If you are looking at investing in the Omaha housing market as a potential investment opportunity, you must read till the end. The Omaha housing market has seen a lot of activity in recent years, with homes receiving multiple offers and selling quickly. In this article, we'll take a closer look at the current state of the Omaha housing market, including house prices and trends.
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.
Omaha Housing Market Trends
Omaha is one of the most competitive housing markets in the country, with homes selling in just seven days on average. According to Redfin Compete Score, an indicator of the competitiveness of a housing market on a scale of 0 to 100, Omaha scores 91. Most homes in Omaha receive multiple offers, often with waived contingencies, and sell for about 1% above the listing price. Hot homes can sell for about 4% above the list price and go pending in around three days.
House Prices and Trends
In March 2023, the median sale price of a home in Omaha was $255,000, up 2.0% compared to last year. The median sale price per square foot in Omaha is $148, up 3.5% since last year. Compared to the national average, Omaha's median sale price is 35% lower. However, the overall cost of living in Omaha is 7% lower than the national average.
While the median sale price has increased, the number of homes sold has decreased, with 393 homes sold in March 2023, down from 507 last year. These trends suggest that while the Omaha housing market remains competitive, it may be slightly cooling off.
Migration and Relocation Trends
According to Redfin.com user data, 0.09% of homebuyers searched to move into Omaha from outside metros. Los Angeles homebuyers searched to move into Omaha more than any other metro, followed by Lincoln and San Francisco. 74% of Omaha homebuyers searched to stay within the Omaha metropolitan area. Phoenix was the most popular destination among Omaha homebuyers, followed by Dallas and Washington.
In summary, the latest stats show that the Omaha housing market is highly competitive, with homes selling quickly and often above the listing price. While the median sale price has increased slightly, it remains significantly lower than the national average. As the market cools slightly, it may be a good time for buyers to take advantage of lower prices. However, with a decrease in the number of homes sold, sellers may need to adjust their strategies to remain competitive. Regardless, Omaha remains a desirable place to live, with many buyers looking to relocate to the area.
Omaha Real Estate Market Forecast 2023-2024
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 86.27 percent, which amounts to an annual average gain rate of 6.42 percent for Omaha homes.
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.
According to Zillow data, the Omaha-Council Bluffs real estate market is expected to continue its growth trend into 2023-2024. As of March 31, 2023, the average home value in the area is $272,927, which represents a 6.0% increase over the past year. Zillow predicts that the market will continue to rise in the coming year, with a forecasted increase of 2.0%.
Furthermore, homes in Omaha-Council Bluffs are selling quickly, with a median time to pending sale of just 6 days. This indicates a high demand for homes in the area, which is driving up prices. The median sale-to-list ratio as of February 28, 2023, is 1.000, indicating that homes are generally selling for their asking price.
In terms of sales activity, 28.4% of homes are selling over list price, while 43.8% are selling under list price. This suggests that buyers may still be able to find deals in the market, but they should also be prepared to compete with other buyers for desirable properties.
Looking at nearby areas, Fremont has an average home value of $206,620, Lincoln has an average home value of $271,737, Beatrice has an average home value of $163,853, Columbus has an average home value of $245,481, and Maryville has an average home value of $183,621. These values indicate that Omaha-Council Bluffs is relatively affordable compared to some neighboring cities.
Overall, the Omaha-Council Bluffs real estate market is expected to remain strong in 2023-2024, with continued growth and high demand for homes in the area. Buyers should be prepared to act quickly and potentially pay above asking price for desirable properties.
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 May 2023, the average rent for a 1-bedroom apartment in Omaha, NE is currently $950. This is a 4% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Omaha decreased by -4% to $930. The average rent for a 1-bedroom apartment decreased by -5% to $950, and the average rent for a 2-bedroom apartment increased by 2% to $1,373.
- The average rent for a 2-bedroom apartment in Omaha, NE is currently $1,373. This is a 10% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Omaha, NE is currently $1,800. This is a 13% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Omaha, NE is currently $2,200. This is a 7% 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 contact 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, 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
