$1,164 1Q 2024
1.7%
94.8% 1Q 2024
-120 BASIS POINTS
8.2% (FEB 2024)
3.5% (FEB 2024)
* Please note that these employment figures have been adjusted for seasonal variations and are based on Moody’s Analytics forecast as of January 1, 2024.
** Please note that these unemployment rates are estimates that have not been adjusted for seasonal variations, and they are derived from Moody’s Analytics forecast as of January 1, 2024.
QUARTERLY DEMAND
QUARTERLY COMPLETIONS
In Q1 2024, Omaha’s apartment market saw signs of healthy demand with a quarterly net absorption of 218 units, exceeding the number of units completed. Over the past year, Elkhorn, Papillion La Vista, and Downtown have been the main demand hotspots in Omaha region. More recently however, Northwest Omaha became increasingly popular, absorbing 94 units, closely followed by Papillion La Vista, which absorbed 78 units over the last quarter.
In Q1, Omaha’s apartment inventory increased by 149 units, showing a slowdown from last year’s peak deliveries. Construction activity was muted across most submarkets, with the exception of high-interest Downtown Omaha, which accounted for all new units added to the market.
Despite challenges related to nationwide supply, Omaha’s apartment market showed resilience with positive net absorption in the first quarter. Although the market experienced a 120-point year-over-year drop in the average market occupancy rate to 94.8%—a result of record deliveries in prior quarters—thirteen out of Omaha’s twenty submarkets still reported above-average occupancy rates. Washington County stood out with a notably high occupancy rate of 98.1%, and ten other submarkets also exceeded 95.0%. On the other hand, the Gretna submarket faced the lowest occupancy levels at 91.3%, struggling to absorb the 182 new units delivered last year.
Average Monthly Mortgage Payment
In the first quarter of 2024, Omaha’s average effective rents increased by 1.7% year-over-year, reaching $1,164 per month. Projections suggest that rental growth will intensify by year-end, with an expected annual increase of 3.7%, supported by stabilizing occupancy rates and a slowdown in new developments. Rent changes varied across submarkets, with Central Omaha and Washington County experiencing the highest increases at 4.7%. In contrast, Cass County saw a significant decline of 6.2%. Only three of the twenty submarkets recorded decreases in rent rates.
Average Monthly Rent
Preliminary data from Real Capital Analytics for the first quarter of 2024 shows that sales of conventional multifamily properties in Omaha, NE, amounted to approximately $12.2 million. This figure represents a significant 75.3% decrease from the same period last year, a downturn largely attributed to the impact of rising interest rates which have tempered investment activity. Continuing a trend that began in 2021, private buyers accounted for all of these transactions in the quarter. The average price per unit in the Omaha multifamily market was around $77,100 in Q1 2024, offering a substantial discount relative to the national average.
*Most Active Buyers and Sellers are based on the sale volume of apartment units.
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
Please note that the income and expense data presented in this section is sourced from third-party providers. Our firm does not provide any warranty or guarantee as to the accuracy or reliability of this information. We recommend that users exercise their own discretion and professional judgment when interpreting and utilizing this data.
| Income Assumptions | Value / Unit | Year Change (%) |
|---|---|---|
| Rental Income / Occupied Unit | $1,129.31 | 7.2% |
| Recoverable Expenses / Occupied Unit | $56.67 | 12.6% |
| Other Income / Occupied Unit | $94.68 | 4.3% |
| Total Income / Occupied Unit | $1,280.66 | 7.2% |
| Rental Income | $1,069.74 | 5.7% |
| Recoverable Expenses | $53.68 | 11.1% |
| Other Income | $89.69 | 2.9% |
| Total Income | $1,213.11 | 5.7% |
| Operating Expenses | Value / Unit | Year Change (%) |
|---|---|---|
| Payroll | $114.27 | 5.3% |
| Repairs & Maintenance | $37.94 | 15.2% |
| Leasing | $39.20 | -0.8% |
| General | $37.13 | 3.0% |
| Marketing & Advertising | $15.22 | 6.8% |
| Repairs & Maintenance | $133.83 | 11.7% |
| Cleaning | $23.66 | 0.2% |
| Roads & Grounds | $30.56 | 31.8% |
| General | $79.61 | 8.9% |
| Administrative | $36.46 | 12.4% |
| Security | $4.06 | 12.2% |
| General | $32.40 | 12.4% |
| Management Fees | $45.42 | 0.4% |
| Utilities | $55.16 | -0.9% |
| Electric | $14.07 | 2.5% |
| Gas | $6.40 | -29.7% |
| Water/Sewer | $34.70 | 6.2% |
| Real Estate & Other Taxes | $145.41 | 8.9% |
| Insurance | $43.92 | 22.9% |
| Other Operating Expensees | $0.44 | |
| Total Operating Expense | $590.13 | 8.2% |
| Value / Unit | Year Change (%) | |
| Net Operating Income | $622.98 | 3.5% |
|---|
Looking ahead to 2024, the Omaha-Council Bluff apartment market is expected to see even stronger rent performance in the warmer spring and summer months. This positive movement is expected to occur across various submarkets, mirroring the overall market trend. Furthermore, Omaha, NE continues to excel in occupancy, maintaining levels consistent with pre-pandemic times, outperforming many other U.S. Midwest markets. This is supported by robust population growth that exceeds both regional and national benchmarks.
With Omaha’s strong economic foundation, the local apartment market market will benefit greatly from over $8 billion in metro-wide developments currently taking place. Notably, the UNMC Project NExT—a significant public-private healthcare initiative backed by the federal government—will generate thousands of jobs over the next decade. Additionally, the new Omaha Streetcar line is set to spur further investment and business growth in the city center, likely keeping vacancies low in the future.
