Oklahoma City- America’s #1 Recession-Proof City

Some people say it’s impossible to make predictions about the economy.

I disagree.

I moved to Oklahoma City in September 2006 expecting its housing market to remain stable through the coming recession. The market is beginning to confirm that expectation.

Forbes recently made a list of America’s top ten recession-proof cities (out of the fifty largest cities).

Oklahoma City is #1 on that list.

Nationally, home prices are falling, unemployment is on the rise and the economy is expected to grow slowly–or even contract–in the first half of the year.

But some cities are doing just fine.

Take Oklahoma City, Okla. With falling unemployment, one of the country’s strongest housing markets, and solid growth in agriculture, energy and manufacturing, it looks best positioned among the nation’s largest metropolitan areas to ride out the current crisis.

Forbes is good about providing evidence to support their rankings. Here’s their analysis of Oklahoma City:

Oklahoma City, Okla.
Median home price: +8.2%
Unemployment: 3.5% (from 4.7% in February 2007)
Key growth: Leisure and hospitality, +6%; construction +11.5% from 2007

Did someone say something about a recession? With falling unemployment, one of the strongest housing markets in the country, and strong growth in agriculture, energy and manufacturing, Oklahoma City might not have received the recession memo, and it looks best positioned of the nation’s metropolitan areas to ride out the current crisis. Booming valuations of Oklahoma City’s largest companies, like Devon Energy and Chesapeake Energy, suggest the energy sector is the right place to be.

The price of oil may fall in a recession as it has in the past. That would hurt Oklahoma City’s housing market. Despite this, our cost of living is so low that housing doesn’t have much room to fall before bottoming out.

We all make predictions about the economy, whether we realize it or not. Someone who chooses to live in San Jose, CA is inadvertently betting that housing prices won’t drop there - or he is willing to accept whatever decline occurs. His neighbor, who moves to Oklahoma City or Houston, is also making a bet. It’s simply a more conscious one.

What are you betting on this year?

Real Estate Investors’ Clubs

I just got back from a Mastermind Group meeting sponsored by Millionaire Possibilities, a real estate investors’ club in Oklahoma City.

If you’re considering investing in real estate, it’s a good idea to attend the investor club meetings in your area. The more experienced members of these groups are in touch with the market. They can help you develop a business strategy, even a slower market like this one.

The clubs are also a good way to get leads on properties, find contractors, and network with other investors.

Here’s a quick summary of how the clubs in the Oklahoma City area have helped us in the last month:

• We received leads on two newly built, overleveraged houses in Oklahoma City through members of the club. Since the homeowners have missed payments and owe more than their houses are worth, we’re doing short sales on both.
• One of our short sales was approved in Edmond, OK. We’re listing it on the MLS through a club member.
• We bought a house in Edmond by taking over the existing loan and did three weeks of rehab work using contractors from the clubs. The first person who walked through the finished house put the house under contract and has agreed to close by May 1.
• Three members of the club called me to ask for advice about whether to buy houses they had put under contract. After hearing how much work the houses needed, I advised them to consider whether they’d be able to make any money on those houses after paying for rehab work, interest on their loans, Realtor commissions, and closing costs. They decided to use the inspection contingencies in their contracts and will not be buying those houses.

Use the links below to find real estate clubs in your own area. After you visit, post a comment here and let us know what the meetings in your area are like.

List of clubs at the REIclub Web site

List of clubs at the CREonline Web site

Robert and Angel Elder are the founders of Millionaire Possibilities.