Enid Housing Market Opportunities ERDA Annual Meeting 11 July 2013.

Enid Housing Market Opportunities

ERDA Annual Meeting

11 July 2013

Enid Housing Market PotentialERDA Annual Meeting 11 July 2013

Purpose of Study

• Document Enid’s growth• Evaluate housing market conditions• Assess potential for new housing development• Identify market obstacles• Propose strategic solutions


Research Approach

• Define Study Area

Garfield County

http://upload.wikimedia.org/wikipedia/commons/f/f4/Map_of_Oklahoma_highlighting_Garfield_County.svg


Research Approach

• In-person community visits – “windshield research”– Drive-around overview– Follow-up phone calls, other research

• Secondary source data gathering– Demographics– Economy– Housing market


Research Approach• Primary research– Interviews– Discussion groups– Employee survey – nearly 500 responses

• Groups who participated:– Employers– Developers / builders– City of Enid staff– Realtors– Others


Research Approach

• Synthesize quantitative data and qualitative information – “art and science”

• Perform “ballpark” quantitative demand analysis

• Refine and expand analysis with other data, qualitative findings, and professional judgment


Economic Context

• Garfield County has real, permanent job growth

Unemployment Rate

Time PeriodGarfield County Oklahoma United States

2010 4.9% 7.1% 9.7%

2011 3.9% 5.9% 9.3%

2012 3.5% 5.4% 8.6%

January 2013 3.7% 5.6% 8.5%

February 2013 3.5% 5.4% 8.1%

March 2013 3.3% 5.1% 7.6%

April 2013 2.9% 4.4% 7.5%

2002 2008 2012 20,000 21,000 22,000 23,000 24,000 25,000 26,000 27,000 28,000

Jobs

Source: Oklahoma Employment Security

Commission

Source: U.S. Bureau of Labor Statistics


Economic Context

• More permanent jobs coming

IndustryCurrent

Openings6-Mo

ProjectionAerospace 3 40Agriculture 2 2Banking 8 6Distributing 5 20Engineering 2 2Financial 8 8Grocery 5 20Insurance 1 2Manufacturing 209 186Medical 69 62Non-profit 1 1Oil & Gas 3 8Retail 0 2Service Company 9 5Transportation 20 2Utilities 2 2Unidentified - 70Total Current Openings 347 Total 6-Mo Projection 438

Source: Autry Technology Center


Economic Context• 2015 projection:

nearly 1,700 jobs identified, approx. 800 permanent

• Does not include indirect impacts

Projections

CompanyCurrent

Openings 6-Month12-

Month24-

MonthAutry Totals 347 438 75

City of Enid 7 7

Enid ISD 90 45 45

Flaming Auto Supply 9

Koch (F/T) 50

Koch (Temporary) 700

Northstar Agri 55

Northstar Agri (Temporary) 200

Unnamed Company 8 8

Unnamed Company 30

Unnamed Project 25

Totals 452 483 374 830

Cumulative 483 857 1,687Sources: ERDA, Autry Technology

Center, CDS Market Research


Demographic Trends

• Growing population and household count

Population Enid CityGarfield County

2012 Estimate 49,854 61,189

2010 Census 49,540 60,580

2000 Census 47,174 57,812

Growth 2000-2010 2,366 2,768

% Growth 2000-2010 5.02% 4.79%

Households2010 Census 19,832 24,175

2000 Census 19,105 23,175

Growth 2000-2010 727 1,000

% Growth 2000-2010 3.81% 4.31%

Sources: U.S. Bureau of the Census


Demographic Trends• Age trends:

Little kids, 30s, and empty nesters growing

City of Enid Garfield County

Population By Age 2000 2010

Change 2000-2010 2000 2010

Change 2000-2010

Total Population 47,174 49,379 2,205 57,812 60,580 2,768Under 5 years 3,228 3,931 703 3,876 4,590 7145 to 9 years 3,199 3,498 299 3,900 4,229 32910 to 14 years 3,180 3,031 (149) 4,037 3,865 (172)15 to 24 years 6,539 6,505 (34) 7,946 7,719 (227)25 to 34 years 5,832 7,134 1,302 6,989 8,286 1,29735 to 44 years 7,116 5,489 (1,627) 8,818 6,808 (2,010)45 to 54 years 6,048 6,739 691 7,528 8,633 1,10555 to 64 years 4,292 5,549 1,257 5,457 7,154 1,69765 and older 7,740 7,503 (237) 9,261 9,296 35Mean Age 38.4 36 38.4 37.3Median Age 37.3 36.7 37.5 37.3

