$1,189 2Q 2024
2.7%
95.3% 2Q 2024
-20 BASIS POINTS
821 [YTD: 1,269]
812 [YTD: 961]
During the vital spring leasing season, Omaha’s multifamily market demonstrated healthy demand, as absorption edged the number of new units completed.
Despite facing supply side pressures over the last year, Omaha’s multifamily market has shown remarkable resilience, achieving an effective rent growth rate of 2.7% in the most recent quarter. This rate significantly outstrips the national average of 1.0%.
Supply side pressure will likely continue to recede quickly over the next 12 months given the sharp slowdown in annual construction starts amid the elevated interest rate environment and a pullback in construction lending.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
During the vital spring leasing season, Omaha’s multifamily market demonstrated healthy demand, as absorption edged the number of new units completed. Over the past year, Northwest Omaha, Elkhorn, and Papillion-La Vista have emerged as focal points of rental activity. Most notably, Bellevue has risen as a preferred location this past quarter, with renters taking up 126 units—ranking it behind only Papillion-La Vista and Elkhorn, which absorbed 172 and 150 units, respectively.
New construction is showing signs of slowing down, with Omaha’s inventory increasing by 812 units in the most recent quarter, a decrease from the 1,700 units delivered in the same period of 2023. Supply side pressure will likely continue to recede quickly over the next 12 months given the sharp slowdown in annual construction starts amid the elevated interest rate environment and a pullback in construction lending. This will likely set the stage for increasing occupancies and accelerating rent growth in 2025.
Omaha’s multifamily market continues to demonstrate strong demand-side resilience, bolstered by robust economic fundamentals and demographic trends. These structural drivers have led to an annual absorption of nearly 1,300 units through the first two quarters of 2024. While urban neighborhoods like Old Market, Blackstone District, and North Downtown remain particularly vibrant, the primary demand is driven by rapidly expanding suburbs such as Northwest Omaha, Elkhorn, Papillion La Vista, Gretna, and Millard. The metro area has weathered a record two-year wave of new supply, which is now beginning to ebb. This shift has slightly corrected the supply-demand imbalance observed in recent quarters, nudging the occupancy rate up by 20 basis points quarter-over-quarter. As a result, the average occupancy rate for the metro stood at 95.3% as of the second quarter of 2024.
Despite facing supply side pressures, Omaha’s multifamily market has shown remarkable resilience, achieving an effective rent growth rate of 2.7% in the most recent quarter. This rate significantly outstrips the national average of 1.0%. While Omaha is not among the top 50 largest multifamily markets in the U.S., its performance would rank it ninth highest for the second quarter of 2024. After reaching a peak annual increase of 7.2% in the first quarter of 2022, the current deceleration in rent growth—slightly over 4 percentage points on a year-over-year basis—stands as one of the ten lowest declines among all major U.S. markets. For comparison, the broader U.S. market has seen a slowdown of 9.2 percentage points, with 15 of the nation’s top 50 markets experiencing pullbacks of at least 15 percentage points.
Average Monthly Mortgage Payment
Average Monthly Rent
According to preliminary data from Real Capital Analytics, transaction activity in the Omaha metro area has seen a robust start in 2024, following a period of subdued activity last year. Sales of individual multifamily assets totaled $84.5 million through the first two quarters of 2024, representing a 53% increase over the same period in 2023. The year also marked a significant shift in market dynamics with the return of institutional capital to Omaha. After three years dominated by private investors, institutional capital accounted for 16% of the buyer composition in the first half of 2024, indicating a renewed interest from larger, more established investors in the market.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
|
Under 35 Years
|
35 to 44 Years
|
45 to 54 Years
|
55 to 64 Years
|
65 to 74 Years
|
75 to 84 Years
|
85 Years & over
|
|---|---|---|---|---|---|---|
|
-0.7%
|
0.2%
|
-1.1%
|
0.3%
|
1.2%
|
0.3%
|
0.0%
|
In the Omaha metro area, the 65-74 age group is the fastest-growing renter demographic, expanding by 1.2% from 2019 to 2022. This increase indicates a rising demand for rental housing that accommodates the needs of an aging population.
Omaha’s apartment market is a standout in the Midwest, achieving occupancy rates that match pre-pandemic levels and outperforming many other regional markets. This success is driven by robust population growth that surpasses both regional and national averages. Looking ahead, the Omaha-Council Bluffs market is well-positioned to continue outperforming national market fundamentals, signaling a strong and sustained period of growth for the region. The economic vitality of Omaha further enhances this outlook. Over $8 billion in metro-wide developments are in progress, including the transformative UNMC Project NExT—a significant public-private healthcare initiative poised to generate thousands of jobs over the next decade. Additionally, the forthcoming Omaha Streetcar line is expected to trigger further investment and business growth in the city center, sustaining low vacancy rates for the foreseeable future.
