Q2 2012 Tulsa, Oklahoma Commercial Real Estate Economy

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Q2 2012 Tulsa, Oklahoma Commercial Real Estate Economy

The economic expansion of metro Tulsa continues, but the area is not attracting people the way it did in past booms—and the way booming Texas metro areas are today. According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm payroll employment increased by 8,400 (2.1%) from July 2011 to July 2012, including an increase of 9,100 (2.6%) in the private sector. Employment had barely increased in the previous 12 months. Household-based data from the BLS on the number of employed residents of the Metropolitan Statistical Area (MSA), including the self-employed, show a year-over-year increase of 11,800 (2.9%) in July. With the labor force rising by just 6,460 (1.5%), the unemployment rate is fast moving from a job-shortage level to a labor shortage level.

Despite the low unemployment rate, Moody’s Economy.com projects Tulsa’s population increase will merely match the U.S. average of 1.1%, which is 10,140 people here, in 2012. The increase in subsequent years is expected to be even smaller, reaching just 0.6% (6,180) in 2016. Housing prices are not discouraging would-be residents, as Tulsa has long been known for its affordability, and skipped the housing bubble entirely. According to the National Association of Realtors, the second quarter 2012 median existing home sale price was $136,500 in Tulsa, up 4.4% from a year earlier but well below the U.S. average of $181,500, which was up 7.3%. While household average income is relatively low here, it is up 3.3% from a year earlier.

“Mayor Dewey Bartlett called for an economic ‘renaissance’ in Tulsa in his State of the City address earlier this month, specifically emphasizing the need to fill manufacturing jobs and for passage of the Vision2 sales tax,” Tulsa Business.com reported in September. “Bartlett said a problem consistently reported to him by manufacturing companies for the oil and gas industry is there are not enough skilled workers to go around, so their only recourse is to try to fill vacant jobs by hiring them away from other companies in the area.” With 20,000 workers producing oil and gas equipment, Tulsa is second to Houston. “The mayor said he wants Tulsa to overtake Houston for that distinction, and showed a video made by the Tulsa Welding School, highlighting the fact their graduate’s average a starting wage of $16-18 per hour, which is higher than many starting salaries for degreed professions.”

The consumer-driven sectors of the Tulsa economy are weak. CES data shows employment in the Retail Trade sector fell by 1,200 (2.7%) in the year to July, with Leisure and Hospitality employment down 300 (0.8%). On the other hand, the Construction sector added 1,500 jobs (7.5%), an impressive increase after several years of decrease. The industrial sectors in general are adding jobs, with the Mining and Logging sector up by 300 jobs (3.8%) year-over-year in July, the Manufacturing sector up by 5,100 (11.1%), the Wholesale Trade sector up by 400 (2.6%), and the Transportation and Utilities sector up 600 (2.9%). On the other hand, the office-based sectors are mixed. While the Professional and Business Services sector had 2,200 more jobs (4.0%) in July 2012 than in July 2011, the Financial Activities sector had 400 fewer (1.8%) and the Information sector was down 400 (4.9%).

While employment growth has not been great here, according to Marketwatch.com the low cost of living makes Oklahoma in general, and Tulsa in particular, a good place to retire. “With its interesting architecture, quality shopping and myriad cultural offerings, Tulsa offers something not often associated with Oklahoma: Cosmopolitan living. Downtown Tulsa showcases an eclectic mix of Art Deco buildings that experts say rivals cities like Miami and New York.” The area has several art museums, an opera company, a ballet and a symphony orchestra. “And there are many shopping districts to choose from, including the eclectic Cherry Street, which is great for antiques and handmade crafts, the 165-store Woodland Hills Mall, or the chic Utica Square area.” The area also has many parks and golf courses.

Downsides of Tulsa for retirees, according to this source, include “the higher-than-average crime rate in the city (you’re not out in the country, after all). Still, the cultural and outdoor perks, excellent health care options, and low cost of living (the median home costs less than $93,000, and the cost of living is 11.6% below the U.S. average) balance that out for many.”