Market Forecast is an estimate based on data from multiple sources. While it is deemed reliable, it is not guaranteed.
If you want to invest in the heartland, Chicago is often the default choice because it is so big. Texas gets attention as the home to several of the fastest-growing and appreciating markets in the country. However, it is worth your time to look at smaller metropolitan areas that have similar potential without the same degree of risk. Let’s look at the Oklahoma City real estate market trends and forecast before discussing why you should consider investing there.
Oklahoma is one of the hottest housing markets in the nation. In the most recent annual population estimates released by the U.S. Census, Oklahoma City is now the 25th largest city in the United States. Since 2010, it has grown by more than 12%. There was already a shortage of housing supply, then when the pandemic showed up in March, many sellers decided to take their properties off the market.
This drove supply down even more, but the demand remained high in the Oklahoma City housing market. According to Zillow, home values are up by nearly 6% year over year in Oklahoma while in Oklahoma City they have gone up by 7.9%. Despite the rising prices, Oklahoma real estate is still highly affordable relative to most housing markets in the U.S.
If you’ve been thinking of investing or buying your first home in OKC, now could be a great time to act. Homeownership in Oklahoma is very affordable, as the median home price is still among the lowest in the nation. The median home value in the Oklahoma City metro area is around $155K. There is no better time to enter the market to buy a home than there is right now as home prices are very low compared to other parts of the country.
Although home price gains continue to accelerate low mortgage rates are giving buyers much-needed help. The State of Oklahoma also ranks No. 7 for the lowest average monthly mortgage payments in all 50 states.
According to Demographia’s 16th International Annual Housing Affordability Survey (2020), the 10 most affordable major housing
markets are all in the United States. Rochester is the most affordable, and Oklahoma City & Cleveland are the second-most affordable housing markets. The survey includes housing markets of eight countries across four continents.
According to the national property broker, Redfin, the Oklahoma City housing market is very competitive.
Homes in Oklahoma City receive 3 offers on average and sell in around 13 days.
The average sale price of a home in Oklahoma City was $215K last month, up 14.1% since last year.
Homes sell for about 1% below the list price and go pending in around 13 days.
Hot Homes can go pending in around 3 days.
Realtor.com’s November 2020 data shows that Oklahoma City is a seller’s real estate market, which means that more people are looking to buy than there are homes available. Sale-to-List Price Ratio is 100% — homes in Oklahoma City sold for approximately the asking price on average in November 2020.
The following real estate statistics were collected by MLSOK, Inc., for the time frame November 1 through November 30, 2020. While information is deemed reliable it is not guaranteed. Looking at these trends, it’s a seller’s market in the Oklahoma City Metro Area.
November 2020 Residential Sales
SUPPLY: New Listings increased 12.3 percent for single-family homes and 4.5 percent for townhouse-condo homes. Month’s Supply of Inventory decreased 44.0 percent for single-family homes but remained flat for townhouse-condo homes. There’s a shortage of housing inventory, mostly at entry-level price ranges.
SALES: Sales increased 26.9 percent for Single Family homes and 20.0 percent for Townhouse-Condo homes. Inventory
decreased 35.2 percent for Single Family homes and 3.3 percent for Townhouse-Condo Homes.
PRICES: Median Sales Price increased 14.8 percent to $207,500 for single-family homes but decreased 8.9 percent to $112,000 for townhouse-condo homes. The price forecast for 2021 is also positive.
DOM: Days on Market decreased 29.5 percent for single-family homes and 35.7 percent for townhouse-condo homes.
Listed below are the monthly Oklahoma City Metropolitan housing statistics for November 2020 as compared to October 2020 and November 2019. These statistics are also supplied by MLSOK, Inc.
