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.
Latest Omaha Housing Market Trends 2023
According to Redfin, as of October 2023, Omaha's housing market has shown remarkable resilience and growth. The median sale price for homes in Omaha stands at $265,000, marking a substantial 7.5% increase from the previous year. Homes are selling at a rapid pace, with an average of 12 days on the market, reflecting a slight increase from 9 days the previous year. Despite a slight dip in the number of homes sold, the market remains robust with 438 homes changing hands in October.
The Omaha housing market is highly competitive, earning a Redfin Compete Score™ that rates the area on a scale of 0 to 100. With homes often receiving multiple offers and selling close to list price, the demand is evident. Hot homes, in particular, can sell for approximately 3% above list price and go pending in just 4 days, emphasizing the intense competition among buyers.
Sale-to-List Price Ratio
The sale-to-list price ratio for all home types in Omaha is 99.7%, indicating that homes are generally selling very close to their listed prices. This underscores the competitive nature of the market, with buyers willing to meet the asking price to secure their desired property.
Additional Trends in the Market
- Affordability of Home Prices: Home prices in Omaha continue to remain relatively affordable compared to other major cities, with the median home sale price being 35% lower than the national average.
- Strong Job Market: The job market in Omaha is robust, boasting an unemployment rate of 3.2%, which is below the national average. This bodes well for the housing market, as it indicates increased affordability for potential homebuyers.
- Population Growth: Omaha's population has experienced a growth of approximately 10% over the past decade. This influx of residents is advantageous for the housing market, driving up demand for homes.
If you're considering buying a home in Omaha, teaming up with a qualified real estate agent is essential. They can guide you through the market intricacies, helping you find the ideal home that aligns with your needs and budget.
Omaha Housing Market Forecast 2023-2024
Delving into the housing market forecast by Zillow provides a comprehensive understanding of the real estate landscape in Omaha-Council Bluffs. As of October 31, 2023, the average home value in the Omaha-Council Bluffs area stands at $276,667, reflecting a substantial 5.7% increase over the past year.
The market dynamics indicate a swift pace, with homes typically going to pending status in approximately 9 days, highlighting the region's robust demand and efficiency in closing real estate transactions.
Market Metrics Snapshot (September 30, 2023)
- Median Sale to List Ratio: 1.000
- Median Sale Price: $282,000
- Median List Price: $301,000
- Percent of Sales Over List Price: 40.7%
- Percent of Sales Under List Price: 36.0%
- Median Days to Pending: 9 days
These metrics provide a snapshot of the Omaha-Council Bluffs housing market, offering insights into pricing trends, market competitiveness, and the pace of home sales.
Omaha-Council Bluffs Housing Market Forecast
Zillow's 1-year market forecast for Omaha-Council Bluffs, as of October 31, 2023, projects a 0.5% increase, indicating a positive outlook for the coming year. This forecast aligns with the current upward trend in home values, showcasing the resilience and growth potential of the Omaha-Council Bluffs housing market.
The forecast is further supported by market metrics, including 2091 homes for sale and 1036 new listings reported as of October 31, 2023. Additionally, the median sale to list ratio of 1.000 indicates a balance between listing and sale prices, contributing to a healthy and stable market environment.
Are Home Prices Dropping?
As of the latest data available, there is no indication of a widespread decline in home prices. In fact, many regions, including Albuquerque and Omaha-Council Bluffs, have experienced positive year-over-year growth in average home values. Albuquerque's average home value has increased by 3.2% over the past year, reaching $320,000, while Omaha-Council Bluffs has seen a 5.7% increase, bringing the average home value to $276,667. However, it's crucial to note that real estate conditions can vary by location and are subject to change based on various economic factors.
Buyer's or Seller's Housing Market?
The determination of whether it's a buyer's or seller's market depends on factors such as inventory levels, demand, and pricing dynamics. In Albuquerque, the housing market is described as somewhat competitive, with homes typically receiving 4 offers and selling within 21 days.
The Redfin Compete Score™ rates the area's competitiveness, indicating that some homes get multiple offers, and hot homes can sell above list price. Omaha-Council Bluffs, on the other hand, exhibits a fast-paced market, with homes going to pending status in approximately 9 days. The 40.7% of sales over list price in Omaha suggests a competitive landscape, potentially leaning towards a seller's market.
Will the Market Crash?
While predicting market crashes is challenging, current indicators do not suggest an imminent crash. Both Albuquerque and Omaha-Council Bluffs show positive trends in terms of home values, demand, and market activity. Economic factors, interest rates, and regional influences play significant roles in shaping the real estate market. Continuous monitoring of market conditions, staying informed about economic trends, and consulting with real estate professionals can provide a clearer picture of the market's stability and potential risks.
It's essential for buyers and sellers alike to stay informed about local market dynamics and consult with real estate experts to make well-informed decisions in the ever-evolving landscape of the housing market.
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 November 2023, the average rent for a 1-bedroom apartment in Omaha, NE is currently $995. This is an 5% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Omaha decreased by -1% to $985. The average rent for a 1-bedroom apartment remained flat, and the average rent for a 2-bedroom apartment decreased by -2% to $1,368.
- The average rent for a 2-bedroom apartment in Omaha, NE is currently $1,368. This is a 6% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Omaha, NE is currently $1,845. This is a 5% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Omaha, NE is currently $2,200. This is a 16% increase 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.
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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.