Omaha, the largest city in Nebraska, is home to multiple nationally recognized research centers and hospitals, making it a great destination for healthcare.
Also, the cost of living in Omaha is lower than the national average, and it's so prosperous in terms of economy. Therefore, this city is budget-friendly for most families.
Many real estate investors and homebuyers choose Omaha, NE, as the best place to buy new properties. However, after a turbulent period with significant changes in all real estate markets across the US, people are still not sure if it's a good idea.
Luckily, here's all the information you need to know if you should consider Omaha for your next real estate purchase. Read on!
Omaha Housing Market Trends
Understanding how the local housing market behaved the previous year is key for determining if Omaha, NE, offers good investment opportunities for homebuyers.
According to Redfin's latest reports, the city's home prices have risen considerably since 2022. In addition, even though the median days on the market rose, most residential properties go under contract after a week of the listing date.
Find more information on each indicator below!
Omaha Median Home Prices
Redfin showed that home prices in the Omaha area jumped to $260,000 in April 2023, which accounts for a 3.6% rise from 2022 for all home types.
Plus, the latest median price is almost $30,000 higher than in January of this year, which means that the market has moved upward during the first quarter of 2023.
According to Redfin's data, the median price reported in April 2023 is the highest since August 2022.
Demand and Homes Sold
In April 2023, the number of homes sold fell by 34.0% year over year, with just 387 units listed and purchased compared to 586 last year.
However, although the figure is lower than in 2022, 55.3% of residential properties sold above the list price, while only 24.4% of units had price drops.
The sale-to-list price ratio was 102.3% after a 2.8% year-over-year drop, as reported by Redfin.
According to Movoto, the Omaha housing market has 2,077 homes for sale as of May 18. In addition, 256 new residential properties have been listed in this city.
Median Days on the Market
Redfin's latest reports also showed that Omaha homes spend just seven days on the market before selling. That's a 3-day rise compared to last year's figures.
Factors That May Affect the Omaha Housing Market
There's a reason why the real estate market experiences fluctuations: different factors influence housing demand, prices, and inventory. Here are the main ones.
A city's real estate market is always impacted by the economy, which defines people's willingness to buy a property or the type of homes they're looking for.
The economy in the Greater Omaha area has experienced steady growth in recent years. According to the Greater Omaha Chamber, over $52 billion worth of products and services are produced each year.
In addition, the Globalization and World Cities Research Network classified Omaha, NE, as a global city with a "sufficiency" status in 2020, which means it plays a key role in the world's economic network.
Real estate buying and selling trends, which often result from changes in demographics, also influence the market.
A city that welcomes a high number of migrants or is considered attractive by young people looking for starter homes will have higher housing demand, for example.
According to Redfin, 0.09% of national homebuyers expected to move from major cities to Omaha. Most come from Los Angeles.
Additionally, about 74% of people expected to stay within the Omaha metropolitan area, while 26% of homebuyers expected to move out of the city.
Mortgage Interest Rates
If mortgage interest rates are high, homes are less affordable, causing demand and prices to fall.
However, low mortgage interest rates make many more people interested in buying properties, resulting in increased demand and prices.
Nationwide, mortgage interest rates have risen sharply, topping 6% for most types of loans.
Finally, there are government policies. Tax credits, deductions, and subsidies have a major impact on housing demand and inventory.
Is the Omaha Housing Market Likely to Crash Soon?
Considering the negative economic events seen in recent months, many homebuyers wonder if the Omaha real estate market is likely to crash soon.
However, experts insist that it won't happen. Conversely, most believe that the housing market will only experience a slowdown.
Additionally, these signs show that a market crash isn't on the horizon:
- Demand for homes in Omaha and other major US cities continues to rise as migrants and workers looking for relocation search for a great place to live.
- Even though fewer homes were sold in April, the housing supply is still low. Overall, a market crashes when the housing demand is excessively high and fewer people are interested in buying a property.
- Home sales will also drop. In addition, there will be lower prices.
- Since getting approval to buy land to build a home is increasingly tedious, many people are unwilling to start the process. As a result, the inventory remains low.
- Today's lenders are stricter, so borrowers must meet rigorous requirements to get a loan.
- Foreclosure filings have fallen in Nebraska and other states, as people have more equity in their properties and are more confident in their financial situation.
Omaha Housing Market Statistics
Other statistics can help you determine if Omaha, NE, is a good place to buy a home. Here are the most important ones:
- The average price of a newly built home reached $500,000 in February of this year.
- The Omaha metropolitan area, which encompasses Council Bluffs, Iowa, is home to nearly a million residents.
- Prices for new single-family homes continue to rise as regulatory costs to build new units exceed the national average (21.5%, reported by the National Association of Home Builders), accounting for 32.8% of total construction costs, a study by the University of Nebraska showed.
- Redfin's Compete Score, which rates an area's competitiveness on a scale of 0 to 100 (the highest level), Omaha has a score of 91.
- Redfin says that the average housing unit in Omaha, NE, sells for around 1% above the list price, while hot homes are purchased for about 5% above the listed value.
- The average home goes pending in just one week after receiving multiple offers, while hot properties go under contract in just three days, Redfin showed.
- SoFi ranked Nebraska as the country's 24th state with the highest foreclosure rate, as there's one foreclosure filing in every 5,532 households.
- In this state, there are 840,802 properties but only 152 monthly foreclosure filings.
- Omaha, home to almost 500,000 people, is the largest city in Nebraska.
- The number of people living within a 50-mile radius of downtown Omaha, the metropolitan area's business and social core, was around 1.3 million in this year's first quarter.
- The median listing price for a home in Omaha was $155 (per square foot)
- The national average sale price is $370,000.
Predictions About the Omaha Housing Market
Do you still have doubts about whether Omaha is a good real estate market to invest in? Are you worried about how the potential recession will affect housing demand and prices? Here's what experts predict:
- Veros® Real Estate Solutions predicts that Omaha will be the country's third best-performing real estate market this year.
- According to the 2022 Q3 VeroFORECAST, Omaha will have a 6.4% appreciation from the third quarter of 2022 to this year's third quarter.
- Analysts believe mortgage interest rates will continue to rise, reaching 8.5% as the Fed grapples with inflation.
- Experts believe home prices will fall if demand remains low due to rising mortgage rates.
- However, Zillow says the housing market in the Omaha-Council Bluffs metro, which includes five counties in Nebraska and three in Iowa, will continue to grow this year and into 2024.
- According to Zillow's latest reports, the growth rate forecast for the Omaha-Council Bluffs housing market is 2.0%.
Omaha is a thriving city with a strong real estate market. While there are some negative trends, April 2023 figures show that it has remained competitive and has high growth potential.
Frequently Asked Questions
Is It a Good Idea to Buy a Property in Omaha, NE?
It depends on investors' and homebuyers' budgets and preferences, in addition to recent housing market trends.
Although Omaha is one of the strongest housing markets in the country, people should be cautious and consider multiple factors to determine if buying a property in the city is a good idea.
Is Omaha a Balanced Market?
No, it isn't. Since housing demand in the city is high, homebuyers can raise property prices. Therefore, Omaha is considered a seller's market.