If you are looking at investing in the Omaha real estate market as a potential investment opportunity, you must read till the end. Omaha, Nebraska is arguably the buckle of the corn belt. It is typically ignored by most, given how much attention is focused on the coasts. If it makes the news, it is generally because of a tornado or flooding of the Missouri River. However, this city on the prairie has a number of good things going for it, and they go well beyond being the home of Warren Buffett.
There are several reasons to consider investing in Omaha real estate. Omaha's low unemployment rate, combined with its low cost of living (especially when compared to its Midwestern neighbors), and safety, make it an attractive place for young professionals and young families seeking city life at an affordable price. New 2020 Census numbers showed the City of Omaha with an official population of 486,051 — a higher figure than officials had estimated.
That's a decadelong increase of 77,093 people, or 19% growth. Approximately 1.5 million people reside within the Greater Omaha area, within a 50 mi (80 km) radius of Downtown Omaha. The Omaha metro reached a record high employment level at nearly half a million in April. The state of Nebraska had the lowest unemployment rate at 1.9% in April 2022.
It represents an all-time low for the second straight month, and the April level remains tied for the lowest reached by any state in history. That’s according to the State Department of Labor’s preliminary and seasonally adjusted report. Is Omaha going to be one of the hottest real estate markets for investors in 2022? Let’s take a look at the latest Omaha housing market trends.
Omaha Housing Market Statistics
| Median Home Value | $215,800 |
| Median Household Income | $62,213 |
| Average Rent Per Month | $1,226 |
| Home Owners | 57.5% |
| Home Renters | 42.5% |
| Single-Family Homes | 64.9% |
| Townhomes | 4.1% |
| Apt. Complexes | 26.6% |
| 1-year Appreciation Rate | 17.44% |
Omaha Housing Market Trends 2022
Data by Redfin shows that the Omaha housing market is not very competitive. Most homes get multiple offers, often with waived contingencies. The average homes sell for about 5% above the list price and go pending in around 5 days. However, hot listings can sell for about 11% above the list price and go pending in around 3 days. Popular neighborhoods include Elkhorn, West Omaha, Millard, Dundee, and Newman Village.
- Homes for sale in Omaha have a median listing price of $265K.
- In May 2022, Omaha home prices were up 12.3% compared to last year, selling for a median sold price of $265K.
- On average, homes in Omaha sell after 5 days on the market compared to 5 days last year.
- There were 715 homes sold in May this year, down from 773 last year.
- Sale-to-List Price = 105.2%
- Homes Sold Above List Price = 67.3%
- Homes with Price Drops = 21.1%
Douglas County is a county located in the U.S. state of Nebraska. As of the 2020 United States Census, the population is 584,526. It is the state's most populous county, home to well over one-fourth of Nebraska's residents. Its county seat is Omaha, the state's largest city.
On Realtor.com, the median listing home price in Douglas County, NE was $260K in April 2022, trending 9.5% year-over-year. The median listing home price per square foot was $144. In a seller’s market, properties sell faster, and buyers must compete with each other to score a property. These market circumstances typically make purchasers eager to pay more on a house than they would otherwise. Therefore, sellers can enhance their asking prices.
Furthermore, the increasing interest implies that buyers rarely have the authority to haggle and are more likely to take houses as-is. There are 6 cities in Douglas County. Elkhorn has a median listing home price of $550K, making it the most expensive city. Ralston is the most affordable city, with a median listing home price of $235K. The median listing home price in Omaha was $249.9K, trending up 11.1% year-over-year. Let’s take a look at the latest Omaha housing market forecast for the next twelve months.
Omaha Real Estate Market Forecast 2022-2023
According to statistics compiled by NeighborhoodScout, home appreciation rates in Omaha have been above average over the past decade. The cumulative rate of appreciation over the past decade has been 71.86 percent, which amounts to an annual average gain rate of 5.56 percent for Omaha homes. Over the last Omaha's Omaha appreciation rates have trailed the rest of the nation.
