Oklahoma City Real Estate
If you want to invest in the heartland, Chicago is often the default choice because it is so big. Texas gets attention as home of 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 as a whole before discussing why you should consider investing in the Oklahoma City housing market.
Oklahoma City Real Estate Market Forecast 2019
According to Zillow.com, the median home value in Oklahoma City is $126,000. Oklahoma City home values have gone up 1.5% over the past year and the Oklahoma City real estate market prediction is that they will rise 1.9% in 2019. The median list price per square foot in Oklahoma City is $106, which is lower than the Oklahoma City Metro average of $114. The median price of homes currently listed in Oklahoma City is $188,000. The median rent price in Oklahoma City is $1,000, which is lower than the Oklahoma City Metro median of $1,103.
Foreclosures will be a factor impacting home values in the next several years. In Oklahoma City 0.1 homes are foreclosed (per 10,000). This is lower than the Oklahoma City Metro value of 0.4 and also lower than the national value of 1.6 The percent of delinquent mortgages in Oklahoma City is 2.1%, which is higher than the national value of 1.6%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Oklahoma City homeowners underwater on their mortgage is 8.8%, which is higher than Oklahoma City Metro at 8.5%.
Oklahoma City Real Estate Market Trend
As per Trulia.com, Oklahoma City real estate market trends indicate a decrease of $750 (-0%) in median home sales over the past year. The average price per square foot for this same period rose to $94, up from $94. Trulia has 2,166 resale and new homes in Oklahoma City lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. Trends in Oklahoma City show a 1% rise in median rent per month.
The median sales price for homes in Oklahoma City for Apr 26 to Jul 25 was $150,000 based on 1,691 home sales. Average price per square foot for Oklahoma City was $94, an increase of 0% compared to the same period last year. The median rent per month for apartments in Oklahoma City for Jun 25 to Jul 25 was $1,000.
10 Reasons To Invest In Oklahoma City Real Estate Market
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. The Oklahoma metro area grew from 1.25 to 1.4 million between 2010 and today. Here are 10 reasons to invest in the Oklahoma City real estate market.
1. 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 deposits. 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. The only exception is 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 the unit. Eviction can proceed five days after failing to pay the rent.
2. Steady Growth in 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 risks landlords losing all their equity when a hot market cools.
3. Housing Stock Growth Is Slow
Oklahoma City is issuing building permits for single family housing slowly. 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 demand for rental units in the surrounding area.
4. Long Term Potential
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.
5. Affordable Housing Stock for Investors
The Oklahoma City real estate market is notable for how affordable real estate is. The median value of an owner-occupied home according to the Census was $143,000 as of 2016. In 2018, the media value was $155,000. Despite this price appreciation, you can buy single family homes to rent out at a fraction of the cost of a California condo.
6. A Fairly Large Pool of Potential Renters
Kiplinger gave Oklahoma City a 3 for affordability by first time home buyers. The median household income is around $50,000. This means that there is a moderately large minority of residents who cannot afford to buy a home despite the relatively low cost of real estate.
7. Good Rental Rates
According to Census.gov, the median gross rent between 2012 and 2016 in Oklahoma City was around $800. However, the rental rate depends on where you live and how large the place is. For example, a one bedroom apartment in 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.
8. 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 Obama recession where housing fluctuated wildly before beginning to recover.
9. A Large Student Population
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.
10. 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 there are fewer potential renters who 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.
Important Tips For Beginners Investing In Oklahoma City
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.
If you are a beginner in rental property investing, it very important to read good real estate books. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Oklahoma City. Another market to go for diversifying your investments is the Dallas housing market. Dallas, TX is a great market because it has a strong economy and a constant population growth and will make your pockets bigger. As rents goes up smart investors should invest in Dallas.
Similarly, Houston is another great market for investing in real estate for your early retirement. Houston housing market is becoming a hotbed of buyer activity that could be really beneficial for real estate investors; just ask the multitude of overseas investors who are choosing Houston as the city of choice to invest in for the foreseeable future.
Single Family Rental Markets
We also recommend these 8 hottest real estate markets for investors looking to build their portfolio of single family rentals. Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
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Oklahoma City colleges
Cost of living, including rents
Landlord friendly https://www.avail.co/education/laws/oklahoma-landlord-tenant-law
Slow multifamily housing permits
Core to Shore downtown redevelopment
*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.