or 4.6 percent, annually, more than $1.5 billion, included partly because of expansions at

COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE the construction of a minor league the Aeronautical baseball , sports arena, and Center of the Federal Aviation the (a mile-long Administration. The local river canal that includes government subsector gained services and tours for visitors). an average of 500 jobs, or 1.0 Developers also completed 10 percent, annually. Contributing residential developments, with to increased employment in this approximately 2,200 units, subsector was the opening of the in the downtown area. From Riverwind Hotel at the Riverwind Oklahoma City, OK • Oklahoma City, 2007 through 2008, the HMA Casino in the city of Norman by economy continued to grow, albeit the Choctaw Nation of Oklahoma, moderately, with average annual resulting in 400 new jobs. payroll gains of 7,700 jobs, or 1.3 The HMA economy began to percent. The education and health expand again in earnest in 2011 services sector, which increased and, by mid-2012, surpassed by 2,700 jobs, or 3.5 percent, prerecession payroll levels. From annually, led job growth during 2011 through 2015, nonfarm this period. The mining, logging, payrolls increased by an average and construction sector was the of 12,700 jobs, or 2.1 percent, second leading growth sector, annually, to 630,300 jobs, with increasing by an average of 2,300 gains in nearly every sector. jobs, or 5.6 percent, annually. The wholesale and retail trade The effects of the Great Recession, sector led gains with an average which began in December 2007 annual increase of 2,300 jobs, and ended in June 2009, did not or 2.7 percent. Contributing to reach the HMA until 2009. From job growth in this sector was 2009 through 2010, nonfarm the opening of 11 new stores by Economic Conditions Continued

4 Walmart Inc., which resulted in the manufacturing sector, in 1,250 new jobs, primarily in declining by 2,900, or 7.8 percent, growing suburban communities to 34,500 jobs. More than one- surrounding the city of Oklahoma fourth of job losses in this sector City. The leisure and hospitality occurred in the mining and oil and sector gained an average of 2,100 gas field machinery manufacturing jobs, or 3.4 percent, annually, to industry, which decreased by 760, reach 68,000 jobs. The popularity or 28.4 percent, to 1,925 jobs. of the National Basketball Partly offsetting nonfarm payroll Association team, the Oklahoma losses was an increase in jobs in City Thunder, which had a local the leisure and hospitality sector economic impact of more than and the government sector, each $60 million annually during this gaining 2,000 jobs, or 2.9 percent period (City of Oklahoma City and 1.6 percent, to 70,000 and data), contributed to sector gains. 129,000 jobs, respectively. Local Nonfarm payrolls declined sports teams and several new during 2016 because of job losses recreation venues throughout the stemming from a sharp drop in oil HMA contributed to gains in the prices that began in 2014. During leisure and hospitality sector. 2016, nonfarm payrolls decreased Also contributing to an increase in by 500 jobs, or 0.1 percent, to jobs in the sector was the opening 629,800. Job losses were greatest of the 21c Museum Hotel in in the mining and logging downtown Oklahoma City in July subsector, which decreased by 2016, resulting in approximately 3,400, or 17.1 percent, to 16,500 140 new jobs. The 21c Museum jobs. Contributing to the decline Hotel, converted from the former in this subsector were widespread Oklahoma City Ford Motor layoffs at energy-related companies Company Assembly Plant in stemming from a decline in 2016, is listed with The oil prices and consequently National Register of Historic diminished oil production. West Places (). Intermediate (WTI) crude Contributing to gains in the COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE oil, considered a benchmark for government sector was an domestic oil pricing, declined from increase of nearly 1,000 aircraft a price of $107 per barrel in July maintenance personnel at Tinker 2014 to $26 per barrel by February AFB to accommodate the greater 2016 ( of St. workload assigned to the base. Louis). Job losses also occurred Figure 2 shows sector growth

Figure 2. Sector Growth in the Oklahoma City HMA Percentage Change, 2000 to Current Oklahoma City, OK • Oklahoma City,

Total Nonfarm Payroll Jobs Goods-Producing Sectors Mining, Logging, & Construction Manufacturing Service-Providing Sectors Wholesale & Retail Trade Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Government – 60 – 40 -20 0 20 40 60 80

Note: Current is based on 12-month averages through August 2018. Source: U.S. Bureau of Labor Statistics Economic Conditions Continued

5 in the HMA from 2000 to the ending August 2018 in the current date. professional and business services During the 12 months ending sector, which increased by 3,600, August 2018, nonfarm payrolls or 4.5 percent, to 83,900, with in the HMA increased by 14,500 one-third of the increase occurring jobs, or 2.3 percent, to 645,300 in the employment services jobs. Leading job growth during industry. Partly offsetting nonfarm this period was the mining, payroll gains was a decline in the logging, and construction sector, wholesale and retail trade sector, which increased by 3,900 jobs, or which decreased by 1,300, or 1.4 8.4 percent, to 50,400 jobs (Table percent, to 89,900. Most of the 3). Nearly three-fourths of the job decline in this sector occurred in gains in this sector occurred in the retail trade subsector, down the mining and logging subsector, by 1,000 jobs, or 1.5 percent, to which gained 2,900, or 16.7 66,200 jobs, reflecting a trend in percent, to 20,300. Contributing more than one-half of the total to gains in this subsector was number of metropolitan areas in an increase in oil production the nation. stemming from higher oil prices. Since 2000, the relatively As of September 1, 2018, WTI stable economy of the HMA crude oil was priced at about $70 has contributed to lower per barrel, a 170-percent increase unemployment rates compared compared with February 2016. with national rates. From 2000 Several new MAPS-sponsored through 2008, the average annual projects, including a $288 million unemployment rate in the HMA Downtown Convention Center was 4.0 percent, compared in downtown Oklahoma City with the 5.1-percent national and numerous sidewalk and rate. From 2009 through 2010, infrastructure improvement the unemployment rate of the

COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE projects throughout the city HMA increased, as a result of of Oklahoma City, supported the national economic recession, job growth in the construction to 5.9 percent, an increase of subsector. Job growth was also 1.9 percentage points from the strong during the 12 months average during the 2000-to-2008 period. By comparison, the Table 3. 12-Month Average Nonfarm Payroll Jobs in the Oklahoma City HMA, by Sector national unemployment rate increased 4.5 percentage points, 12 Months Ending Absolute Percent Oklahoma City, OK • Oklahoma City, to 9.6 percent, during the same August 2017 August 2018 Change Change period. From 2011 through 2015, Total Nonfarm Payroll Jobs 630,800 645,300 14,500 2.3 the unemployment rate in the Goods-Producing Sectors 79,900 84,500 4,600 5.8 HMA declined to 3.9 percent Mining, Logging, & Construction 46,500 50,400 3,900 8.4 Manufacturing 33,400 34,100 700 2.1 by the end of 2015, compared Service-Providing Sectors 550,900 560,800 9,900 1.8 with 5.3 percent nationally. The Wholesale & Retail Trade 91,200 89,900 –1,300 – 1.4 unemployment rate in the HMA Transportation & Utilities 20,500 21,500 1,000 4.9 increased slightly during 2016, Information 7,800 7,400 – 400 – 5.1 to 4.2 percent, which was lower Financial Activities 33,200 33,300 100 0.3 than the national rate of 4.9 Professional & Business Services 80,300 83,900 3,600 4.5 percent. During the 12 months Education & Health Services 91,400 92,900 1,500 1.6 ending August 2018, the average Leisure & Hospitality 70,800 73,800 3,000 4.2 unemployment rate in the HMA Other Services 27,500 28,500 1,000 3.6 was 3.5 percent, compared with Government 128,200 129,600 1,400 1.1 4.0 percent a year earlier, whereas, Notes: Numbers may not add to totals because of rounding. Based on 12-month averages through August 2017 and at the national level, the average August 2018. Source: U.S. Bureau of Labor Statistics Economic Conditions Continued 6 unemployment rate was 4.0 because of expansions at Tinker percent, down from 4.6 percent. AFB. The new KC-46A Tanker Figure 3 shows trends in the labor Sustainment Campus at Tinker force, resident employment, and AFB is nearing completion and the unemployment rate in the expected to result in 1,300 new HMA from 2010 through 2017. full-time jobs once operational in During the 3-year forecast period, 2019 (Tinker AFB), with annual nonfarm payrolls in the HMA are salaries averaging $62,000 (Greater estimated to increase an average of Oklahoma City Chamber). By 2.2 percent annually. Job growth comparison, the average salary is expected to be slightly stronger in the HMA for private sector during the second and third years workers was $49,600 during the of the forecast period. Gains are 12 months ending August 2018 anticipated in most job sectors, (Bureau of Labor Statistics). Job with the strongest job growth gains are also expected to occur projected to occur in the leisure in the manufacturing sector and hospitality sector and the and the education and health government sector. Several new services sector. Two firms that hotels are expected to open in the manufacture military unmanned downtown Oklahoma City area aircraft systems will be opening and will contribute to gains in facilities in the HMA by the the leisure and hospitality sector. end of 2018. Kratos Defense & Construction is under way on the Security Solutions, Inc. is expected $241 million Omni Oklahoma to open an “offensive jet drone” City Hotel and is expected to manufacturing facility and employ be complete in 2021. The hotel 350 workers (State of Oklahoma will include 605 rooms and will Office of the Governor), while staff 375 full-time employees Valkyrie Systems Aerospace’s (Omni Hotels & Resorts). The HoverJet manufacturing facility is COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE construction of the Downtown expected to employ 350 workers Convention Center will replace the once fully operational. The nearby Cox Convention Center HoverJet aircraft is able to carry and is expected to result in 700 military personnel and equipment new jobs once complete in 2021. and can be operated remotely Job growth is expected to be strong or piloted manually. in the government sector, in part Oklahoma City, OK • Oklahoma City, Figure 3. Trends in Labor Force, Resident Employment, and Unemployment Rate in the Oklahoma City HMA, 2000 Through 2017