Enid ISD Annual EnrollmentYear Enrollment Change % Change2004 6,461 2005 6,435 -26 -0.40%2006 6,349 -86 -1.34%2007 6,500 151 2.38%2008 6,529 29 0.45%2009 6,826 297 4.55%2010 7,002 176 2.58%2011 7,245 243 3.47%2012 7,528 283 3.91% Sources: Enid ISD

Sources: Bureau of the Census, 2000 and 2010 Decennial Census


Demographic Trends

• Education levels: Improving overall

• Bachelor’s or higher: equal to overall state level

• Slightly lower than OKC MSA level

2000 Census 2011 ACSGarfield County # % # %

Population 25 Years and Older 38,053 39,428

Less than 9th grade 2,057 5.4% 1,576 4.00%

Some High School, no diploma 4,699 12.4% 3,750 9.50%

High School Graduate (or GED) 13,557 35.6% 14,158 35.90%

Some College, no degree 8,449 22.2% 8,679 22.00%

Associate Degree 1,830 4.8% 2,149 5.50%

Bachelor's Degree 4,936 13.0% 6,483 16.40%

Graduate or professional degree 2,525 6.6% 2,633 6.70%

% HS graduate or higher 82.20% 86.50%

% Bachelor's degree or higher 19.6% 23.10%

Sources: Bureau of the Census


Demographic Trends

• Higher-income hh increasing

• Lower-income hh decreasing

• Still skewed to lower ranges compared to state, OKC MSA

Garfield County 2000 Households 2011 Households Change

Income Range Number % Number %2000-2011

23,220 23,754 534

Less than $15,000 4,669 20.1% 3,516 14.8% -1,153

$15,000 to $24,999 3,844 16.6% 3,064 12.9% -780

$25,000 to $34,999 3,825 16.5% 3,824 16.1% -1

$35,000 to $49,999 4,482 19.3% 3,919 16.5% -563

$50,000 to $74,999 3,739 16.1% 4,062 17.1% 323

$75,000 to $99,999 1,480 6.4% 2,470 10.4% 990

$100,000 to $149,999 779 3.4% 1,900 8.0% 1,121

$150,000 or more 402 1.7% 974 4.1% 572Average $42,048 $56,528 $14,480 Median $33,097 $40,626 $7,529



Demographic Trends

• Major income differences between home owner and renter population

• Median hh income:– Owners $49,703– Renters $27,160

Less

than

$5,000

$5,000 to $9,999

$10,000 to $14,999

$15,000 to $19,999

$20,000 to $24,999

$25,000 to $34,999

$35,000 to $49,999

$50,000 to $74,999

$75,000 to $99,999

$100,000 to $149,999

$150,000 or more

0%

5%

10%

15%

20%

25%

Owner-Occupied Renter-Occupied



Housing Profile

• Housing stock heavily skewed toward 1950 – 1979 (52.4%)

• 62.6% of renter hh in single family detached homes

2011 Estimate

Housing Characteristic Estimate PercentTotal housing units 26,832 100%

Occupied housing units 24,022 89.5%

Vacant housing units 2,810 10.5%

YEAR STRUCTURE BUILT

Built 2005 or later 663 2.5%

Built 2000 to 2004 737 2.7%

Built 1990 to 1999 1,496 5.6%

Built 1980 to 1989 3,331 12.4%

Built 1970 to 1979 6,400 23.9%

Built 1960 to 1969 3,846 14.3%

Built 1950 to 1959 3,797 14.2%

Built 1940 to 1949 2,529 9.4%

Built 1939 or earlier 4,033 15.0%Sources: Bureau of the Census


Market Conditions - Rental

• Multifamily rentals: mostly old, very tight market

Property Year Built OccCherokee Terrace NA 100%Colonial Plaza NA 100%Edgewood Arms NA 100%Indian Oaks 1980 100%LeChateau 1985 95-100%Mosher Drive Apartments 1960 99%Leona Mitchell Apartments 1970 75%Pheasant Run 2000 100%Randolph Village 1960 100%Rolling Meadow NA 100%Roosevelt Park 2009 100%Sandpiper 1975 95%Seven Pines Village 1982 100%Tuscana 2012 100%Winchester West 1973 100%Sunridge NA 100% Sources: Bass Construction, CDS

