An Overview of the 2023 Oklahoma Housing Market

real estate investing tips real estate market Apr 17, 2023
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Over the past few years, Oklahoma real estate sales have been on the upswing. With properties at a surplus, prospective homeowners have been able to secure the properties they want at a price they can afford. 


While the pace of purchase will slow a bit in 2023, experts still predict that sales will be up. If you're considering buying an investment property in the Sooner State, it's important to know the current trends and where they're heading. 


Today, we're taking a closer look at the Oklahoma housing market and sharing everything you need to know.



Average Home Prices


When you make any type of real estate investment, it's important to take a long-term perspective. While the market may ebb and flow depending on a range of conditions, these expenditures have traditionally delivered a solid return on investment. Those curious about buying a second home or vacation home in Oklahoma should keep that trajectory in mind, especially amid reports that home prices are on the upswing. 


While news outlets are mixed on exactly how much real estate prices have gone up in Oklahoma, the majority agree that the general direction is trending upward. At the beginning of 2023, some reports shared that prices were up by less than 5% while others cited year-over-year jumps of more than 8%. 


This growth is felt more in bigger cities, such as Oklahoma City, where the average home price is expected to grow by around 2.6% this year. In Tulsa, the state's second-largest city, the increase hovers around 4.6%.


Right now, the median home price in Oklahoma is around $230,200. This is a conservative figure, especially considering that the national average home price is currently $428,700. This helps explain the ongoing buyer interest and why it remains a seller's market over most of the state. 


What's behind the increase? There are several different factors at work, and their combined force is driving prices upward, at least for the time being. Some of the biggest issues include:


  • Lower supply
  • Increased costs for builders
  • Rising mortgage interest rates (for the moment)



As we move more into 2023, these factors are poised to reach more of a balance as the economy continues to bounce back and the supply chain slowly re-opens. 



Breakdown by Property Type


In all, the increase we're seeing in the Oklahoma market is applied across the board, regardless of the specific type of residential or investment property analyzed. However, there are differences between how much a one-bedroom home is marked up versus a four-bedroom one. 


One industry report shared a breakdown of the median sold price in Oklahoma, categorized by bedroom count. Those figures are below:


  • One bedroom: $90,000 in February 2023 vs. $78,400 in February 2022 (14.8% increase) 
  • Two bedrooms: $149,900 in February 2023 vs. $135,000 in February 2022 (11.1% increase)
  • Three bedrooms: $234,600 in February 2023 vs. $211,000 in February 2022 (11.2% increase)
  • Four bedrooms: $338,800 in February 2023 vs. $297,500 in February 2022 (13.9% in increase)
  • Five+ bedrooms: $455,200 in February 2023 vs. $416,400 in February 2022 (9.3% increase)


This breakdown is provided via data shared by the MLS of Oklahoma, as well as the Houston REALTORS® Information Service, and Northwest Arkansas MLS LLC / Arkansas Regional MLS LLC. The numbers shared represents the period from 03/01/2021 to 03/01/2023.



Falling Mortgage Rates


Curious investors might look at the increase in average home prices in Oklahoma and wonder about the affordability of buying a property here. The good news is that while home prices might be slightly up, mortgage rates are gradually lowering. 


We might not feel that shift right at the beginning of 2023 when Oklahoma rates are still hovering around 7.4%. However, by the end of the year, experts predict that those rates will retreat slightly to just 7.1%.


While that decline might not seem astronomical, it could wind up being much lower. Recently, the Mortgage Bankers Association announced that by the final quarter of 2023, nationwide 30-year mortgage rates could drop as low as 5.2%. We can attribute some of this shift to the central bank's plans to scale back on its interest rate increases, which could go a long way toward helping to settle the market. 



Nationwide Rates Steadily Rising Post-Pandemic


If these higher sales figures are surprising to you, it's understandable. Since the initial COVID-19 outbreak more than three years ago, median home prices across the country have been rising steadily. As a whole, mortgage rates fell substantially in 2020, which led to a surge of eager homebuyers. 


At the same time, the pandemic (and the shift to remote work) encouraged more people to prioritize the idea of "home". This was evidenced by the higher number of millennials who used that time to make the leap into homeownership. In fact, according to one 2021 survey, 17% of millennials reported that they planned to buy a home in the next one to three years. 


Since that first spike in interest, home prices have continued to go up. Oklahoma's median price is considerably lower than the nationwide average, which explains why the state has enjoyed a period of peak sales over the past few years. 



Sales Figures


According to one report, Oklahoma real estate sales are expected to rise in 2023. In busy metropolitan areas, the increase will be more significant. However, almost all regions will experience some degree of growth.


Experts predict year-over-year sales increases of around 4.2% in Oklahoma City, while sales numbers in Tulsa are expected to grow at a rate of just under 2%. 


This symbolizes a slow nationwide shift that's been gradually taking place over the last several months. While there are still plenty of prospective homeowners looking to put down roots, demand isn't outpacing supply at quite the same rate it has been.


