Downtown housing prices are soaring in Oklahoma City to an extent that they have more than doubled over the past decade.
That finding, part of a new report by the real estate tracking site Property Shark, shows Oklahoma City, Memphis and Atlanta were the only three of the 15 largest southern cities where downtown price growth exceeded citywide sale prices.
In some cities, downtown housing price growth dropped below citywide sales, a reversal in trends that were common until the pandemic. The report shows downtown Oklahoma City median home sales more than doubled to $690,000 over the past decade while the rest of the city rose by half to just $200,000.
Scott Holsey, a homebuilder with new homes being built along the east fringe of downtown, isn’t surprised by the report’s conclusions. Much of the for-sale housing built the past decade consists of homes built by Holsey along NE 14 and Walnut and at NE 7 and Oklahoma, more homes developed by Marva Ellard in Midtown, and an array of modern contemporary homes built in the SoSA neighborhood.
Another stretch of new housing is being built just west of the southern segment of Scissortail Park.
“When I started downtown four to five years ago, we were looking at $250 to $300 a foot for a smaller home,” Holsey said. “There are not a lot of guys, even on the outskirts, selling homes for $250 a foot. We’re all at $350 a foot properties with areas like Villa Teresa (in Midtown), and others are banking at selling for $450 to $500 a foot.”
The authors of the Property Shark report attribute Oklahoma City’s downtown sales price growth to the city’s low unemployment rate, job market health, and a cost of living that is still below the national average and below similarly sized metros. The report noted Forbes named Oklahoma City the third best city to move to in 2024.
Oklahoma City was the 14th fastest-growing city in the latest U.S. Census update. Oklahoma City grew by about 1% between 2022 and 2023, adding 7,589 people. And between the 2010 and 2020 Censuses, Oklahoma City was one of 14 American cities that added more than 100,000 people.
The Property Shark report cautions the housing price growth is not entirely good news.
“Locals are starting to feel the pressure of population growth, especially as out-of-state investors compete with would-be homebuyers — meaning prices will continue to grow,” the report warned. “Additionally, it must be noted that while downtown OKC has been historically more expensive, prices have skyrocketed since the pandemic. Specifically, downtown OKC stood at a median sale price of $261,000 in 2020, only to surge to nearly $700,000 in 2023.”
Holsey believes price inflation will slow new housing construction downtown.
“We’re seeing a slow down,” Holsey said. “It’s been a bit more of a grind. Some of the other guys are feeling the same thing. Downtown is a niche market. During the COVID days, it was a sure thing. You could ask $350 to $400 a foot and it was somewhat believable.”
The timeline for downtown housing, which often involves design review and special zoning, puts it into a multi-economic cycle, Holsey said, and combined with comparably high interest rates, it’s easier to predict housing prices in the suburbs.
Holsey also sees location and housing concept as key to whether a builder can achieve a good sales price while also selling without long delays. The Hill, a new downtown neighborhood being built in Deep Deuce, stalled for years until the Oklahoma City Urban Renewal Authority transferred development rights to homebuilder Greg McAlister.
McAlister, after doing a study of buyers’ interests, decided to introduce detached housing into the development instead of continuing to build all attached townhomes.
Holsey came to the same conclusion with his latest housing built along NE 14 and Walnut. Some areas, he added, remain popular despite extraordinarily high prices.
“If you’re looking through a microscope with SoSA, with some of these premium lots downtown, you’re definitely seeing higher demand despite a higher price per foot,” Holsey said.
Elsewhere, reality is starting to settle in.
“We’re at a place where we really need $400 a foot to turn a profit and that’s hard to do,” Holsey said. “The thought process is whether home prices are going to go down, some will have to liquidate and sell. The majority will hold the line.”
Jennifer Nakayama, president of Downtown OKC Partnership, said she saw changes in home prices from when she moved downtown in 2022 to what was being asked for housing last year. She said the rising housing sale prices are a “tell tale sign” of people believing in Oklahoma City and putting their money behind the city as a place to live.
It’s a trend, she said, that was already taking place prior to the pandemic. But it also conflicts with concerns voiced by residents and leaders about the diminishing lack of affordable housing downtown and citywide.
“I think the key moving forward is a mix of price points for appropriate housing,” Nakayama said. “The discussion is often about what is affordable, but it’s really about having accessible housing. We need to look at the downtown workforce and downtown proper and having quality housing available for those who want to live and work downtown.”
This article originally appeared on Oklahoman: Downtown OKC housing prices are skyrocketing. But will that continue?
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