According to a report from Redfin, the online real estate brokerage, 29% of single-family homes for sale nationwide in the third quarter of 2022 were new construction. The number is the highest ever for the entire nation, but several states and cities exceeded that percentage by a substantial margin, including Oklahoma City, which came in second to El Paso (50%) at 43%.
The report attributes the explosion in new construction home sales to builders offering incentives to move much of the inventory that remains on hand after the pandemic and the subsequent slowing of the market when mortgage interest rates climbed to 7%. From the report: “Many of the metro areas with relatively high shares of new homes for sale have something in common: They ramped up building during the pandemic because they exploded in popularity with out-of-town buyers, and are now seeing significant slowdowns in their housing markets.”
The sheer number of Americans who relocated during the pandemic — whether back home or to more affordable areas like OKC — led to an explosion in new (and existing) home sales. Kara Bowes, broker and owner of KBB Real Estate, said the pandemic definitely altered people’s buying patterns.
“When everyone had to be home all the time, they wanted the stuff they would normally get away from home in their homes,” she said. “That meant remodels for some, things like outdoor kitchens or more amenities, but depending on the house, those kinds of remodels can be expensive. Older homes don’t always lend themselves to that sort of modification, and it’s also much harder to remodel for energy efficiency — another concern amidst rising costs — than to just build from scratch.”
Another factor in the explosion of new builds was home trends – the kind of trend for which SoSA is a great example. “New, sleek, clean modern homes have trended over the past few years,” Bowes said. “People see the look they want, and they want what they want, but it’s nearly impossible to remodel an existing house to look like that, so you either tear down an old one and start over, or you go build something new.”
Much of the new construction is happening on the periphery of OKC. Bowes said she sells as far north as Guthrie, and she’s sold in Nicoma Park, too. New builds were especially popular in the areas east and west, including Choctaw, Yukon/Mustang, Midwest City east of Tinker, east Edmond and far north Edmond, and even some in the Norman area.
“Over the past couple years we had a very unusual problem with existing homes, too,” Bowes said. “I had one property that had 24 bids on it, some of which were 50 to 60 thousand over list price. It’s easier just to go build what you want than get into a bidding war that leaves you paying $60,000 over the home’s value.”
The trend is slowing — both for new construction and existing homes — as interest rates rise to combat inflation, but some builders and banks are incentivizing the process by working together to do things like pay closing costs or setting aside designated funds to be loaned at lower rates. Bowes emphasized that this is exactly the reason potential buyers should speak to realtors: they track the trends and the opportunities.