725,000 10.0 9.0 675,000 8.0 7.0 625,000 6.0 5.0 575,000 4.0

Labor Force & Labor Force 3.0 525,000 2.0 Resident Employment 1.0 Unemployment Rate 475,000 0.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Labor Force Resident Employment Unemployment Rate

Source: U.S. Bureau of Labor Statistics 7 Population and Households

he current population annually, with growth primarily in of the Oklahoma City residential communities in the city THMA is an estimated 1.40 of Oklahoma City and suburban million, an average increase of areas barely west of the Oklahoma 17,600, or 1.3 percent, annually line. Net in-migration since 2010. During this period, has occurred in every county net in-migration accounted for since 2010. Net in-migration into approximately 57 percent of the Oklahoma County has accounted population growth. In-migration for an estimated 40 percent of to the HMA primarily stemmed total net in-migration in the HMA from a growing economy and during the same period, and 25 relatively low unemployment percent and 21 percent of net rate during most of this period. in-migration in the HMA was in The most populous counties of Canadian County and Cleveland the HMA are Oklahoma and County, respectively. Cleveland Counties, with an estimated 800,000 and 281,900 During the 2000s, population residents, respectively, constituting growth in the HMA averaged a combined 77 percent of the 15,750, or 1.4 percent, annually, HMA population. The city of with net in-migration constituting Oklahoma City, with an estimated about one-half of the population population of 654,600, is the growth during this period. most populous city in the HMA Cleveland County and Canadian and the state. Approximately County accounted for a combined 75 percent of the population 70 percent of the HMA total of the city of Oklahoma City net in-migration during this resides in Oklahoma County; the period, and net in-migration remainder is in Canadian County into Oklahoma County and the COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE to the west and in Cleveland remaining counties constituted County to the south. With an 6 percent and 24 percent, estimated 125,000 residents, the respectively. The HMA population city of Norman, in Cleveland growth during the 2000s was County, is the second most greatest from 2008 to 2010, populous city in the HMA and when the population increased third most populous in the state, by an average of 20,750, or 1.7 behind the of Oklahoma percent, annually, compared Oklahoma City, OK • Oklahoma City, City and Tulsa. The city of with an average of 1.3 percent Edmond, north of Oklahoma annually from 2000 to 2008. From City in Oklahoma County, is 2008 to 2010, net in-migration the third most populous city in accounted for approximately the HMA, with an estimated 58 percent of the population 93,800 residents. Since 2010, the growth, or 12,000 people annually, populations in Oklahoma and even though nonfarm payrolls Cleveland Counties have increased significantly declined during the at average annual rates of 1.3 and same period. Job seekers were 1.2 percent, respectively, compared drawn to the HMA during this with an average increase of 1.6 period because of the relatively percent annually in the remaining low unemployment rate compared counties. The population of with national unemployment rates. Canadian County, the third most During this period, Oklahoma populous county in the HMA, County and Cleveland County with an estimated 141,900 people, accounted for 35 percent and grew an average of 2.5 percent 29 percent, respectively, of the Population and Households Continued 8 HMA total net in-migration. (Internal Revenue Service tax Net in-migration into Canadian return data; 2016 data are the most County constituted 20 percent recent data available). During of net in-migration to the HMA, this period, net out-migration and the remaining counties from Oklahoma County into the accounted for a combined 16 remaining six counties averaged percent. The 16 universities in the 2,900 residents annually, of HMA attracted students during which more than a combined 80 the 2000s, which contributed to a percent moved to Cleveland and combined increase in enrollment Canadian Counties. This trend by an average of 3,500 students, or of HMA residents migrating to 3.2 percent, annually. Enrollment suburban communities reflected increases at the HMA’s universities national trends during most of the have significantly slowed since 2000s until the Great Recession, 2010, however, partly because of when net in-migration into increased job opportunities both core counties in the HMA and elsewhere in the increased as a result of decreased . The combined fall mobility and the national housing 2018 enrollment of universities market collapse (Brookings in the HMA was relatively Institution—The Great American unchanged, at 74,000 students, Migration Slowdown: Regional compared with enrollment a year and Metropolitan Dimensions). earlier. Enrollment at universities Since 2013, national trends in the HMA is not expected to toward suburbanization from increase significantly during the core metropolitan counties into forecast period. Figure 4 shows suburban counties have increased components of population change (The Brookings Institution—The in the HMA from 2000 to the Avenue). The suburbanization forecast date. in the HMA is reflected by commuting patterns; employers COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE Since 2000, migration patterns within the HMA have primarily in Oklahoma County employ consisted of net out-migration about 77 percent of HMA working from Oklahoma County to the residents (U.S. Census Bureau). remaining six counties. From 2000 During the 3-year forecast period, through 2016, net out-migration the population of the HMA is from Oklahoma County into expected to increase by an average all the remaining counties of of 19,000, or 1.3 percent, annually.

