By Carolyn Cole/Staff Writer
published Jan. 17, 2009

Housing starts fell to an eight-year low in Mustang in 2008 as east Canadian County began to feel the effects of the sagging national real estate market.

City officials issued 75 new home permits in 2008, down from 197 in 2007 and a record high of 308 in 2006. The last time this few permits were issued was in 2000 with 54.

Senior City Planner Melissa Helsel said the national economy and housing market woes are affecting Mustang builders. She said land availability isn’t an issue, and several developers have completed paperwork for new additions but are waiting to lay roads, sewer lines and other infrastructure.

“I know it will come back eventually,” she said. “There are larger forces at work.”

Here is a comparison of housing starts by month:

• January: 2008 — 8; 2007 — 7; 2006 — 25.
• February: 2008 — 14; 2007 — 11; 2006 — 19.
• March: 2008 — 3; 2007 — 32; 2006 — 33.
• April: 2008 — 3; 2007 — 11; 2006 — 42.
• May: 2008 — 7; 2007 — 23; 2006 — 45.
• June: 2008 — 9; 2007 — 17; 2006 — 43.
• July: 2008 — 9; 2007 — 22; 2006 — 23.
• August: 2008 — 5; 2007 — 16; 2006 — 27.
• September: 2008 — 12; 2007 — 11; 2006 — 13.
• October: 2008 — 3; 2007 — 13; 2006 — 18.
• November: 2008 — 0; 2007 — 26; 2006 — 11.
• December: 2008 — 2; 2007 — 8; 2006 — 9.

While fewer houses are planned, records showed the value of the homes has climbed. In 2008, the average value of planned homes was $176,638, or $13,632 more than the 2007 average of $163,006. The average home size was about 2,668 square feet in 2008.

Helsel said Shadow Ridge, Magnolia Trace and Sara Homestead were Mustang’s most active housing additions for growth in 2008.
“I think there are fewer spec(ulation) homes being built and more custom homes,” she said.

Some builders and bankers are shying away from constructing speculation homes, said Marolyn Pryor, past president of Oklahoma City Metro Association of Realtors. In speculative home building, developers construct houses to sell to a buyer later. With custom homes, builders get a commitment from a buyer before the home is built.

“Just for a house to sit there, some of the banks are afraid that if this (Oklahoma City) market turns like others, they don’t want to be holding the loan,” Pryor said. “When they see that our market is going to get better, things will be fine.”

Until November, she said the Oklahoma City area housing market seemed to defy national trends, and real estate in the western suburban communities was still thriving. Then real estate agents saw a 29-percent drop in sales from the previous November, and December registered a 13-percent drop from the previous year.

“I think so many people have heard so much on national news, they’re afraid,” she said.

At the local Coldwell Banker Select officer, which Pryor manages, she said sales continue to be “just as good or better than they were a year ago.”

“It seems that things are moving along pretty good as far as our sales or listings,” she said.

At First United, Dave Coleman said he’s noticed some properties remaining up for sale a little longer. Part of the problem could be sellers are holding out for top value prices above what buyers are looking to pay, he said.

“There are quite a few people buying,” he said.

Despite concerns about credit markets, financing is available to those with good to fair credit, Coleman said. Before entering the market, buyers need to know how much they can afford to pay each month for their mortgage and how much home that can buy them.

Buyers can still qualify for more loan than they can afford to pay and get in over their heads in mortgage debt, he said.

“People are wising up,” Coleman said.

Most builders are also able to obtain loans for speculation homes, Pryor said, but once the houses are built, their wealth is tied up in that property until they find a buyer.

“Things are a little bit on hold,” she said.