Whey are there so many houses for sale in Edmond?

[Jeffrey Wong]

Hi folks, this is my first post in BP. I have been browsing the forum for a while. I'm considering buying a rental property in Edmond. My strategy is buy and hold for long term. It appears to me Edmond has a loooot of homes on the market - over 1k listings. This seems extremely high to me when compared to other markets. Is this a norm in Edmond, or is there something happening in the market driven by other forces going on right now? Appreciate your inputs!

[Micheal Briscoe]

I live in Edmond and may not have as much insight as an actual realtor, but Edmond is getting overbuilt.  Lots of new construction.  It's killed appreciation in certain price ranges.  My personal residence has had 0 appreciation in the last 5 years as they're still building new homes in my neighborhood.  Smaller/older homes in the price ranges/sizes that aren't typically being built anymore are still seeing gains.  Or flips in central (old) Edmond.  

Edmond still has great schools and lots of appeal.  I just find price/rent ratio hard to make rentals that lucrative here.  Easier to find deals down in OKC and the appreciation in central OKC has actually outpaced Edmond of late.  

[Jon Chung]

@Jeffrey Wong I talked to a few realtors in the area and they seemed to indicate that a lot of the supply up there was going rather quickly with multiple offers.

I wonder what are the factors making some sit on the market longer than others (I.e: age, price, #bed/bath) while others are going rather quickly.

Or is this being driven by people that think the market may be topped out and may fall due to covid and therefore are trying to sell at a perceived peak?

[Jeffrey Wong]

Thank you! I agree with what Micheal said about appreciation. I see many homes built 5-6 years ago were sold only slightly above the original purchase price. There was almost no appreciation looking at this time span, not even close to inflation rate. It just felt crazy considering the number of new houses being build now. A single zip code like 73012 has 83 new constructions listed, and 394 including all.

Jon, I was also told by some agent that certain homes get sold very quickly with multiple offers. Theres are usually at the price less than 150k. 

[Dylan B.]

@Jeffrey Wong Edmond is a very desirable area, not only for the school districts but also for the amenities and closeness to OKC.  There has been new construction being built here for a long time however the demand is there so I would say that builders are just meeting the demand. 

I also think it depends on the price range for the appreciation.  This is Oklahoma so homes will not appreciate like they do on the coastal cities. 

Historically, Edmond is on average a higher priced area than any of the surrounding towns in the OKC Metro.  Edmond is not a very high cash flow area unless you bought 10+ years ago.  If you are looking for cash flow, I would focus on other areas around or in OKC. 

[Kelsey P.]

@Jeffrey Wong

I echo what many have said here. For as long as I’ve been alive, Edmond is the fancier area to live. People felt like it was way more prestigious to live there.

That being said, it has bigger/more expensive houses on average than most parts of Oklahoma City. Of course there is the older part with smaller homes that aren’t as big yet for the most part the houses are just bigger and overbuilt with amenities. My bet too is that there are some people selling their Edmond home to get something bigger in the Oklahoma City area or just downsizing and living a more minimalist life.

Edmond covers a decently large area so it also might have more houses for sale because of the land size.

With the declining oil/gas industry, this might also be a factor as to why so many people are selling to move to find work.

[Micheal Briscoe]

@Kelsey P. excellent point on the O&G industry (my industry) affecting Edmond. 

Those from outside the region may not realize, but for the last 10 years many high paying O&G jobs are/were ‘mobile’ jobs, meaning where you worked had 0 bearing on where you could live or where you chose to live.  Many people like me probably chose to live in Edmond to raise their kids in a superior school system while traveling for work.  With the decline of O&G, Edmond doesn’t really have the employment infrastructure to support the massive amount of high end/luxury houses that are still being built.  

[Kelsey P.]

@Micheal Briscoe

All great points!

I think the tech/startup industry and those working from home (can write off their home as an expense) would be a good fit for Edmond.

[Ben Scott]

My wife and I are real estate agents and we're seeing average houses in Edmond enter into multiple offer situations. I think initially it was a lack of inventory and low interest rates. Now, I think the word is out that people are getting WAY over asking price for their homes, especially smaller, older homes which make cash flow rentals.

The 2500+ sq ft homes that are 6-7 years old ARE competing against new construction. So those folks typically aren't seeing appreciation because why pay X for your house when I can pay the same amount for a brand new home.

[Will Fraser]

One factor that I'd like to highlight in this convo is this:  the manner in which Edmond is developing (which is akin to Moore, Blanchard, Newcastle, Yukon, Mustang, Piedmont, Arcardia, Guthrie, etc ad infinitum) is almost always going to create the following:

- New construction homes demonstrate no appreciation during the first X years of ownership.

New construction neighborhoods have a "new car/old car" dynamic to them wherein while the builders are still slinging new homes, they'll always have the edge over someone who has already "taken the home for a spin."  But, once the builders have filled up the available lots and the new inventory has churned you'll typically see homes rise in value.  This is caused by the direct tie between scarcity and value.  When a builder is building them, they aren't scarce, therefore they aren't more valuable than they were a year ago. 

Enter the next challenging dynamic:  the way our peripheral cities are developing:  Buy Field, Develop, Build.  As long as there are more fields, there is a chance that the developers will finish one neighborhood of 75-250 homes and then immediately start developing the neighboring area.  As long as this doesn't introduce the exact same asset class it can be a neutral or a positive factor, but it is churns out 75-250 more of the same produce then you'll see longer period of "no-appreciation", otherwise known as "stagflation"

[Kelsey P.]

@Will Fraser

Great point!

Nothing breaks my heart more than to see a field or pasture get purchased and filled with homes.

I keep wondering: where are all these people that need a home? It makes me think of Field of Dreams: if you build it, they will come.

[Stephen Sokolow]

@Micheal Briscoe what is considered Old Edmond if looking at the city on a map? Also, are the flips you mentioned higher end flips or flips on the smaller older homes? 

[Micheal Briscoe]

@Stephen Sokolow again, not a realtor. But I’d consider ‘old’ Edmond the areas around UCO, more specifically just South. For flips, I see more going on in the smaller, older homes. The west side of Edmond is mostly new and overbuilt. Anything big you could flip you can almost find a new build, so why go to the the trouble. 

[Stephen Sokolow]

@Micheal 

@Micheal Briscoe thanks so much for the insight. Would love to connect and learn more about what you are up to out there. 

[Ben Scott]

I'd call 'old Edmond' anything by the University or from 2nd St south to 9th. Between Boulevard and Bryant. Homes in the Clegern area are going for crazy price per square foot the last 12 months. We're seeing more flips and new constructions thanks in large part to Clegern Elementary accepting more neighborhood kids. They used to be exclusively a charter school with no preference for local families.