Market Research



• Single family rental market:– Occupancies essentially 100% per largest Enid

property manager– Typical rent for well-maintained moderate quality

house (2-3 br) $650– Up from 85% occupancy and $525 two years ago

• Not all landlords / managers meticulous about maintenance or tenant quality



• Supply so tight that tenants renting below means and ability – settling for lower quality

• Well-paid professionals renting in 1970s-1980s construction– Vance AFB, hospitals, police– Rents typically <$750

• One upscale multifamily property – Tuscana– 100% occupancy and wait list– Rents > $700 - $1,100


Market Conditions – For-Sale

• All signs point to sellers’ market

• May 2013 median price – 22% over May 2012, 34% over May 2011

2011 2012 20137580859095

100105

Average Days on Market

May 11Jul 1

1

Sep 11

Nov 11Jan 12

Mar 12

May 12Jul 1

2

Sep 12

Nov 12Jan 13

Mar 13

May 13$60,000$70,000$80,000$90,000

$100,000$110,000$120,000$130,000$140,000

Median Sales Price

Sources: EMAR, CDS Market Research


• Supply has plummeted

• Especially pronounced last 12 months

Market Conditions – For-Sale

123456789

10

12 Mo AvgCurrent Sales

Supply (months)

May 11Jul 1

1

Sep 11

Nov 11Jan 12

Mar 12

May 12Jul 1

2

Sep 12

Nov 12Jan 13

Mar 13

May 13150200250300350400450

Inventory



Market Conditions – For-Sale• Still large numbers of sales <$120,000

2009 2010 2011 20120

50

100

150

200

250

< $49,999 $50,000 - $79,999 $80,000 - $119,999 $120,000 - $159,999 $160,000 - $199,999 $200,000 - $249,000 $250,000 - $299,999 $300,000 +

Number of Sales by Price Range



Single Family Construction

• Drastic slowdown since 2011, despite demand

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

0

20

40

60

80

100

120

Single family construction, Garfield County

Sources: Garfield County Assessor, CDS Market Research



• Other Oklahoma markets better at supplying new homes during strong economy

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201205

101520253035404550

Enid Oklahoma

Single family permits per 10,000 residents

Sources: Bureau of the Census, ERDA, CDS Market Research



• Permit values much higher since 2008

19971998

19992000

20012002

20032004

20052006

20072008

20092010

2011$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

$260,000

$280,000

$300,000 Enid single family new home permit values

Sources: Bureau of the Census, ERDA, CDS Market Research


Employee Survey

• Online and paper survey promoted through Enid-area employers

• Nearly 500 responses• Wide range of ages, household types, incomes


Employee Survey

• Recent movers had much more difficulty finding housing

Housing was EASILY found to match the needs AND budget of my household.

Housing was found to match the needs AND budget of my household WITH DIFFICULTY.

Housing was found to match the needs of my household, BUT NOT my household’s budget.

Housing was found to match the budget of my household, BUT NOT its needs.

NO housing was found to match my household’s budget NOR its needs.

0% 10% 20% 30% 40% 50% 60%

Over 7 years 3-7 years 1-3 years Less than 1 year

Difficulty of finding housing vs. when they last moved


Employee Survey

• Strong bias toward low housing costs

Under $500

$500 - $749

$750 - $999

$1,000 - $1,249

$1,250 - $1,499

$1,500 - $1,749

$1,750 - $1,999

$2,000 or more

Not applica

ble0

50

100

150

RentOwn

Current housing monthly payments

020406080

100

Rent

Own

Willingness to pay for next home


Employee Survey

• Key reasons for a move:1. Home size (want larger)2. Lot size (want larger)3. Quality (want better)4. Neighborhood (want different)

