Why Oklahoma City's Real Estate Market Is a Good Investment in 2020

Real estate investors buying and holding cash flowing rental property for the long-term may find exactly what they’re looking for in Oklahoma City. 

As one local real estate broker told local news station OKC Fox, “Nice thing about Oklahoma is we actually stay pretty steady in our pricing with a slight increase. It doesn’t jump up really high and it doesn’t drop low and it’s because of our industries here; we are really diversified.”

Oklahoma City is the capital and largest city in Oklahoma. Government, defense, and the natural resources sectors are the largest economic drivers in the region. Thanks to business-friendly government incentives to grow the job market, the aviation and aerospace, bioscience, financial services and international trade sectors are keeping the economy diverse and housing market robust.

Keep reading to learn why rental property in Oklahoma City will still be a smart investment in 2020 and beyond.

 

Population Growth

The population of Oklahoma City has grown twice as fast as the national average, according to the OKC Chamber of Commerce. In fact, between 2010 and 2015 Oklahoma City was the 10th-fastest-growing metropolitan area in the U.S.

Key Population Stats:

  • Nearly 650,000 people live in Oklahoma City, and nearly 1.4 million people reside in the greater metropolitan area.
  • Oklahoma City spans more than 620 square miles and is the second-largest city in the U.S. by area just behind Houston, with plenty of room for growth and development.
  • Between 2010 and 2018 the metro population of Oklahoma City grew by nearly 14%.
  • Based on an annual population growth rate of 1.55%, the Oklahoma City metropolitan area will be home to 1.52 million people by 2023 and will have nearly 2 million residents by 2040.
  • The population of Oklahoma City is diverse: about 70% are white, 13% Hispanic or Latino, 11% African-American, 4% Native American, and 3% Asian.
  • Median age in Oklahoma City is 35.5 years, with 27% of the population younger than 19, and more than 70% between the ages of 20 and 64 years old.

 

Oklahoma City

Job Market Trends

A recent report by Velocity OKC expects economic and job growth in Oklahoma City to remain strong and healthy. Jobs are growing at both the local and state level, with most employment sectors showing healthy year-over-year payroll gains.

Key Employment Stats:

  • GDP of Oklahoma City is nearly $75 billion, increasing about 30% over the past 10 years.
  • Job growth in Oklahoma City increased 2.2% last year, with unemployment at just 3%.
  • The cost of living in Oklahoma City is 6% below the national average.
  • Chesapeake Energy and Devon Energy are two Fortune 500 companies headquartered in Oklahoma City.
  • Major government employers in Oklahoma City include the State of Oklahoma, the Federal Aviation Administration, the City of Oklahoma, and United States Air Force – Tinker AFB.
  • Major healthcare and biotechnology employers in metro Oklahoma City include Integris Health, University of Oklahoma Health Sciences Center, SSM Health Care, and OU Medicine. 
  • AT&T, Sonic Corporation, The Boeing Company, The Hertz Corporation, United Parcel Service, Johnson Controls, MidFirst Bank, and American Fidelity Insurance are some of the other major corporations and large businesses in Oklahoma City.
  • Economic sectors in Oklahoma City showing the healthiest annual job gains include oil and gas, administrative support, leisure services, wholesale trade, manufacturing, and business and professional services.
  • Forbes lists Oklahoma City as the 54th best place for business and careers in the U.S. and among the top 40 cities where the cost of doing business is low.
  • Major universities and colleges in metropolitan Oklahoma City include the University of Oklahoma, University of Central Oklahoma, and Oklahoma City Community College.
  • Nearly 86% of the residents in Oklahoma City are high school graduates or higher, and nearly 30% hold a bachelor’s or advanced degree, according to the U.S. Census Bureau.
  • Oklahoma City is the hub of the transportation system in the Midwest with Interstate 35, Interstate 40, and Interstate 44 bisecting the metro area.
  • Will Rogers World Airport provides direct non-stop service to nearly 30 major cities including Atlanta, Charlotte, Chicago, Houston, Los Angeles, Miami, New York, and Seattle. 
  • More than 4.3 million people passed through Will Rogers World Airport last year, setting a new passenger record for the second year in a row.

