Oklahoma City Housing Market: Trends and Forecast 2024-2025

Oklahoma City Housing Market Trends

Home Sales: A Closer Look

September 2024 showed a mixed bag for home sales in Oklahoma City. According to MLSOK, Inc., the number of closed sales for all properties dropped by 10.4% compared to the previous year. This is a significant decrease, and it's something we need to discuss. However, nationally, the picture isn't drastically different.

The National Association of REALTORS® (NAR) reported a similar slowdown, with existing home sales dipping 2.5% month-over-month and 4.2% year-over-year.

This decline doesn't necessarily signal a market crash. In my experience, these fluctuations are normal. What we're seeing could simply be a market correction after a period of rapid growth. Several factors, including interest rates and economic uncertainty, can influence these numbers.

Here’s a breakdown of the September 2024 sales data from MLSOK, Inc., highlighting the differences between single-family homes and townhouses/condos:

Property Type	Closed Sales (September 2024)	Change from September 2023
Single-Family Homes	1,738	-10.0%
Townhouse/Condos	47	-23.0%

As you can see, the decline was sharper in the townhouse/condo market. This could be due to several things, including a change in buyer preferences or a greater sensitivity to interest rate increases.

Home Prices: Reaching New Heights (or Not?)

While sales numbers dipped, the median sales price for single-family homes in Oklahoma City actually increased by 6.3% in September 2024 to $255,000. This is interesting because it shows price growth even with fewer sales. This could be due to limited inventory, which we will discuss later.

However, the townhouse/condo market experienced a different story. Their median sales price fell by 27.1% to $146,000. This drastic drop warrants further investigation; it likely reflects market-specific factors rather than a city-wide trend.

Here's a table comparing the year-to-date median sales prices:

Property Type	Median Sales Price (YTD Sep 2024)	Change from YTD Sep 2023
Single-Family Homes	$259,000	+2.8%
Townhouse/Condos	$153,450	-9.7%

The national median sales price, according to NAR, reached $416,700, significantly higher than Oklahoma City's figures. This emphasizes that local market dynamics significantly impact pricing.

Housing Supply: Inventory on the Rise

One of the most striking aspects of the Oklahoma City housing market in September 2024 was the significant increase in inventory. The number of homes for sale increased by 52.9% for all properties compared to last year. This rise is particularly pronounced in single-family homes, with a 51.4% increase. Townhouse/condo inventory exploded with a 129.2% increase.

This increase in inventory means buyers have more choices. This shift, in my opinion, is likely to put some downward pressure on prices, especially if the sales pace remains slow.

Months' Supply of Inventory: The months' supply of inventory also increased significantly – 46.2% for single-family homes and 116.7% for townhouses/condos. This means it would take longer to sell all the available homes at the current sales pace. This is a crucial indicator for buyers and sellers.

Here's a summary table:

Property Type	Inventory Change (Sep 2024 vs Sep 2023)	Months' Supply of Inventory (Sep 2024)
Single-Family Homes	+51.4%	3.8
Townhouse/Condos	+129.2%	3.9

Market Trends: A Look Ahead

The Oklahoma City housing market is clearly in a transitional phase. The slowdown in sales, coupled with a significant rise in inventory, suggests a shift from a seller's market towards a more balanced or potentially buyer-leaning market.

• Interest Rates: Mortgage interest rates play a huge role. Lower rates can stimulate buyer demand, while higher rates can cool the market. Keeping an eye on the Federal Reserve's actions will be vital to forecasting the market.
• Economic Conditions: The overall economic climate significantly influences the housing market. Job growth, inflation, and consumer confidence all play a part.
• New Construction: The level of new home construction in and around Oklahoma City will affect the balance between supply and demand.
• Buyer Preferences: Shifts in buyer preferences – for example, increased demand for specific types of properties or locations – can have a localized impact on pricing and sales.

Based on these trends and my own observations, I predict that the Oklahoma City housing market will likely remain relatively stable in the short term, potentially seeing a slight decrease in home prices as inventory remains high. However, long-term, I anticipate continued growth, particularly in areas with strong employment opportunities and desirable amenities. The current inventory surge should, ideally, lead to a healthier, more balanced market.

Oklahoma City Housing Market Forecast 2024-2025

Let's dive into a detailed forecast, examining recent trends and projecting what lies ahead. As of September 2024, the average home value in Oklahoma City sits at $200,587, according to Zillow. That's a 1.9% increase over the past year.

Homes are spending an average of about 17 days on the market before going pending – a pretty strong indication of a competitive market, even if the year-over-year growth has slowed a bit. These numbers paint a picture of a relatively healthy market, but understanding the nuances is key.

I've been tracking the Oklahoma City market for several years, and my experience suggests this is a nuanced picture. While the average home value is up, it's critical to also note the changes in interest rates and their effects on affordability.

My analysis of the market shows that the actual rate of appreciation has begun to decelerate and is expected to continue to slow down in the coming months and into next year. Several factors are contributing to this trend, and I will unpack them in the following sections.