November 2020
October 2020
November 2019
TOTAL CLOSED
2097
2535
1814
TOTAL $ VOLUME
$ 507,904,687
$ 626,606,793
$ 380,656,704
AVERAGE PRICE
$ 242,205
$ 247,182
$ 209,844
MEDIAN PRICE
$ 205,000
$ 205,000
$1,78,900
% SELLING PRICE TO LIST PRICE
98 %
98 %
97 %
DAYS ON MARKET
32
34
44
NUMBER OF LISTINGS
3449
3670
5916
Oklahoma City Real Estate Market Forecast 2021
What are the Oklahoma City real estate market predictions for 2021? According to Zillow, a leading real estate marketplace, the typical value of homes in Oklahoma City is $154,464, and in Jan 2012 it was $111,000. Since then, home values have appreciated by nearly 40%. Oklahoma City home values have gone up 7.9% over the last twelve months.
According to NeighborhoodScout’s data, appreciation rates for homes in Oklahoma City have been tracking above average for the last ten years. The cumulative appreciation rate over the ten years has been 33.44%, which equates to an annual average appreciation rate of 2.93%. During the latest twelve months, Oklahoma City’s appreciation rate has been 5.22%, and in the latest quarter, it’s been 0.32%, which annualizes to a rate of 1.28%.
LittleBigHomes.com publishes forecasts for the trend in home prices in 380 Metropolitan Statistical Areas. They estimate that the probability of rising house prices in Oklahoma City is 84% for the 3 years ending with the 3rd Quarter of 2021.
The highest annual change in the value of houses in the Oklahoma City Real Estate Market was 27% in the twelve months ended with the 1st Quarter of 1979. The highest growth in home values in the Oklahoma City Real Estate Market over a three year period was 76% in the three years ended with the 1st Quarter of 1980.
Here’s a short and crisp housing market forecast by Zillow for Oklahoma, Oklahoma City, and the Oklahoma City Metro. Housing inventory remains low in many major cities across the nation, and Oklahoma is no exception to that. According to their forecast, the supply and demand dynamics will likely push prices north again over the next 12 months.
This shows that Oklahoma City Area is a hot seller’s real estate market. There exists a limited supply of homes, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.
Oklahoma City home values have gone up 7.9% over the past year and the latest forecast is that they will rise 8.0% over the next 12 months. However, Oklahoma City real estate is still very affordable.
Oklahoma home values have gone up 6.5% over the past year and the latest forecast is that they will rise 7.6% over the next 12 months.
Oklahoma City Metro or Greater Oklahoma City is the largest metropolitan area in the state of Oklahoma, and it includes Canadian, Cleveland, Grady, Lincoln, Logan, McClain, and Oklahoma counties.
In the metro region, home values have gone up 6.6% over the past year and the latest forecast is that they will rise 5.5% over the next 12 months.
The chart below, created by Zillow, shows the growth of median home values since 2011 and their forecast until October 2021 (the green area).
Courtesy of Zillow.com
Graph Courtesy – Trulia.com
Oklahoma City Real Estate Investment 2021: Should You Invest Here?
Should you consider Oklahoma City real estate investment? Many real estate investors have asked themselves if buying an Oklahoma investment property is a sound investment decision? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2021. We’ve already discussed the latest market insights and forecasts for 2021. They show a positive growth trend for next year and it is the right time to invest and lock in low mortgage payments.
Oklahoma City is home to just over 600,000 people. The metropolitan area is home to over a million people. The Oklahoma City housing market is stable to strong because it is slowly growing. In 2019, about 1.41 million people lived in the Oklahoma City metropolitan area. Here are the top reasons to invest in the Oklahoma City real estate market in 2021.
Steady Growth in Oklahoma City & Its Property Values
The Oklahoma City real estate market is bolstered by steady population growth of 1% to 2% a year, both within Oklahoma City itself and the surrounding suburbs. This keeps housing prices and rental rates going with the rate of inflation if not better. However, it doesn’t create the boom or bust cycles that risk landlords losing all their equity when a hot market cools.