Omaha's rate of appreciation over the past year has been 17.44 percent, which is lower than the rate of appreciation in the majority of American towns. The most recent quarter's housing appreciation rates in Omaha were 6.02 percent, which amounts to an annual appreciation rate of 26.34 percent. This shows that the Omaha housing market forecast is positive for the next twelve months.
Between 2019 to 2020, Omaha home values went up by 8.3% (ZHVI). Last year has been sizzling hot for sellers as over the past year alone the Omaha home values have gone up 14.48% and will continue to rise in 2022. The supply is very tight and with all the other factors considered, at this time, it is unlikely that the Omaha housing market will see a price decline in 2022.
As of May 2022, the typical home value in Omaha is $271,127, up 14.1% over the past year. The Omaha metropolitan area, officially known as the Omaha-Council Bluffs, NE-IA Metropolitan Statistical Area (MSA) is centered in the city of Omaha. The region consists of eight counties (five in Nebraska and three in Iowa) and extends over a large area on both sides of the Missouri River.
- The typical value of homes in Omaha-Council Bluffs Metro (68183) is $270,864, up 13.9% over the past year.
- The Omaha housing market forecast ending with May 2033 is positive.
- Zillow predicts that Omaha-Council Bluffs Metro home values may grow by 8.4% by May 2023.
- If this forecast is correct, Omaha home prices will be higher in the 3rd Quarter of 2023 than they were in the 3rd Quarter of 2022.
- Douglas County home values have increased 13.8% over the past year ($271,650).
- Cass County home values have increased 10.6% over the past year ($264,054).
- Sarpy County home values have increased 16.9% over the past year ($307,965).
- Saunders County home values have gone up 10.2% over the past year ($269,313).
- Washington County home values have gone up 12.6% over the past year ($318,830)
Here are the 10 best neighborhoods in Omaha to invest in real estate because they have the highest appreciation rates (List by Neigborhoodscout.com).
- East Omaha
- Downtown / Creighton University
- Long School / Highlander
- Leavenworth
- E.R. Danner
- Columbus Park North
- Walnut Hill / Bemis Park
- Leavenworth East
- Old Market
- Vinton Street
Omaha Real Estate Investment Overview
Is it worth buying a house in Omaha, NE? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Omaha is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Omaha housing market forecast for answers on why to put resources into this market. The market is bolstered by a limited supply of affordable starter homes and a healthy economy that attracts people from across the region to come here for work.
Omaha real estate investment has a strong, long-term future for one key reason – demographics. The average age of Omaha residents is 35, several years younger than the state average. This is partially due to the number of colleges within the Omaha housing market. It is also because many college students who graduate remain in the strong job market, settle down, and start families. This contributes to the slowly growing demand for Omaha real estate market in a region best known for small towns drying up.
Residents of Omaha have relatively few complaints compared to other major housing markets. They aren’t complaining about crime, insane rental rates, or a lack of services. Instead, they complain about the traffic. However, the government’s own Omaha real estate investment takes the form of infrastructure. The city has set up a metro transit system that serves downtown, and they’re working on expanding it. Omaha has connected its roughly forty miles of bike trails and dedicated bike lanes, too, to make it easier for people to bike instead of drive to wherever they need to go.
Investing in Omaha real estate will fetch you good returns in the long term as the home prices in Omaha are predicted to rise in the next twelve months. Let’s take a look at the number of positive things going on in the Omaha real estate market which can help investors who are keen to buy an investment property in this city.
Omaha City is Surprisingly Large
Omaha is the largest city in Nebraska. It is home to almost half a million people. Omaha is the center of the Omaha Metropolitan Area, a metro area that includes Council Bluffs, Iowa. This combined statistical area is home to almost a million people. Roughly 1.3 million live within a fifty-mile radius of downtown Omaha. This makes the Omaha real estate market one of the largest in the Midwest. However, size isn’t the only reason to consider Omaha's real estate investment.
Omaha has a Diverse Economy
Omaha’s economy is robust because it is so diverse. While agricultural products and services are part of the economy, it doesn’t dominate the local economy. For example, several financial firms have regional or national headquarters in Omaha. There are major insurance companies, railroads, and architectural firms in the area. As the major services hub for the region, there are hospitals, schools, and other service providers based in Omaha, each employing thousands.