Oklahoma City, OK • Oklahoma City, the HMA occurred each year The growing economy in the HMA is expected to attract people, Figure 4. Components of Population Change in the Oklahoma City HMA, resulting in net in-migration 2000 to Forecast estimated at an average of 11,500 people annually during the 12,000 forecast period. 10,000 The current number of households 8,000 in the HMA is an estimated 6,000 542,100, representing an average 4,000 increase of 6,225 households, 2,000 or 1.2 percent, annually since verage Annual Change April 2010. During the 2000s, the 2000 to 2010 2010 to Current Current to Forecast number of households increased Net Natural Change Net Migration by an average of 6,000, or 1.3 percent, annually. Since 2010, Notes: The current date is September 1, 2018. The forecast date is September 1, 2021. renter household growth has Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimates by analyst constituted 52 percent of total Population and Households Continued 9 household growth, compared 67 percent of renter households in with 37 percent during the 2000s. the HMA, and Cleveland County Contributing to the increased accounts for approximately 20 portion of new renter households percent of all renter households. since 2010 were tightened Homeownership rates among mortgage lending standards and the HMA counties range from an increased propensity to rent. an estimated 58.7 percent in Job losses during 2010 and the Oklahoma County, 65.2 percent local economic recovery from in Cleveland County, and 76.3 2011 through mid-2012 also to 79.2 percent in the remaining contributed to changes in the five counties. Figure 5 shows portion of new renter household the number of households in the formation since April 2010. Renter HMA, by tenure, from 2000 to households currently account for the current period. During the almost an estimated 37 percent forecast period, household growth of all households in the HMA, in the HMA is expected to average the highest percentage since 1950. 6,975 households, or 1.3 percent, Renter households in Oklahoma annually (Figure 6). County constitute an estimated

Figure 5. Number of Households by Tenure in the Oklahoma City HMA, 2000 to Current

350,000 300,000 250,000 200,000 150,000

COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE 100,000 50,000

2000 2010 Current Renter Owner

Note: The current date is September 1, 2018. Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analyst Oklahoma City, OK • Oklahoma City,

Figure 6. Population and Household Growth in the Oklahoma City HMA, 2000 to Forecast