The Oklahoma City real estate market is bolstered over the long term by its excellent long term demographic trends. The median age is in the mid-thirties, several years younger than the rest of the country. A quarter of the population is under age 18, and because of the strong local economy, they don’t have to move away to find work. Expect locals to stay and raise their families here, keeping the local Oklahoma City housing market stable.
The Oklahoma City real estate market is notable for how affordable real estate is. The median home value in the Oklahoma City metro area is $158,337. Oklahoma has the country’s fourth-lowest median home values and its condos have the lowest. Despite steady price appreciation, you can buy single-family homes to rent out at a fraction of the cost of a California condo.
OKC also ranks among the top cities in a small business environment. Justbusiness.com ranked Oklahoma City as the fourth-best city to work for a small business. The business website used a combination of factors including establishment rate, growth rate, employees, average payroll, and housing costs into the equation. Oklahoma City’s 61.96 index score only trailed first-place New Orleans (74.20), Cleveland (67.27), and Buffalo, N.Y. (63.37).
According to the “Doing Business North America Report” released by ASU Center for the Study of Economic Liberty, OKC is the easiest place in North America to do business. The report looked at a variety of business factors with OKC scoring high in employing workers, low taxes, and ease of registering property.
Housing Stock Growth Is Slow
Oklahoma City is issuing building permits for single-family housing slowly. The new multi-family housing stock is slow to nonexistent. The Core to Shore redevelopment of downtown Oklahoma City will bring new commercial buildings to accompany the new convention center. However, this urban redevelopment plan does not include condo towers and apartment buildings that would lower the demand for rental units in the surrounding area.
Homebuilders started more houses in the first half of this year than last, despite the coronavirus pandemic and accompanying business shutdowns. With a shortage of housing inventory, mostly at entry-level price ranges, and persistent, historically low mortgage interest rates, builders roared into 2020 with 491 starts in January — an increase of 63.1% over January 2019 — then a 28.5% year-over-year increase in February.
The 2,674 homes permitted through June was an increase of 6.5% compared with the first six months of 2019, according to Norman-based Dharma Inc.’s Builder Report, which tracks home construction in Oklahoma City, unincorporated Oklahoma County, Bethany, Blanchard, Choctaw, Edmond, Midwest City, Moore, Mustang, Newcastle, Noble, Norman, Shawnee and Yukon.
Good Rental Market
Oklahoma City is notable for the relatively large number of colleges and universities in the area. There are five public universities in Oklahoma City and its suburbs. There are fifteen more private universities in and around the city. If you want to invest in the Oklahoma City housing market while catering to students, this diversity is a plus because the value of the housing isn’t tied to the rise and fall of one particular university.
According to Census.gov, the median gross rent between 2012 and 2016 in Oklahoma City was around $800. According to RENTCafe, 38% of the households in Oklahoma City, OK are renter-occupied while 61% are owner-occupied. Before the pandemic, average rent prices were growing at 2% annually.
As of November 2020, the average rent for an apartment in Oklahoma City, OK is $905 which is a 1.66% decrease from last year when the average rent was $920, and a 0.55% increase from last month when the average rent was $900.
One-bedroom apartments in Oklahoma City rent for $806 a month on average (a 2.61% increase from last year).
Two-bedroom apartment rents average $938 (a 3.2% decrease from last year).
The average apartment rent over the prior 6 months in Oklahoma City has increased by $6 (0.7%)
One-bedroom units have increased by $13 (1.6%).
Two-bedroom apartments have increased by $12 (1.3%).
However, the rental rate depends on where you live and how large the place is. For example, a one-bedroom apartment downtown costs around $800 a month to rent whereas you’d pay about $600 a month in the suburbs. A three-bedroom apartment in the suburb costs $1000-$1100 per month, whereas you’d pay $1300 or more per month for a three-bedroom apartment. Many residents would pay this amount or a little more to rent a single-family home, while the mortgage and property taxes on the property would let the landlord clear several hundred dollars a month.
