RealtyTrac released a housing market update on the Oklahoma City, Okla., area exactly one year after the Moore tornado hit the city.
Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 898 properties in Oklahoma City in the first four months of this year (January to April 2014), a decrease of 19 percent compared to the first four months of last year (January to April 2013) prior to the tornado.
“The decrease of overall foreclosure activity in Oklahoma City is economically driven by the growth and expansion of the city since the tornado hit,” said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty, covering the Oklahoma City and Tulsa, Okla. markets. “Unemployment is down resembling pre-recession levels and Boeing just completed its move into Oklahoma City, which has helped elevate the economy in the city and its surrounding communities.”
“A year after the Moore tornado devastated the southern part of Oklahoma City, we are starting to exceed pre-recession levels in all categories of the market,” Detrick added.
The Oklahoma City market continues to show improvement with more equity rich homes than seriously underwater homes. Out of all properties with loans 14 percent are equity rich while 10 percent are considered seriously underwater.
Bank repossessions spike immediately following tornado
In the four months following the tornado (June to September 2013), 458 properties in the Oklahoma City area were foreclosed on and repossessed by the lender (REO), a 58 percent increase from the four months before the tornado (January to April 2013).
“These properties were being held off the market by banks and lenders to keep from further devastating the market with an influx of defaulted properties,” said Detrick. “This created a large backlog of REO and foreclosure auction properties. As the market continues to get stronger these properties are being released, which explains the fluctuation and large increase in REO properties following the tornado.”
In the first four months of this year, 323 properties were repossessed by lenders, a 12 percent increase from the first four months of 2013 — before the tornado hit.
11 percent of all foreclosures in Oklahoma City vacant
As of Q1 2014, 11 percent of the 1,267 properties actively in the foreclosure process in Oklahoma City had been vacated by the owner — compared 21 percent of all foreclosures that are vacant nationwide.
“Vacant foreclosures pose a threat to the housing market in Oklahoma City because neither the distressed homeowner or the foreclosing lender are taking responsibility for maintenance and upkeep of the home — or at the very least facilitating a sale to a new homeowner more likely to perform needed upkeep and maintenance,” said Daren Blomquist, vice president at RealtyTrac. “These properties drag down home values in the surrounding neighborhood and contribute to a climate of uncertainty.”
Median home sale price continues to fall in Oklahoma City
The median price of residential properties sold in Oklahoma City in March 2014 was $119,250, down one percent from a year ago. March marked the sixth consecutive month where Oklahoma City median home prices decreased on a year-over-year basis.
“The drop in median sale price is due to Fannie Mae’s unloading of housing inventory during the months of December, January and February,” explained Detrick. “Small, less expensive homes tend to have Fannie Mae FHA loans, so when Fannie Mae released big chunks of its inventory into the market it caused home prices in the area to decline.”