20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 verage Annual Change

2,000

2000 to 2010 2010 to Current Current to Forecast Population Households

Notes: The current date is September 1, 2018. The forecast date is September 1, 2021. Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimates by analyst Housing Market Trends 10 Sales Market Sales housing market conditions of 9.5 percent in April 2010. By in the Oklahoma City HMA are comparison, the percentage of balanced, with an average sales underwater mortgages nationally vacancy rate estimated at 1.9 was 4.3 percent in June 2018, percent as of September 1, 2018, down from 5.5 percent a year down from 2.2 percent in April earlier and from a peak level of 2010. The inventory of homes 26.0 percent in December 2009. for sale represented a 3.2-month supply in August 2018, down from During the 12 months ending a 3.4-month supply a year earlier August 2018, new and existing and down from a 5.4-month home sales (including single- supply in 2010 (CoreLogic, Inc.). family homes, townhomes, and Contributing to the improved sales condominiums) increased in market conditions since 2010 have the HMA from a year earlier by been job and population growth. 3,075, or 11 percent, to 30,900 The adverse effects of the national homes sold, and the average housing crisis were not as evident price increased by more than in the HMA as in the nation as $4,250, or 2 percent, to $190,400 a whole. Lower unemployment (Metrostudy, A Hanley Wood rates, relatively stable average Company). The recent increase home sales prices, and lower in home sales was mostly because foreclosure rates compared of a surge in home sales demand with the nation contributed to resulting from relatively strong a relatively stable home sales economic growth during the market. In August 2018, 2.0 period. New home sales totaled percent of home loans in the 3,750, up by 50 homes, or 1 HMA were seriously delinquent percent, from the same 12-month COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE (90 or more days delinquent or in period a year earlier. The average foreclosure) or had transitioned new home sales price was into real estate owned (REO) $263,100, up $9,575, or 4 percent, status, the lowest percentage in the from a year earlier. Regular HMA since September 2002 and resale home sales totaled 25,300, down from a rate of 2.4 percent an increase of 3,450 homes, or in August 2017 and from 4.9 16 percent, from the previous percent in April 2010 (CoreLogic, 12-month period. The average Oklahoma City, OK • Oklahoma City, Inc.). The percentage of seriously sales price of regular resale homes delinquent home loans and REO increased to $183,100, up by properties peaked in January 2010 $3,775, or 2 percent, from a year in both the HMA and the nation, earlier. The average distressed at 5.1 and 8.6 percent, respectively. home sales (REO and short sales) By county, the percentage of price was $118,200, down by seriously delinquent loans and $1,250, or 1 percent. Distressed REO properties in August 2018 sales in the HMA accounted for ranged from 1.6 percent in 6 percent of all home sales, down Cleveland County to 3.2 percent in from 8 percent a year earlier and Lincoln County. The percentage of from a peak of 11 percent in the underwater mortgages (in which summer of 2011. By comparison, the mortgage debt is greater than distressed home sales constituted the current home value) in the 6 percent of total sales at the HMA as of June 2018 was 5.9 national level during the 12 percent, down from 6.0 percent a months ending August 2018, down year earlier and from a peak level from 9 percent a year earlier and a Housing Market Trends Sales Market Continued 11 peak of 27 percent in the summer earlier, and the average home price of 2011. Absentee-owner sales, increased 1 percent to $181,500. which are primarily investment Among the remaining counties or second-home purchases, in the HMA during the 12 months accounted for a peak 23 percent of ending August 2018, home sales total sales in the HMA during the ranged from 570 in Lincoln 12 months ending August 2018, County to 1,325 in Logan County, up from 20 percent during the and the average price for a previous year. By comparison, 27 home ranged from $143,800 in percent of home sales consisted Lincoln County to $188,400 in of absentee-owner sales at the Logan County. national level, unchanged from a year earlier and down from New and existing home sales in a peak of 31 percent in 2013. the HMA increased an average During the 12 months ending of 8 percent annually from 2001 August 2018, 540 new and existing through 2005 to reach a peak level condominiums sold in the HMA, of 36,000 home sales (CoreLogic, up by 40, or 8 percent, compared Inc.; Metrostudy, A Hanley Wood with a year earlier, and the average Company; with adjustments by the price for a condominium declined analyst). From 2006 through 2011, by $11,150, or 10 percent, to however, home sales declined by $103,700. The total number of an average of 2,450, or 8 percent, condominium sales during the annually, to 21,400 homes sold, 12 months ending August 2018 reflecting tighter mortgage lending represented less than 2 percent standards, the national recession, of total home sales. Similarly, and the economic downturn in the condominium home sales HMA. New and existing home accounted for less than 2 percent sales increased significantly from of total home sales from 2005 2012 through 2014 because of through 2017. strong job and population growth. COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE A decrease in the average interest Since 2000, 54 percent of home rate on mortgages in the HMA sales in the HMA occurred in from 7.24 percent in 2012 to 5.22 Oklahoma County, compared percent in 2014 also contributed with 12 percent and 22 percent to increased sales. During this in Canadian County and period, home sales increased Cleveland County, respectively. by an average of 2,325, or 10 Grady, Lincoln, Logan, and percent, annually, to 28,400 homes Oklahoma City, OK • Oklahoma City, McClain Counties accounted for sold. From 2015 through 2016, a combined 12 percent of home home sales activity moderated, sales in the HMA during the same increasing by an average of 640, period. During the 12 months or 2 percent, annually to 29,700 ending August 2018, the number homes. Contributing to the of homes sold in Oklahoma relatively moderate increase in County increased by 2,625, or 19 home sales during this period were percent, to 16,300, and the average job losses that occurred during price for a home was $199,000, up 2016. New and existing home $2,400, or 1 percent. In Canadian sales prices have increased nearly County, home sales totaled 4,300, every year since 2000, averaging 4 an increase of 5 percent compared percent annually, except in 2009, with a year earlier, and the average when prices declined 5 percent, price increased 4 percent, to partly because of decreased home $182,200. New and existing home sales demand stemming from sales in Cleveland County totaled the economic downturn. Also 6,000, unchanged from a year contributing to the decline in Housing Market Trends Sales Market Continued 12 2009 was an increase in sales of through 2010, to approximately relatively lower priced homes, in 3,025 homes permitted, because part resulting from the first-time of tightening lending standards homebuyer tax credit program. and, by 2009, a contracting local Nearly 2.68 million claims economy. During 2011, when the totaling $19.2 billion were made local economy was recovering, through the program nationally single-family home construction by first-time homebuyers from activity remained relatively stable, 2009 through 2010, of which increasing by 45, or 2 percent, 39,900 claims totaling $277.59 to approximately 3,075 homes million were made in the state of permitted. Relatively strong job Oklahoma, according to Internal growth, combined with increased Revenue Service data. confidence in the sales market among homebuyers, resulted in Single-family homebuilding an average increase of 44 percent activity in the HMA, as measured annually in homebuilding activity by the number of single-family from 2012 to 2013, to 6,350 homes homes permitted, increased by permitted. Also contributing to 380 homes, or 7 percent, to 5,900 homebuilding activity during 2013 homes permitted during the 12 were approximately 1,200 single- months ending August 2018, family homes permitted to replace compared with a year earlier a portion of the approximately (preliminary data). A relatively 1,600 homes destroyed by significant increase in home sales in May 2013. In the city and an expanding local economy of Moore, in Cleveland County, contributed to the increased where the damage was homebuilding activity during greatest, single-family home the period. From 2001 through permitting activity totaled 670 2005, single-family homebuilding homes during 2013, up nearly 180 activity increased an average of 15 percent from a year earlier. In the COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE percent annually, peaking at 8,200 HMA, single-family homebuilding homes permitted in 2005 (Figure activity slowed slightly from 2014 7). Relaxed mortgage lending through 2016, declining an average standards and relatively affordable of 7 percent annually to slightly home prices, combined with job fewer than 5,050 homes permitted and population growth, were the because fewer replacement primary reasons for increased homes were needed. In addition, homebuilding. Single-family

