Oklahoma City Real Estate Investment
When an auto plant closes, it’s usually bad news for the local economy.
When that factory is a mammoth, 4-million-square-foot operation with thousands of highly paid union workers, the shutdown usually means disaster.
Not in Oklahoma City, where the unemployment rate is low and personal income is soaring.
The General Motors plant closed in 2006, but was quickly reinvented as an aerospace repair operation for neighboring Tinker Air Force Base, one of the military’s largest repair facilities.
The current recession has put much of the U.S. on an economic losing streak. But a few places, including Oklahoma City, have missed most of the pain.
This city is perhaps the most surprising. Construction cranes are busy here. New medical buildings are underway. Buildings are being renovated in the historical Bricktown neighborhood. Oklahoma City’s June unemployment rate of 6% was the second-lowest in the nation for metropolitan areas with 1 million or people, says the Bureau of Labor Statistics. Its per-capita income grew 6.9% in 2008 to $40,942, compared with a year earlier, the Commerce Department reported last week. That growth made the city No. 1 in the USA for large metro areas.
What’s Oklahoma City’s secret? “Luck, as much as anything,” says Roy Williams, Chamber of Commerce president and a former economic developer in Phoenix and Ohio. “We’re doing the right things, in the right place, at the right time.”
Government as a strong jobs base
Of the five big metro areas with the lowest unemployment rates — Salt Lake City, Oklahoma City, Washington, San Antonio and Austin — four are state or U.S. capitals and all have a large government workforce.
Oklahoma City’s economy is not only diversified but, by coincidence, is strong in areas that are thriving — or at least not collapsing — in this recession:
•Government jobs: As a state capital, it has a jobs base that enjoys the stability of government — federal, state and local. Despite budget shortfalls across the USA, state and local government are among the few parts of the economy that have added jobs during the recession.
•Medical and education jobs: Oklahoma City has large medical facilities and universities, types of employers that have held up well in the recession.
•Energy jobs: Oklahoma City is home to the state’s two largest oil and gas companies, Devon Energy and Chesapeake Energy.
The city also escaped the real estate bubble.
The area’s median housing price is $129,900, up 4% from a year earlier, according to the National Association of Realtors. Nationally, housing prices were down 14% during that time.
“Our highs are not high, and our lows are not low,” says Michael Bernard, president of the Mid-Continent Oil and Gas Association of Oklahoma.
Retooling a factory
The city’s economic good fortune has been remarkable — even in failure.
Oklahoma City tried to become a hub for manufacturing airplanes, expanding on the aerospace industry that surrounds the Air Force base, says Mayor Mick Cornett, a Republican. “Then comes the recession. People don’t buy new planes. They repair what they’ve got. Oklahoma City does repair and overhaul. Voilà! Better be lucky than smart,” he says.
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