Q3 2022 Multifamily Real Estate Report: Oklahoma City, OK
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Known as the Horse Show Capital of the World, Oklahoma City is one of the fasting-growing metropolitan areas in the US.
Oklahoma City’s metro area has held an average steady growth rate of 1.1% from 2010-2020, and the city’s population is still inclining into 2023.
Unemployment decreased from 3.5% in June 2022 to 3.3% by September 2022.
With a rising population and labor market growth of 4.4% from 2021 to 2022, Oklahoma City and its multifamily market have the fundamentals for promising investments.
General Area Overview & Demographics
Oklahoma City is the 20th most populous city in the United States, with a population of 687,725. The racial makeup of Oklahoma City is 51.1% White, 25.5% Black or African American, 6.1% Native American, 7.0% Asian, 0.2% Pacific Islander, 8.6% from other races, and 1.5% from two or more races.
The median household income in Oklahoma City was estimated to be $51,711 in 2018, which is just slightly below the national median of $57,652. Oklahoma City’s population is relatively young, with a median age of 34.7 years.
The University of Oklahoma’s main campus is in Norman, just outside the city. The University of Central Oklahoma is located in Oklahoma City, as are Langston University and Oklahoma Christian University.
The downtown district is home to numerous attractions, including the Oklahoma City National Memorial & Museum, which honors the victims of the 1995 bombing. Other must-see spots include the Myriad Botanical Gardens, Oklahoma City Zoo, and the Oklahoma City Museum of Art.
Oklahoma City has hot, humid summers and mild winters. Summer highs usually range from the mid-80s to mid-90s, while winter temperatures can drop into the 20s.
Summary of Oklahoma City Multifamily Real Estate Performance in Q3 2022
Vacancy has steadily inclined since Q4 2021, after reaching a historic low of 7% in Q3 of that year.
Year-over-year, vacancy increased to around 8.6% by Q3 2022.
Absorption was also negative for 2022, with the third quarter posting -210 units absorbed.
This follows a period of high growth and demand with some of the highest deliveries and absorption Oklahoma City has posted in recent years, so the drop for 2022 was expected and should be temporary.
What are multifamily rents like in Oklahoma City?
The overall multifamily asking rent was $1,087.50 per month. Quarter-over-quarter, rent only declined marginally by 0.1% despite Tulsa experiencing a larger decline in rent growth.
It appears the price has leveled after surging from 2020 to 2021 due to accelerated demand. Thus, Oklahoma still remains one of the most affordable states to lease commercial real estate.
Purchase & Leasing Activity
While sales volume was down, the average price per unit modestly increased.
Sales volume declined from around $225 million to $160 million, quarter-over-quarter.
Year-to-date volume for 2022 through Q3 totals $610 million, while Q4 2021 alone posted a volume of $460 million.
There was a year-over-over increase in the sales price per unit, from $75,000 per unit to $90,000 per unit.
Those figures sit well below the national average of approximately $270,000 per unit, making Oklahoma one of the most affordable states to purchase multifamily real estate.
Notable Multifamily Real Estate Deals in Oklahoma City in Q3 2022
There were several deals for multifamily real estate in Oklahoma City.
- Diamond Creek was acquired for $19.75 million at $77,000 per unit.
- Ashley Park Townhomes and Apartments was acquired for $19 million at $95,000 per unit.
- Highland Pointe was acquired at $41 million at $176,000 per unit.
These are a few among other transactions that took place.
New Multifamily Real Estate Development Activity in Oklahoma City in Q3 2022
After a high of 630 units delivered in Q2 2021, the number of new properties coming online in Oklahoma City’s multifamily market has steadily declined.
The third quarter of 2022 brought on only 370 units, while the same period in 2021 saw over 550 units delivered.
This also marks a quarter-over-quarter decrease with Q2 2022, providing 280 new units.
A total of 1,900 units across 13 properties, representing 2% of the market’s total inventory, were in the pipeline in Q3 2022.
About 630 of those units in the pipeline were anticipated to be delivered by the end of 2022.
Market Forecast for Oklahoma City’s Multifamily Real Estate Market
Following the surge in activity through 2021 and the subsequent dip through 2022, the market entering 2023 should return to signs of sustainable growth.
Population increase with a solid economy is the core fundamental of a robust multifamily market, and Oklahoma City has both of these in its favor.
The vacancy rate is expected to hold steady, rent should continue a modest climb, and by Q1 2023, there should be over 1,200 new deliveries.
Takeaways for Multifamily Real Estate Investors
Oklahoma City provides opportunities for investors looking for a multifamily market with a low barrier to entry.
With sale prices lower than the national average and a reliable performance forecasted, Oklahoma City holds promise.
Do your research, stay diligent, and happy investing.
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