Oklahoma City, OK • Oklahoma City, the economic downturn in the homebuilding declined an average HMA during 2016 contributed to of 18 percent annually from 2006 decreased homebuilding during the period. Figure 7. Single-Family Homes Permitted in the Oklahoma City HMA, 2000 to 2018 An estimated 1,500 single-family homes are currently under 9,000 construction in the HMA. In the 8,000 7,000 city of Edmond, construction is 6,000 under way at the Council Ridge 5,000 4,000 residential community. Three- and 3,000 four-bedroom homes, ranging 2,000 1,000 from 1,500 to 1,950 square feet, are available, with prices ranging from approximately $207,300 to 2000 2001 2002 2003 2004 2005 2006 2007 20082009 2010 2011 2012 2013 2014 2015 2016 20172018 $260,400. During the 12 months Notes: Includes townhomes. Current includes data through August 2018. ending August 2018, 40 new Sources: U.S. Census Bureau, Building Permits Survey; estimates by analyst homes sold at Council Ridge for Housing Market Trends Sales Market Continued 13 an average price of $227,200. and four-bedroom homes, ranging Of the 150 homes planned at from 1,625 to 2,300 square feet. buildout, 125 homes have been Approximately 40 new homes completed, and 25 lots remain have sold at Frisco Ridge for an available for construction. In average price of $267,600 since the city of Yukon, near the city construction began in late 2017, of Oklahoma City in Canadian and nearly 50 home sites of the County, construction is under way 90 planned at buildout remain at the Frisco Ridge residential available for construction. community. Prices range from $216,100 to $292,900 for three- Demand is expected for 18,400 new homes in the HMA during Table 4. Estimated Demand for New Market-Rate Sales Housing in the the next 3 years (Table 1). New Oklahoma City HMA During the Forecast Period home sales demand is expected Price Range ($) Units of Percent to be greatest during the third From To Demand of Total year of the 3-year forecast period. 134,800 199,999 6,250 34.0 The 1,500 homes currently under 200,000 249,999 3,875 21.0 construction will meet part of 250,000 299,999 3,500 19.0 the demand during the first 300,000 399,999 3,125 17.0 year. Demand is expected to be 400,000 599,999 1,300 7.0 greatest for homes priced less than 600,000 and higher 370 2.0 $200,000. Table 4 shows estimated Notes: Numbers may not add to totals because of rounding. The 1,500 homes currently under demand for new market-rate sales construction in the HMA will likely satisfy some of the forecast demand. housing in the HMA by price Source: Estimates by analyst range during the forecast period. Rental Market The rental housing market down from 7.2 percent a year in the Oklahoma City HMA earlier and down from 10.1 is soft, with a current overall percent during the first quarter COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE rental vacancy rate estimated of 2010 (Reis, Inc.). Apartment at 8.5 percent. Rental market market conditions are soft conditions have improved primarily because of increased since April 2010, however, competition from the home sales when the rental vacancy rate market and a relatively large was 10.4 percent (Figure 8). number of apartment additions The apartment rental market since the fall of 2016. A total is also soft, with an average Oklahoma City, OK • Oklahoma City, of four apartment communities, apartment vacancy rate as of with a combined 880 units, August 2018 of 7.0 percent, are currently in lease up. The average apartment rent in the Figure 8. Rental Vacancy Rates in the Oklahoma City HMA during August 2018 HMA, 2000 to Current increased 3 percent, to $682, 12.0 compared with a year earlier. 10.8 10.4 10.0 The average apartment vacancy 8.5 rates among Reis, Inc.-defined 8.0 market areas ranged from 6.2 6.0 percent in the Midwest/Del 4.0 City market area, east of the 2.0 city of Oklahoma City and near 0.0 Tinker AFB, to 8.6 percent in 2000 2010 Current the West Central Oklahoma City Note: The current date is September 1, 2018. market area. Apartment rents Sources: 2000 and 2010—2000 Census and 2010 Census; current— ranged from an average of $583 estimates by analyst Housing Market Trends Rental Market Continued 14 in the West Central Oklahoma Changes in the average apartment City market area to $831 in the rent in the HMA have been East Central Oklahoma City relatively stable since 2000, market area, which includes regardless of changes in either downtown Oklahoma City. The apartment supply or demand. average vacancy rate for Class A From 2001 through 2014, the apartments in the HMA was 7.7 average apartment rent increased percent during the second quarter an average of 2 percent annually, of 2018, down from 8.2 percent a to $614. The average apartment year earlier, and the average rent rent increased from 2015 through for Class A apartments increased 2016 an average of 3 percent 3 percent, to $825. annually, to $652. The increased rent growth from 2015 through Rental market conditions in the 2016 was because a significant HMA were soft during most of number of Class A apartment the 2000s. Job declines in the units, which typically command HMA from 2002 through 2003 relatively higher rents, were contributed to an increase in completed during the same period. the average apartment vacancy From 2015 through 2016, Class A rate from 5.9 percent in 2000 apartment completions averaged to 9.6 percent in 2003. From 1,750 units annually, compared 2004 through 2009, the average with an average annual 730 units apartment vacancy rate fluctuated from 2001 through 2014. from a low annual rate of 8.4 percent in 2005 to a high annual Tinker AFB and the 16 universities rate of 10.0 percent in 2009. in the HMA significantly influence Overbuilding of apartments from the rental market. Tinker AFB, 2003 through 2005, combined with in Oklahoma County, provides strong competition from the home