Oklahoma Holding up despite Foreclosed for Sale Projections

by on States

Oklahoma has not been clobbered by foreclosures as sharply as other states because real estate prices in the state did not soar to outrageously high levels during the housing boom.

As a result, home prices in the state are holding up despite increasing job losses and despite expectations of a lot of foreclosed for sale units in the coming months.

Analysts said that foreclosures will arise from the failure of out-of-state investors who came to Oklahoma in droves during the last months of the housing boom to buy cheap rental homes. Many of these investors have not been able to pay their loans because of lack of renters and declines in rents.

In Oklahoma City, home prices have dropped only slightly. The federal tax credit offered to first-time home buyers helped significantly in holding up home prices, as home buyers were aided in their down payments.

In the past years, the energy industry has been propping up Oklahoma’s economy, but the recession has idled oil rigs and caused energy companies to cut jobs and operations.

According to Oklahoma real estate analysts, average home prices are expected to decline in several cities in the coming months in various degrees. Home prices in Oklahoma City, the biggest city in the state, are predicted to drop by an average of 4.8 percent.

Tulsa is predicted to have the smallest home price decline, as it had been able to resist price declines in 2008. The city is expected to suffer a 4.2-percent price decline during the rest of the year.

Additionally, there were fewer homeowners who took out option adjustable mortgage loans and other subprime loans in Tulsa, according to analysts. This fact will help prevent foreclosures that push down home prices.

In Lawton, the inventory of high-priced homes for sale is rising because of the declining level of consumer confidence among buyers in the higher-priced market. Another reason is the hesitation of banks to lend jumbo loans, drying up lending for buyers who want to move up. Among Oklahoma’s large cities, Lawton is expected to suffer the biggest price decline, which is 5.7 percent.

Residents of Edmond were largely protected from the start of the housing meltdown, having one of the least foreclosure rates in the nation. However, analysts predicted that the city will experience an average home price decline of 5.2 percent largely because of declines in the upscale portion of the market.