• Strong preference for West Enid, for both owners and renters


Employee Survey

• Key housing selection factors:1. Price (over 70%)2. Size / number of bedrooms (over 70%)3. Physical condition (over 60%)4. Floor plan (over 50% owners, 33% renters)5. Neighborhood quality / character / amenities

(44% owners, 37% renters)6. Safety / security / crime (36% owners, 44%

renters)


Demand Analysis

• Examined historical ratios of population growth to job growth

• Low recent ratio – jobs drawing from pool of unemployed

• Unlikely to continue

Data Attribute 2005 2012 ChangeEmployment 22,971 26,970 3,999

Population 56,958 61,189 4,231

Est. household share 97.0% 97.0%

Est. household population 55,249 59,353 4,104

Household pop. / job 2.41 2.20 1.03

Single family construction 625

per additional job 0.16

Multifamily construction 150

per additional job 0.04

Sources: Bureau of the Census, Oklahoma Employment Security Commission, CDS Market Research


Demand Analysis• Apply jobs forecast and expected ratios of

population growth, household size, and tenureData Attribute 2010 Change 2012 Change 2015Employment 25,133 1,837 26,970 1,000 27,970Add'l population / add'l job 0.33 1.20Household population 58,750 603 59,353 1,200 60,553Persons / household 2.43 2.43 2.43Households 24,175 24,425 24,919

Owner-occupied share of HH 67.4% 67.4% 67.4%Owner-occupied units 16,302 169 16,471 333 16,804Renter-occupied share of HH 32.6% 32.6% 32.6%Renter-occupied units 7,873 81 7,954 161 8,115

Vacant share of total housing units 9.9% 8.9% 8.5%Total housing units 26,831 (15) 26,816 418 27,234

Sources: Bureau of the Census, Oklahoma Employment Security Commission, CDS Market Research


Market Opportunities - Rental

• Continued strong base demand for rentals, due to job growth, income levels, price of new housing– Especially affordable and mid-price rentals (<$850)

• Limited supply, has not responded to demand• Single family rental market harder to quantify

but definitely very tight– Reports of “doubling up”


Market Opportunities - Rental

• Market should support 250 to 400 units of new affordable rentals – mainly multifamily– LIHTC projects (Roosevelt, Pheasant Run)

• Upscale rentals – 75 to 100 new units supportable– Rents $750 to $1,100– Job growth + Vance AFB


Market Opportunities – For-Sale

• Supply-demand imbalance– Lack of new construction during job growth– Transfer of single family to rental market

• Development cost / willingness to pay mismatch– Higher local construction costs– Buyer preferences / constraints in pricing, features


Market Opportunities – For-Sale

• Demand perspective: overall need for 300 to 400 new single family homes by 2015– Household incomes indicate prime pricing range

$175,000 to $250,000– 30% to 50% of new homes should be in this range

• Development / construction cost constraints may limit market to $225,000 - $250,000– 75 to 150 homes


Market Responsiveness - Key Issues

• High development and construction costs relative to larger markets

• Existential fear – is economic growth real?– Coupled with concern over financial community

understanding of market• Lack of leadership and sense of purpose to

prioritize housing development


Strategic Recommendations

• Organize for information exchange and dialogue– Developers / builders– Finance and lending– Realtors– Public officials



• Assemble and distribute housing market data and information– Job growth (current and expected)– Rental market conditions– Single family lots– Developable properties– Incentives and assistance programs– Infill neighborhoods



• Program to mitigate temporary workers impact– Defray impacts on long term rental market– Innovative temporary housing techniques

• Investigate underlying reasons for higher development / construction costs in Enid– Potential for innovative, cooperative solutions


Strategic Recommendations• Public incentives for new housing– Special districts, infrastructure reimbursements,

code compliance assistance– Proactive land assembly / acquisition /

development prep• Examination of public development approval /

inspection process



• Application of residential habitation standards and tenant civil behavior codes– Helps infill housing market

Enid Housing Market Opportunities

ERDA Annual Meeting

11 July 2013

Enid Housing Market Opportunities ERDA Annual Meeting 11 July 2013.

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