THE FORECLOSURE FACTOR
conditions—could mean another year of steady, though not astronomical growth in Oklahoma City.
homes remain on market between two and three months) and steady but not stellar appreciation (around 3 percent last year and probably between 2 percent and 3 percent in 2016), the Oklahoma City housing market represents potential for investors looking to be in a location for the long haul. Thanks to the close ties between housing demand and the oil market but equally important employment diversity that keeps the area “plugging along” when oil prices are down, success- ful investors in Oklahoma City should be considering how to best build their portfolio now while the getting is good and then maintain that portfolio until the market inev- itably warms up once more. Oklahoma City has been dubbed “The Big Friendly” and “The Cin- derella City” thanks in large part to a massive redevelopment package launched by the metro area in the early 1990s. The initiative, called the Metropolitan Area Projects (MAPS), involved the addition of a variety of civic projects and activities to the city’s offerings and included a new baseball park, a central library, a conven- tion center, a water canal in the entertain- ment district complete with water taxis, and fairgrounds. MAPS is an ongoing project and is gen- erally considered one of the most successful public-private partnership undertakings in the United States. Downtown demand for housing, retail space and amenities skyrock- eted in the wake of its inception, and the project has continued to grow and expand for more than two decades now. While MAPS may have revitalized the downtown area, investors should remember that the draw of such an area is inherently limited when it comes to available housing and also to the market demographic that wants to purchase that housing and has the means to do MAKINGYOURSELF ATHOME INTHE “BIG FRIENDLY”
O ne of the most exciting things about Oklahoma City real estate for many in- vestors could be the foreclosure laws and tax lien laws in the state. With a steady market and a slight tightening on the starter-home end of the housing inventory, Oklahoma City is ideally positioned for investors who wish to acquire properties at a deep dis- count via foreclosure auctions or purchasing liens against properties. Foreclosures can be judicial or non- judicial, and happen relatively quickly, on a timeline of about 90 days from the initial filing. Lenders in the area tend to start the process of homeowner notification a little over a month after the original default occurs if no attempt is made to cure the problem. Tax lien auctions happen only once a year in the area, but properties that are not purchased at auction and remain unredeemed are also sold outright at a discount in this state. Note: Investors should be aware that homeowners involved in judicial foreclo- sures can demand that their properties not be sold for less than 66 percent of market value. All indications are that this option is very seldom utilized. so. However, the population of would- be residents who wish to live in a city with such a unique downtown area is much larger and growing all the time, thanks to steady, diverse jobs growth and expansion in the area. Focusing on starter homes that can either be sold to owner-occupants via conventional or creative financing or structured as cash-flow rentals is one of the best ways for a real estate investor to make a long-term home in Oklahoma City. •
OKLAHOMACITY’S EMPLOYMENT SITUATIONAND YOUR INVESTING STRATEGY While most people are blinded by the en- ergy industry when they look at Oklahoma City, the reality of the matter is that the ar- ea’s economy and jobs sector is more diverse than you might expect frommedia cover- age. The state alone employs nearly 47,000 individuals, while the U.S. military also maintains a solid presence. The University of Oklahoma and a variety of information technology, engineering and health-related employers also call the city home. On the whole, the unemployment situ- ation in Oklahoma City has been trending downward since the financial crisis in 2008 and 2009, and it has hovered below the national average since 2006 even at the height of the housing crisis and the Great Recession. At the beginning of 2016, the city was actually on Forbes’ top 20 list of cities with the lowest unemploy- ment in the country. So what types of investments are likely to strategically fit into the Oklahoma City population’s mindset about homeown- ership? Thanks to low unemployment, low cost of living and a wide variety of employment opportunities, the city has a growing population of would-be first- time homebuyers waiting in the wings for inventory to become available. As is the case in most of the country, Oklahoma City has a relatively tighter inventory in the starter-home sector than it does in other layers of the housing spec- trum, although investors should note that the city’s housing market is not as compet- itive at this point in time as other areas of similar size. In fact, the market is presently something of a buyer’s market, which means that investors wishing to establish a strong presence in cash-flowing rentals in the area may have better luck building a larger portfolio for less outlay than they might in other comparable metro areas. With the relatively cool housing market (according to Greater Oklahoma City,
Carole J. Ellis is the host of Real Estate Investing Today, a daily nine-minute investing podcast, and the editor of the Bryan Ellis Investing Letter.
thinkrealty . com / mag | 109
Made with FlippingBook Online document