housing for unmarried military sales market from 2004 through personnel in 14 dormitories COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE 2005 and then a significant decline comprising a combined 950 in nonfarm payrolls during 2009, beds and has approximately contributed to relatively high 650 privatized housing units for average apartment vacancy rates married military personnel and during the 2004-to-2009 period. their families. The remaining From 2010 through 2014, the military personnel and family apartment vacancy rate declined to members, approximately 7,000 a rate of 6.1 percent. Contributing households, reside off base in Oklahoma City, OK • Oklahoma City, to the decrease during this the surrounding housing market. period were both the soft home Combined, universities in the sales market in the early 2010s HMA provide on-campus housing and a growing local economy for approximately 14,200 students, from 2011 through 2014, which or 19 percent of the 74,000 drew residents to the HMA and students enrolled as of the fall subsequently increased demand. 2018 semester. The remaining During 2015 through 2016, the students, including approximately apartment vacancy rate increased 78 percent of the 28,600 students to 6.5 percent, partly because of at the OU Norman campus, an additional 3,500 apartment reside in the local housing market. units being completed and added Student households currently to the existing apartment supply. account for about one-tenth of The local economic downturn all renter households in the HMA. that occurred during 2016 also Additional student housing is contributed to softening currently under construction and apartment market conditions. Housing Market Trends Rental Market Continued 15 nearing completion at the OU greatest average annual number main campus in Norman. The of multifamily units permitted 400-unit Cross on-campus student during any 4-year period since apartments are currently under the 1983–1986 period, when construction and expected to an average of 5,350 units were be complete in the fall of 2018. permitted annually. Multifamily Units at Cross are restricted to construction during the 2000s sophomore, junior, and senior was strongest from 2003 through students enrolled at OU. No 2005, when an average of 1,650 additional units are currently units were permitted annually. under way at any of the other By comparison, from 2006 universities in the HMA or at through 2011, multifamily Tinker AFB. construction activity averaged 950 units annually. Condominium Multifamily construction activity, construction has accounted for as measured by the number of only 2 percent of multifamily multifamily units permitted, construction overall since 2000. decreased in the HMA by 210 Condominium construction units, or 26 percent, to 590 units peaked during 2004 through 2005, permitted during the 12 months when an average of 150 units were ending August 2018, compared permitted annually. with the number permitted a year earlier (preliminary Approximately 530 apartment data, with adjustments by the units are currently under analyst). An increase in the construction in the HMA, and an average apartment vacancy additional 193 apartment units are rate in the HMA contributed planned. Construction is under to the decrease in multifamily way on the remaining 200 units construction activity during this of West Village, an apartment period. By comparison, from community that will have 350 COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE 2012 through 2015, an average units in the Film Row District of 2,475 units were permitted in downtown Oklahoma City, annually (Figure 9). Multifamily adjacent to 21c Museum Hotel. construction activity was strong Construction at West Village during this period because of the began in 2017 and is expected to expanding HMA economy and be complete in the spring of 2019. because of improved apartment Rents at West Village are $1,150 market conditions through 2014. for studio units and range from Oklahoma City, OK • Oklahoma City, Multifamily permitting from $1,215 to $1,550 for one-bedroom 2012 through 2015 represents the units, $1,700 to $2,800 for two- bedroom units, and $2,025 to Figure 9. Multifamily Units Permitted in the Oklahoma City HMA, 2000 $2,300 for three-bedroom units. to 2018 The historic 32-story former First National Bank building, 3,000 also in downtown Oklahoma 2,500 City, is being converted into 2,000 the $230 million First National 1,500 Center, which will include the 1,000 500 193-unit Residences at First National apartments, located on the 9th through 31st floors. First 2000 2001 2002 2003 2004 2005 2006 2007 20082009 2010 2011 2012 2013 2014 2015 2016 20172018 National Center also includes an Notes: Excludes townhomes. Includes data through August 2018. Autograph Collection hotel on the Sources: U.S. Census Bureau, Building Permits Survey; final data and analyst estimates; 2018 1st through 8th floors, a lounge preliminary data and analyst estimates on the 32nd floor, and a rooftop Housing Market Trends Rental Market Continued 16 swimming pool. Construction on for two-bedroom units, and $4,000 the exterior and on the first floor for three-bedroom units. of First National Center began in July 2018, whereas construction During the 3-year forecast period, at Residences at First National demand is estimated for 3,825 is slated to begin in early 2019, new market-rate rental units with completion of the entire (Table 1). The 530 units currently development expected in late 2020. under construction and 193 units Monthly rents at Residences at planned are expected to meet a First National are expected to be portion of the demand. Rental $1,625 for studio units and range housing demand is expected to from $1,475 to $4,000 for one- be greatest for one-bedroom bedroom units, $2,650 to $4,500 units at rents ranging from $886 to $1,085 (Table 5).