In November 2022, the Oklahoma City Metro Association of Realtors announced that sales figures for the month dropped by nearly one-third, equalling only 1,100 transactions. As a result, available inventory surged by 75%, totaling 3,000 listings. 


Looking ahead, Oklahoma buyers won't have to compete for as much to find properties within their price range. Still, that doesn't mean it's a buyer's market quite yet. 



Seller's Market


As of right now, the Oklahoma real estate market is still slightly in favor of sellers, but a sense of balance should soon return to the playing field. 


To understand how conditions are now versus how they should be, some analysts are looking back to before March 2020, asking what the state's housing market would be like if the pandemic had never occurred. Are we on the same trajectory now that we were back then?


While a concrete answer has yet to be determined, there is movement in the right direction. Let's take a look at some of the current trends.



Average Sale Time


If you're eyeing a property in Oklahoma, you should be able to find one that meets your specifications, but you may have to act quickly. While the average sale time was up 82.5% in February 2023 (38 days vs. 21 days in February 2022), it's still fast-paced. 


Across the states, available properties aren't lasting as long as they once did. According to one report, 342 homes were sold in under 30 days in February 2023, while 145 homes were sold in 30 to 90 days. Only 74 homes spent more than 90 days on th market. 



Property Availability


One of the factors leading the market in favor of sellers, at least for the time being, is the slightly lower supply that prospective buyers have to choose from. Take the availability rates in Oklahoma City, for instance. 


While it isn't a major decline, there were only 2,009 homes for sale in the city in February 2023. That's a 7.2% decline from February 2022, when there were 2,166 homes for sale. This shift becomes even more apparent when you break down the properties by bedroom count, as shown below:


  • One bedroom: 20 homes available in February 2023 vs. 23 homes available in January 2023 (13% decrease) 
  • Two bedrooms: 207 homes available in February 2023 vs. 211 homes available in January 2023 (1.9% decrease)
  • Three bedrooms: 1,091 homes available in February 2023 vs. 1,173 homes available in January 2023 (7% decrease)
  • Four bedrooms: 586 homes available in February 2023 vs. 644 homes available in January 2023 (9% decrease)
  • Five+ bedrooms: 105 homes available in February 2023 vs. 115 homes available in January 2023 (8.7% decrease)



While properties might be a little more scarce now than they were at this same time last year, that hasn't impacted buyers' ability to secure the homes they want. In fact, those numbers are currently trending upward. 


In all, there were 561 homes sold across Oklahoma in February 2023, compared to 470 homes sold in January 2023. This represents a 19.4% increase. 



Average Home Values


The combined effects of demand and inflation are inching Oklahoma home values upward. To understand the significance of this change, it helps to go back in history a little. 


Each year, the state accessor's office sets market values for 330,000 parcels of state property. In 1980, the total real estate value of homes in Oklahoma was a collective $4.8 billion. While that number might seem substantial, it's only a drop in the bucket compared to where average home values are today.


In 2022, the total real estate value in the state reached $48.6 billion, representing an increase of 18.3% from the year before. In 2023, that trend appears to be holding strong, especially as demand for real estate in Oklahoma continues to grow. 



Asking Price vs. Sold Price


If there's any sign that the market might soon be balancing out, it's the fact that sold prices are lower in Oklahoma than they have been in recent years. In February 2023, 271 of the total homes sold went for below the listed asking price. 


At the same time, 190 homes were sold right at the asking price, while 100 were sold above the asking price. Overall, that means that 48.5% of real estate transactions that month were lower than first intended. 


This is good news for investment buyers, as it means you could secure a great deal on a home that checks all your boxes. The key is to work with a trusted local real estate agent who can help you find the right property and negotiate the right terms!



Buying vs. Renting in Oklahoma


Across the country, rental rates increased during the pandemic as financial pressures made purchasing real estate inaccessible for many. In response, landlords were able to raise their rates to new heights due to the uptick in demand. 


While that trend held steady for more than two years, it appears the nation is slowly moving in a new direction and rent rates are becoming more affordable than ever. In November 2022, average U.S. rent prices saw the biggest one-month drop in at least seven years. 


Specifically, asking rents were lowered by 0.4% from October to November, which represented the largest monthly decline in recent history. Rates have not declined by more than 0.1% during that time of year since long before the pandemic. 


If you're thinking about renting in Oklahoma, this could be a practical time to do so. The average rent price in the state is under $1,000, coming in at just $962, and the average apartment size is a comfortable 851 square feet. Of course, these numbers can vary significantly depending on the specific location and the features and amenities provided by the rental facility. 


In Edmond, for instance, the average rent is $1,132. In Oklahoma City, it's $962. In smaller cities like Claremore, the average is just $798.


First-time buyers may flock to these locations where the cost of living is more affordable, especially given that nationwide rent prices increased by 6.3% in February 2023 and are expected to hit 8.4% by May 2023. 



Learn More About the Oklahoma Housing Market


As you can see, there are many different moving parts that make up the Oklahoma housing market! None of these parts stays stagnant for very long, and trends are always shifting. 


If you want to learn more about reading and understanding these real estate market metrics, maybe it is time to register for our Real Estate Investing Course for Beginners. 


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