The Tulsa, Okla., economy has some strong points, says remodeler Ken Klein. “Since ours is an oil-based economy, generally we have not had huge economic problems. Our cities do not have large budget issues, we have had very few subprime mortgage problems, and our home values increased a little in 2008,” the president of Kleinco Construction Services says. But weaknesses, including lack of buyer confidence and credit, are beginning to hurt small businesses.
“Housing starts are down over 25% last year from the year before. We know that major additions and alterations will follow that,” he says. With recessions in past years, new construction helped the state recover. “But builders can’t lead us out of this one due to overbuild conditions,” he says.
Klein says his peers are forecasting a drop in volume in 2009. Kleinco’s backlog is smaller this year than the same time last year, and job size is decreasing. “Even people with large equity in their home are looking at minimum maintenance — they would rather improve than build an addition,” Klein says. He points out that lower mortgage rates and refinancing might provide a marginal boost.