Table 5. Estimated Demand for New Market-Rate Rental Housing in the Oklahoma City HMA During the Forecast Period

Zero Bedrooms One Bedroom Two Bedrooms Three or More Bedrooms Monthly Rent Units of Monthly Rent Units of Monthly Rent Units of Monthly Rent Units of ($) Demand ($) Demand ($) Demand ($) Demand 695 to 894 20 886 to 1,085 820 1,199 to 1,398 600 1,499 to 1,698 65 895 to 1,094 20 1,086 to 1,285 400 1,399 to 1,598 520 1,699 to 1,898 50 1,095 to 1,294 15 1,286 to 1,485 270 1,599 to 1,798 340 1,899 to 2,098 50 1,295 to 1,494 10 1,486 to 1,685 220 1,799 to 1,998 170 2,099 to 2,298 20 1,495 or more 10 1,686 or more 110 1,999 or more 85 2,299 or more 10 Total 75 Total 1,825 Total 1,725 Total 190

Notes: Numbers may not add to totals because of rounding. Monthly rent does not include utilities or concessions. The 530 units currently under construction will likely satisfy some of the estimated demand. Source: Estimates by analyst COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE Oklahoma City, OK • Oklahoma City, 17 Data Profile

Table DP-1. Oklahoma City HMA Data Profile, 2000 to Current

Average Annual Change (%) 2000 2010 Current 2000 to 2010 2010 to Current Total Resident Employment 537,699 586,949 658,000 0.9 1.5 Unemployment Rate 2.7% 5.9% 3.5% Total Nonfarm Payroll Jobs 544,300 566,800 645,300 0.4 1.7 Total Population 1,095,421 1,252,987 1,401,000 1.4 1.3 Total Households 429,743 489,654 542,100 1.3 1.2 Owner Households 280,010 318,013 343,300 1.3 0.9 Percent Owner 65.2% 64.9% 63.3% Renter Households 149,733 171,641 198,800 1.4 1.8 Percent Renter 34.8% 35.1% 36.7% Total Housing Units 472,084 539,077 586,100 1.3 1.0 Sales Vacancy Rate 2.1% 2.2% 1.9% Rental Vacancy Rate 10.8% 10.4% 8.5% Median Family Income NA NA NA NA NA

NA = data not available. Notes: Median Family Incomes are for 1999, 2009, and 2017. Employment data represent annual averages for 2000, 2010, and the 12 months through August 2018. Median Family Incomes for HMA are not applicable because of differences in geography definitions between HMA and Fair Market Rent areas. Sources: Estimates by analyst; U.S. Census Bureau; U.S. Department of Housing and Urban Development COMPREHENSIVE HOUSING MARKET ANALYSIS COMPREHENSIVE Oklahoma City, OK • Oklahoma City, 18 Data Definitions and Sources makes an estimate of this additional construction activity. Some of these estimates are included in the discussions of single-family and multifamily 2000: 4/1/2000 — U.S. Decennial Census building permits. 2010: 4/1/2010 — U.S. Decennial Census For additional data pertaining to the housing market Current date: 9/1/2018 — Analyst’s estimates for this HMA, go to huduser.gov/publications/pdf/ Forecast period: 9/1/2018 – 9/1/2021 — Analyst’s CMARtables_OklahomaCityOK_18.pdf. estimates

The metropolitan statistical area definition in this report is based on the delineations established by Contact Information the Office of Management and Budget (OMB) in the OMB Bulletin dated February 28, 2013. Randall Goodnight, Economist Demand: The demand estimates in the analysis Oklahoma City HUD Regional Office are not a forecast of building activity. They are 405–609–8525 the estimates of the total housing production needed to achieve a balanced market at the end of the [email protected] 3-year forecast period given conditions on the This analysis has been prepared for the assistance as-of date of the analysis, growth, losses, and and guidance of HUD in its operations. The excess vacancies. The estimates do not account for factual information, findings, and conclusions may units currently under construction or units in the also be useful to builders, mortgagees, and others development pipeline. concerned with local housing market conditions Other Vacant Units: In this analysis conducted and trends. The analysis does not purport to make by the U.S. Department of Housing and Urban determinations regarding the acceptability of any Development (HUD), other vacant units include all mortgage insurance proposals that may be under vacant units that are not available for sale or for rent. consideration by the Department. The term therefore includes units rented or sold but not occupied; held for seasonal, recreational, The factual framework for this analysis follows the COMPREHENSIVE HOUSING MARKET ANALYSIS ANALYSIS COMPREHENSIVE or occasional use; used by migrant workers; and guidelines and methods developed by the Economic • the category specified as “other” vacant by the and Market Analysis Division within HUD. The Census Bureau. analysis and findings are as thorough and current as possible based on information available on the Building Permits: Building permits do not necessarily reflect all residential building activity as-of date from local and national sources. As that occurs in an HMA. Some units are constructed such, findings or conclusions may be modified or created without a building permit or are issued by subsequent developments. HUD expresses its

Oklahoma City, OK • Oklahoma City, a different type of building permit. For example, appreciation to those industry sources and state some units classified as commercial structures are and local government officials who provided data

Oklahoma City, Oklahoma Oklahoma City, not reflected in the residential building permits. As and information on local economic and housing a result, the analyst, through diligent fieldwork, market conditions.

For additional reports on other market areas, please go to huduser.gov/portal/ushmc/chma_archive.html.