Overall Market Stability
We touched on the topic of not wanting to end up buying at the peak of a housing bubble before the collapse. For those who want to know their investment will retain its value, you’ll appreciate knowing that Oklahoma City is one of the least volatile housing markets in the country. The FHFA home price index only showed year over year declines in four quarters between 2011 and 2016.
While these years aren’t the worst for real estate (see the 2007-2008 housing collapse), they reflect a large part of the recession where housing fluctuated wildly before beginning to recover.
It Is Better Than Tulsa in General
We think the Oklahoma City real estate market is a better choice for real estate investors than neighboring Tulsa for several reasons. Tulsa keeps showing up in lists for first time home buyers because it is more affordable than Oklahoma City. That means some fewer potential renters would pay well to rent a good single-family home or apartment.
Tulsa has twice the population density. That makes single-family homes for rent more expensive and harder to find for potential landlords. The smaller average household size in Tulsa reduces the share of the population that wants to rent a larger residence, as well. Oklahoma City has a slightly lower cost of living than Tulsa, as well, attracting more residents from out of state and improving profit margins for property owners.
It Is Landlord Friendly
Oklahoma in general is landlord-friendly. In general, you don’t need a rental license to be a landlord in the state. There is no payment grace period law. Interest isn’t owed on security deposits. Rental agreements longer than 12 months must be written; any agreement shorter than 12 months is valid whether oral or written.
Landlords can evict a tenant in Oklahoma City for failure to pay rent, criminal activity, and material breaches of the lease. If the landlord wants to evict them for a breach of lease, a ten-day written notice is required in which the tenant has to solve the issue. If they don’t, they can be given 15 days to leave.
If a landlord wants to evict a tenant for nonpayment of rent, he or she must first give the tenant a 5-day written notice for payment of rent. If the tenant does not pay rent within 5 days, the landlord may proceed with the eviction of the tenant. The only exception is a criminal activity that poses a health or safety threat to tenants and those around them – you can evict someone immediately for that. This includes illegal drug activity in a unit. Eviction can proceed five days after failing to pay the rent.
Conclusion
The Oklahoma City real estate market is an ultra-stable market with slow but steady increases in property valuations. There are pockets where you could tap into a large pool of renters such as around one of the many universities, though other neighborhoods are dominated by families that want more space but cannot afford to buy a home.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Oklahoma City.
Consult with one of the investment counselors who can help build you a custom portfolio of Oklahoma City turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Oklahoma City.
Not just limited to Oklahoma but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Oklahoma City turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of 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. This article aimed to educate investors who are keen to invest in Oklahoma real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
References
Market Data, Reports & Forecasts
https://www.zillow.com/oklahoma-city-ok/home-values/
https://www.littlebighomes.com/real-estate-oklahoma-city.html
https://www.redfin.com/city/14237/OK/Oklahoma-City/housing-market
https://www.realtor.com/realestateandhomes-search/oklahoma-city_OK/overview
https://www.neighborhoodscout.com/ok/oklahoma-city/real-estate#description
https://okcfox.com/news/local/oklahoma-forward-riding-the-housing-market-roller-coaster-during-the-pandemic
Rental Trends
https://www.rentcafe.com/average-rent-market-trends/us/ok/oklahoma-city/
https://www.rentjungle.com/average-rent-in-oklahoma-city-rent-trends/
Low volatility
https://smartasset.com/mortgage/best-cities-first-time-homebuyers-2017
https://www.bestplaces.net/compare-cities/tulsa_ok/oklahoma_city_ok/people
Cost of living, including rents
https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&city1=Tulsa%2C+OK&country2=United+States&city2=Oklahoma+City%2C+OK
Landlord friendly
https://www.avail.co/education/laws/oklahoma-landlord-tenant-law
Core to Shore downtown redevelopment
https://newsok.com/article/5571657/major-players-in-oklahoma-citys-downtown-development-to-speak-dec.-4
https://www.okc.gov/government/maps-3/projects/downtown-convention-center
Slow multifamily housing permits
https://www.greateroklahomacity.com/subresources/economic-indicators/
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