Framing a Strong Year: Housing Starts Just Shy of Record

RISMEDIA, Jan. 26, 2007-(MCT)-Tulsa-area home builders came just 62 permits short of breaking the construction record for the fourth year in a row. Still, the 4,849 homes started in 2006 pleasantly surprised those in the industry who were braced for a much slower year, including Tom Pepper, president of New Orders Weekly, a permit tracking service that provided the numbers.

"The year didn't go as badly as I had feared," Pepper said.

Glenn Shaw, president of the Home Builders Association of Greater Tulsa, said the area avoided most of the national construction slowdown, which had its greatest impact on the East and West coasts.

"Compared to the horror stories we heard nationally, we're tickled to death that we stayed so high," Shaw said. "We think the worst is over."

Though national home building slowed significantly last year, Tulsa kept a robust pace and stayed well ahead of the 4,276 houses built in 2004-also a record-breaking year.

"We thought 2004 was a tremendously good year when we hit it," Pepper said.

Last month, ground was broken for 374 homes, down 12% from the 429 started in December 2005. Pepper said the year-ago figure was "unusually high" for December.

Shaw said most of his colleagues are optimistic that 2007 will stay healthy for the industry or even be somewhat stronger, as local employment remains high and interest rates low.

Last week, mortgage giant Freddie Mac reported that the average fixed-rate, 30-year home loan was going for 6.23% across the nation, a two-month high.

Shaw said relatively low home prices in the Tulsa area have lured many people from other states, driving construction volume.

"I was just talking to someone from Shreveport (Louisiana), and they were just marveling at how much value they were able to get in the homes here," he said. "We're hard to beat in any part of the country."

Rick Ellison of Chesapeake Building Co. said the local home market appears stable and should remain that way for the first part of 2007.

"I think we're in a real good balance with supply and demand, so there's been no buildup of inventory," he said.

Ellison, who constructs high-end custom homes, said his business was slower last year than he was comfortable with, but he's working with more interested clients now.

"We've been seeing people out shopping, even in the ice and snow," he said.

Shaw said his company, Shaw Homes, performed well last year.

"In my personal business, 2006 was our best year, and we're expecting to do a little better this year," he said.

Pepper said he is less optimistic, believing that the new-home market may be reaching a saturation point.

"At some point, you'll sell new houses to everyone who had wanted one, so you're reliant on newcomers coming into the market," he said.

Even so, he predicted that Tulsa-area home building will decline slowly to a "soft landing."

Broken Arrow experienced greatest growth in new housing by a wide margin, with ground being broken for 896 homes in 2006. Tulsa followed with 689, then Wagoner County with 507, Rogers County with 383, Bixby with 340, Owasso with 332 and Jenks with 308.

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