 

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Real Estate Market

A recent report by Fox 25 News in Oklahoma City notes that the housing market is “insulated” due to the diverse job industry in the metro area. The real estate market in Oklahoma City is performing well for buyers, sellers, and investors while the overall price of houses keeps steadily rising.

Key Market Stats:

  • Median home value in Oklahoma City is $134,100 according to Zillow (as of Sept. 2019).
  • Housing prices in Oklahoma City have increased 5.5% over the past year and are forecast to rise another 2.5% next year.
  • Median listing price of homes in Oklahoma City is $192,480 and the median selling price is $146,500, a good sign that there may be opportunity for the deal-seeking rental property investor.
  • The median per-square-foot list price in Oklahoma City is $111, lower than the $118 per square foot price found in the greater metro area.
  • Average days on market is 62.
  • 17.9% of the home listings in Oklahoma City have a price cut during the listing period.
  • 8.5% of the homes in Oklahoma City have a negative equity vs. 8.2% U.S. average.
  • 1.5% of the homes in Oklahoma City have a delinquent mortgage vs. 1.1% nationally.
  • Based on these key real estate market stats for Oklahoma City, rental property investors could have a good opportunity to buy into a stable and steadily growing market where selling prices are nearly 25% below listing price.

 

Strong Renters’ Market

The rental market in Oklahoma City and state remains strong as students and job seekers flock to the metro area. News 9 in Oklahoma City notes that Oklahoma is a very landlord-friendly state, helping to keep the rental market strong for real estate investors. 

Key Market Stats:

  • Median rent in Oklahoma City is $1,086 per month, while rents in the metropolitan area are nearly $1,173 per month.
  • Rents in Oklahoma City have grown by more than 36% in less than 10 years.
  • Last year the average rent in Oklahoma City increased by 4%, according to RENTCafé
  • Only 37% of the housing units in Oklahoma City are renter-occupied.
  • 85% of the housing units in Oklahoma City rent for less than $1,000 per month.
  • Most affordable neighborhoods for renters in Oklahoma City include Horseshoe Lake, Capital Hill, and Central Capitol Hill where monthly rents are $570 or less.
  • Neighborhoods in Oklahoma City with the highest monthly rents include Bricktown, Deep Deuce, and OK Health Center with rents averaging $1,356 per month.

 

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Historic Price Changes & Housing Affordability

Reviewing the historic price change of housing and the affordability index are two of the many tools rental property investors in Oklahoma City use to forecast future investment performance.

The Federal Housing Administration House Price Index report published every quarter is a great resource for tracking home price trends in Oklahoma City over both the short- and long-term. 

According to the report, since Q1 1991 home prices in the Oklahoma City metro area have increased by almost 166%. Over the past 5 years housing prices have grown by nearly 25% and have increased 0.17% from the previous quarter.

Rental property investors can find housing affordability rankings and short-term changes of home prices in Oklahoma City from Kiplinger, one of the leading publishers of business and personal finance information in the U.S.

  • Since the last real estate cycle market peak in May 2006, home prices in Oklahoma City have increased by 22.2%.
  • Since the last real estate cycle market bottom in March 2012, home prices in Oklahoma City have increased by 21%.
  • Oklahoma City has an affordability index of 1 out of 10, meaning the metro area is one of the most affordable places to own a home in the U.S.

 

Quality of Life

Oklahoma City is one of the best places for home buyers and investors. It’s also a perfect location for people looking for a great quality of life, according to News 4 TV in Oklahoma City.

Key Quality of Life Stats:

 

Get Out the Map

Where to begin your search? Roofstock created a heat map of Oklahoma City based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.

 


Ready to invest in the Oklahoma City market? If you haven't already done so, create your free Roofstock account and set up alerts. We'll notify you when we have an Oklahoma City investment property that matches your search criteria.

 

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Jeff Rohde

Author

Jeff Rohde

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles for firms such as RealtyMogul, Yardi Matrix, CrediFi, and Roofstock.

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