This has contributed to the stable Omaha housing market and the roughly 3 percent unemployment rate. Nebraska’s latest unemployment rate of 1.9% represented an all-time low for the second straight month, and that April level remains tied for the lowest reached by any state in history. Only Utah has ever dropped to such a level, tying with Nebraska for the record low (Unemployment data go back to 1976).
You may read about how one state has higher property taxes than another, while a third state can advertise its lower income tax rate. What Nebraska offers is financial solvency. In 2018, Nebraska ranked the most fiscally healthy state in the nation. This is arguably more important than its relatively high 1.8 percent property tax rate.
Because they have enough money coming in to pay the bills and make debt payments, they won’t be jacking up the property tax rate to make up for a budget shortfall. On the flip side, the affordable Omaha housing market means that a roughly 2 percent property tax rate turns into a nearly 4,000 dollar-a-year property tax bill.
There is a Sizable Military Presence For Rentals
Offutt Air Force Base adds more than eight thousand jobs in the Omaha area, and it creates a large population of renters in the Omaha real estate market. More importantly to those considering Omaha real estate investment, the fact that Omaha’s economy is so diverse means that the Omaha housing market won’t crate if the base is downsized or outright closed.
The Omaha housing market also hosts a large number of students, though they don’t all attend the flagship University of Nebraska at Omaha. The affiliated medical center is notable for being one of the few dozen advanced cancer hospitals in the United States. Private universities in the area include Bellevue University, College of Saint Mary, Nebraska Methodist College, Nebraska Christian College, Doane College, and Creighton University.
This allows those considering Omaha real estate investment properties to own houses or condos close to multiple schools instead of tying their fortunes to one institution of higher learning. Rental rates have been climbing more slowly, but they have also been bolstered by the sizable military and student markets that are not as price sensitive as the average person working a service job.
As of June 29, 2022, the average rent for a 1-bedroom apartment in Omaha, NE is currently $965. This is a 12% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Omaha remained flat. The average rent for a 1-bedroom apartment increased by 2% to $965, and the average rent for a 2-bedroom apartment increased by 4% to $1,395.
- The average rent for a 2-bedroom apartment in Omaha, NE is currently $1,395. This is a 28% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Omaha, NE is currently $1,650. This is a 12% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Omaha, NE is currently $1,695. This is a 15% decrease compared to the previous year.
Omaha is a slow, steady, and growing real estate market that has quite a few things going for it. It is attractive to residents, allowing it to retain its youth, while it attracts people from across the country in search of work. That isn’t going to make the headlines, but it is exactly the sort of long-term value play that we’d associate with the Oracle of Omaha.
The other best place to invest in real estate in Tacoma, WA. Rents and property values in the Tacoma area are rising due to increased demand and constrained supply. This is an ideal time to buy. Furthermore, there are many reasons to consider investing in Tacoma real estate over homes and condominiums in nearby housing markets. The Tacoma housing market is ideal for those who want to rent to college students.
Being home to so many universities, it allows investors to diversify their holdings instead of being beholden to the reputation and enrollment of any particular school. Tacoma is home to the University of Puget Sound, the University of Washington Tacoma Campus, Faith Evangelical College, Pacific Lutheran University, and St. Martin’s University to name a few.
Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Omaha, NE is your ability to find great real estate investments in that area.
We, at Norada Real Estate Investments, strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability. Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you may fill up the form given here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
- https://www.zillow.com/omaha-ne/home-values
- https://www.neighborhoodscout.com/ne/omaha/real-estate
- https://www.redfin.com/city/9417/NE/Omaha/housing-market
- https://www.realtor.com/realestateandhomes-search/Omaha_NE/overview
- https://www.mercatus.org/bridge/commentary/why-nebraska-ranked-most-fiscally-healthy-state
- https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494
- https://smartasset.com/taxes/nebraska-property-tax-calculator
- https://realestate.usnews.com/places/nebraska/omaha
- https://en.wikipedia.org/wiki/Omaha,_Nebraska
- http://www.city-data.com/city/Omaha-Nebraska.html
