City Home Sales Pump Life into Dreary Industry / 'Everything Points to an Upturn in Real Estate Business before Much Longer
May, Bill, THE JOURNAL RECORD
Sales of existing homes through the Multiple Listing Service had slumped almost monthly since the peak in July 1983, when 1,009 homes were sold through the Multiple Listing Service. That year also ended up as the best sales year since 1978, with 9,216 homes sold.
Last year ended as the worst sales year of this area in 10 years, with total sales of 5,213. But the slump took a slight blip in December 1986 when 415 homes were sold, up 22.4 percent from the 339 homes sold in November 1986.
While sales slumped again in January to 280, the lowest number of sales for any month during the 1980s, they then began a monthly increase to 501 homes sold in April before leveling off at 501 homes sold in May.
That leveling off left 1987 calendar year home sales trailing 1986 figures by 1.
Talova Jones, president of the Oklahoma City Metropolitan Board of Realtors and broker with Abide Inc., said the sales figures are justifying new optimism in the market.
"Any time sales figures go up, it's a good sign," she said.
Judy Davis, broker of the Flair Agency, said she feels the market has bottomed.
"Everything points to an upturn in the real estate business before much longer," she said. "And, I think it's going to come back stronger."
Betty LeJeune, sales manager for Flair, said the home sales appear to be strong, even with the sudden spurt in interest rates in mid-May.
"We've had a lot of activity recently, but the higher rates seemed to slow things down a little," she said. "If the economy would level off, at any point, for a few months, that would encourage people to buy."
Numerous factors caused the slump in home sales, and several others things are slowing that slump.
Until mid-1984, the real estate industry, especially the residential end, was riding the crest of a false economy based upon an artificially high price of oil, analysts said.
Prices for homes became high, while mortgage interest rates shot up to 18-plus percent. Then the oil patch broke.
Builders, lenders, sellers and buyers were caught in the frenzy of trying to turn a profit in a seeminly never-ending economic boom. Suddenly there was no market - the city was overbuilt.
People who bought on the upswing when prices and interest rates were at their peaks found themselves in a strange predicament - their homes were worth less than they had paid for them only months earlier.
Then came the foreclosures which have reached record proportions. A record number of homes have been sold at sheriff sale this year. Governmental agencies and lending institutions are trying to unload thousands of properties they have acquired through default.
These record foreclosures and forced sales are what have caused some of the problems within the real estate industry and at the same time have spurred home sales.
Sellers with homes carrying good mortgages can't compete on a pricing level with sellers of homes with mortgages in default, so prices are driven down. Even with interest rates on a slight upswing, people in the industry say the current rate shouldn't deter purchases.
Most of them said this is now a buyer's market, that everyone in the industry is making money except the owner who is trying to sell. …