Local Real Estate - An In-Depth Analysis of 2003 - 2007
We conducted a Grand Lake Area Real Estate Symposium in June 2008 for 100 local business, government and Real Estate people. The speakers included the Region Vice President for NAR, the Region Department of Commerce representative, the Oklahoma House of Representative member, and me, Jeff Savage.
For that Symposium, I prepared an in-depth study of the local Real Estate market, analyzing the last five years. I thought I would share some of my findings with you:
We have heard about the National real estate market and what is going on around the country. That does have some effect on our market as people try to sell homes in California, Arizona, Colorado and around the country to buy property at Grand Lake.
We have heard the Oklahoma State economy is running strong with 2.9% unemployment, which can influence the decision to buy property at Grand Lake.
Real Estate is local, and Oklahomans are buying or selling their homes in the local housing market.
NOW, let us focus on that local market, our four counties in Northeast Oklahoma including Delaware, Ottawa, Craig and Mayes.
Here are a few terms I will use, Dollar Volume - TOTAL dollars spent in that category.
Average Sold Price - TOTAL dollars spent divided by number of units sold.
Luxury Home Market. I took the upper 5% of the market, which in this case was $500,000 and up.
This study is based on information from the Northeast Oklahoma Board of Realtors for the period January 1, 2003 through December 31, 2007. This study includes MOST but NOT ALL real estate activity.
I studied area market performance for the last 5 years - 2003, 2004, 2005, 2006 & 2007. I will often focus on the last 3 years - 2005, 2006, 2007.
The Total Dollar Volume average for All Property Types for the last three years is $200 million. Similar to the Total Dollar Volume numbers Average Sold Price has continued to increase each year.
When I look at Water Front Homes, I see Dollar Volume increases similar to the Total Market values. The average for the last three years is $70 million, or 35% of the total market activity.
If I continue to look at Water Front Homes, I see similar increases in the Average Sold Price values. The average for the last three years is $290,000. In the last 5 years, I have seen over 11% increase per year.
When I look at the NON-Water Front homes, I see increases similar to the Water Front homes - SURPRISINGLY good for this category! The average for the last three years is $85 Million or 42.5% of the market.
When I look at the Average Sold Prices for NON-Water Front homes, the increases are similar to the Water Front homes.
The average is more flat for this category at $94,000. In the last 5 years, I have seen over 6.5% increase per year.
Luxury Homes ($500,000 or more) have really taken off. They represent 13.5% of the market.
The last three years I have seen - 2005 - $9.5 Million for 13 homes, 2006 - $28 Million for 39 homes, 2007 - $27 Million for 38 homes.
Looking at Water Front LOTS, I see Dollar Volume increases similar to the Total Market values. The average for the last three years is $4.6 million - a small segment of the total market activity. For Average Sold Prices for Water Front Lots, in the last 5 years, I have seen over 13.25% increase per year.
For Condos and Townhouses, I see a nice increase of 65% per year in TOTAL VOLUME over the last 5 years. They now represent 5% of the market.
For Farms and Ranches, I see some pretty consistent values. They are 6.5% of the market.
For Commercial Properties, I see some pretty consistent values and strong performance over the last three years. They represent 5% of the market.
If I look at the Number of Transactions for ALL Property Types, I see increases similar to the trends I saw with Total Market values. The average for the last three years is just under 1,500 transactions per year.
O.K Let's use some of this information I have gathered. Let's put $200,000 into the Stock Market - Dow Jones Average has grown 8.9% and S & P 500 has grown an average of 9.28%.
Let's put the same $200,000 into a Grand Lake Water Front Property.
Let's see what the future value of our $200,000 might be five years from now.
The Grand Lake Water Front home out-performed the stock market, $312,000 vs. $290,000.
And, I think we all agree we will have a lot more fun with our investment!
So . . . . .
The numbers show us we have a strong local real estate market,
Water Front Homes and Lots bring Buyers to Grand Lake, and those properties continue to perform well.
"Real Estate is local," said Tammy McCullar, OAR president, "and Oklahomans are not buying or selling their homes in a national housing market."