MSA Forecast: Peeking into the Future

Let's take a look at the Metropolitan Statistical Area (MSA) forecast for Oklahoma City:

RegionName	RegionType	StateName	BaseDate	31-10-2024	31-12-2024	30-09-2025
Oklahoma City, OK	msa	OK	30-09-2024	0.1%	-0.2%	0.6%

This data suggests a relatively flat market in the near term (October 2024 and December 2024), possibly a slight dip at the end of the year before a moderate increase by the end of September 2025. Remember that these percentages represent predicted changes in the average home value, not absolute values. This projection is solely based on the data provided and it is important to note that this is a projection, not a certainty.

Keep in mind, however, that market forecasts can be unreliable. Unforeseen events—economic shifts, changes in interest rates, even local regulations—can significantly impact the trajectory of the market. Therefore, treat any forecast as a possibility, not a guarantee.

Will Home Prices Drop in OKC? Will There Be a Crash?

This is the million-dollar question, and honestly, there's no crystal ball. While the forecast suggests a small dip at the end of 2024, a major crash seems unlikely in my expert opinion based on various market indicators that suggest current demand will continue to support the market.

Oklahoma City's economy is relatively diverse, which adds to the resilience of its housing market. However, keep in mind, I am providing my expert opinion which is not an absolute prediction of market movements. I always advise people to consult local real estate experts and perform their own research.

Interest rates are currently impacting the market significantly, so it is vital to consider your options carefully. High interest rates reduce affordability, which can lead to slower price growth or a short-term correction; however, the sustained job market and general economic stability make it difficult to see a significant downturn.

A Possible Forecast for 2026 and Beyond

Predicting beyond 2025 is increasingly speculative, but based on current trends and my understanding of the Oklahoma City market, I anticipate moderate, steady growth in 2026. Several factors will play into this. Continued job growth in the city will increase demand, while any significant economic downturn or interest rate changes will be major factors.

Factors Influencing the Oklahoma City Housing Market

Several key elements shape the Oklahoma City housing market:

• Economic Growth: A strong local economy generally translates to increased demand for housing. Oklahoma City's diverse economy, including energy, healthcare, and aerospace, offers some stability.
• Interest Rates: Mortgage rates have a huge impact on affordability. Higher rates tend to cool down the market, while lower rates fuel demand. The Federal Reserve's actions on interest rates will heavily influence the direction of the market.
• Inventory Levels: The number of available homes on the market is a critical factor. A low inventory generally drives prices up, while a high inventory can lead to price reductions.
• Population Growth: As the population of Oklahoma City increases, the demand for housing is expected to increase as well. This is another factor that will support the market.

In summary, while significant price drops seem unlikely in the short term, the market’s trajectory will be influenced by interest rate changes, economic factors, and overall inventory. It is essential to be informed before making any decisions. Remember, this is a forecast, not a guarantee. Consulting with a local real estate professional is crucial for personalized advice tailored to your specific needs and circumstances.

Should You Invest in the Oklahoma City Real Estate Market?

The Oklahoma City housing market presents a compelling opportunity for investors seeking stable, long-term returns. Here's a breakdown of the key advantages:

Affordability: A Double-Edged Sword

• Lower entry point: Oklahoma City's attractive home prices signify a smaller down payment compared to the national average. This translates to easier access to the investment market, particularly for first-time investors with limited capital.
• Boosting rental yields: The affordability factor doesn't stop there. Lower acquisition costs allow the rent you collect to represent a larger portion of the property's value. This has the potential to generate a stronger cash flow from rental income, bolstering your return on investment.

Stability Over Speculation

• Mitigating risk: Unlike markets prone to dramatic boom-and-bust cycles, Oklahoma City's consistent, yet unexplosive, growth suggests a lower risk of a sudden price decline. This translates to a potentially more stable investment, offering peace of mind for long-term wealth creation.
• Appreciation potential: The steady rise in housing prices indicates a good chance of the property value increasing over the years. This means you could potentially sell the property for a profit in the future, further maximizing your returns.

A Balanced Real Estate Market: A Strategic Investor's Playground

• Unearthing hidden gems: The rise in available properties fosters a less competitive environment. This allows you to shed the pressure of bidding wars and focus on in-depth property research. You can strategically identify undervalued opportunities with strong rental potential, potentially leading to higher returns.
• Calculated offers, not bidding frenzy: A balanced market means less competition from other investors aggressively driving prices above asking value. This allows you to make calculated offers based on the property's true market value, ensuring you don't overpay and potentially sacrificing your profit margins.

Beyond the Surface: Further Considerations

• Neighborhood Nuances: While Oklahoma City offers affordability overall, some neighborhoods might be more lucrative for investors than others. Dig deeper to identify areas with high rental demand, good schools, and potential for future development. These factors can significantly impact the success of your investment.
• Ongoing Costs: Remember to consider property taxes, insurance, maintenance, and property management fees when calculating your potential returns. These ongoing expenses can affect your overall profitability, so factor them in before making a final decision.

Investing 101: Due Diligence is Key

Remember, every investment carries some inherent risk. Before diving into the Oklahoma City market, conduct thorough research on specific neighborhoods. Understand rental rates in those areas to estimate potential income from the property. Factor in ongoing costs like property taxes and maintenance to ensure your investment remains profitable in the long run.

The Oklahoma City housing market might not be a gold rush, but for the shrewd investor seeking a reliable and affordable market with room for growth, it could be the perfect place to put your money to work. With its consistent price increases, a growing number of available properties, and a balanced market dynamic, Oklahoma City offers a solid foundation for building a successful real estate portfolio.