Home sales involving Realtors — excluding those sold directly by owners or builders — fell 4.07 percent last month compared with April 2013, to 1,698, according to the Oklahoma City Metro Association of Realtors. Pending sales, however, rose 20.57 percent, to 2,321. So while homebuilding and sales are down from this time last year and prices stumbled into spring, Realtors and builders aren’t blaming the market alone. So what’s causing this stifling of the local real estate market?
1. Tighter lending standards. In the aftermath of the housing crisis, lenders are extra cautious about approving mortgage applications.
2. Low credit scores. Critics point out that minimum credit scores for loans backed by the Federal Housing Administration and Veterans Affairs are higher now than before the financial crisis and recession — and higher than should be expected considering the still-struggling national economy.
3. Rising prices. Though April prices were higher than May of this year, the year over year costs compared to 2013 are showing that prices are rising.
4. Competing with cash buyers. Aside from difficulties in financing, there is another problem for people even if they are approved for a mortgage—trying to snag a desired home over an all-cash buyer is a difficult problem many people looking to move to Oklahoma, as well as other areas, are experiencing.
5. Slow construction from the recession recovery has slowed not only new projects, but also limited the available inventory for interested buyers.