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Hoping for a drop in Omaha property prices in 2025? Don’t count on it.
Despite economic shifts, Omaha's real estate market is poised for growth, driven by increasing demand and limited housing supply.
Let’s explore why property prices in this city are expected to rise in 2025.
We rely on solid, reliable data and statistics from multiple credible sources, ensuring our analysis is grounded in fact, not speculation.
By thoroughly examining this data, we draw our own conclusions, which we share at the end of this blog post. Enjoy the read!
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
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- Yes, investing in real estate is a solid option in 2025 in Omaha
1) Omaha boasts an impressive livability score of 83, highlighting its excellent quality of life
Signal strength: strong
The fact that Omaha has a livability score of 83 is a strong indicator that housing prices might rise in 2025.
This score reflects the city's excellent quality of life, which is attractive to potential residents. One key aspect is Omaha's vibrant arts and culture scene, offering numerous museums, theaters, and music venues that enhance the city's appeal. Additionally, Omaha boasts strong educational institutions, including reputable universities and schools, which draw families and students to the area.
Another factor contributing to the high livability score is the affordable cost of living compared to other major cities, making it an attractive option for those seeking value. These characteristics make Omaha a desirable place to live, which can drive demand for housing and potentially increase prices.
However, if the livability score were to drop below 75 due to changes in these factors, it might signal a different trend for housing prices.
Source: AreaVibes
2) In Omaha, there are only about 0.43 homes for each person, which is quite limited
Signal strength: strong
The fact that there is around 0.43 home per inhabitant in Omaha indicates a relatively low housing availability.
This low ratio suggests that the demand for housing is likely higher than the supply, which can lead to increased competition among buyers. In Omaha, a unique factor is the city's growing reputation as a tech and business hub, attracting more professionals and families seeking housing.
As more people move to the area for job opportunities, the pressure on the housing market intensifies, driving prices upward. This trend is further supported by the fact that new housing developments may not keep pace with the influx of new residents.
If the ratio were to increase to around 0.6 home per inhabitant, it might indicate a more balanced market, potentially stabilizing prices.
Source: USCensus
3) Redfin considers the Omaha real estate market to be "very competitive."
Signal strength: strong
The fact that Redfin ranks the Omaha real estate market as "very competitive" is a strong indicator that housing prices are likely to rise in 2025.
In Omaha, the most competitive properties are single-family homes in the West Omaha area, which are highly sought after. This area is popular because it offers excellent schools, family-friendly neighborhoods, and convenient access to amenities and employment opportunities.
When a market is labeled as "very competitive," it typically means that there are more buyers than available homes, driving up prices. This demand is further fueled by Omaha's growing economy and population, making it an attractive place for families and professionals.
If the market were to become "less competitive," with more homes available than buyers, it could signal a potential stabilization or decrease in prices.
Source: Redfin
4) Omaha home values have risen by 5.0% since last year, and this trend may persist
Signal strength: strong
The fact that home values in Omaha have already changed by 5.0% since last year is a strong indicator that the housing market is on an upward trend. This increase suggests that demand is likely outpacing supply, which often leads to rising prices.
Currently, the median home price in Omaha is around $276,386, and this figure is a key benchmark for potential investors. Additionally, the median sales price per square foot is around $153, which provides a useful metric for evaluating property value.
These statistics indicate that the market is healthy and growing, making it an attractive option for investment. If these trends continue, it is reasonable to expect that housing prices will continue to rise in 2025, offering potential returns for investors.
However, if the annual change in home values were to drop below 2%, it might signal a cooling market, which could alter investment strategies.
Source: Redfin
5) Three major websites confidently predict that home prices in Omaha will rise in 2025
Signal strength: strong
There are three major websites forecasting a positive growth for home prices in Omaha in 2025, which suggests an upward trend in the market.
Among these forecasts, Realtor is the most optimistic with a prediction of a 5.80% increase, followed by Redfin at 4%, and finally, Zillow with a more modest 0.70% growth expectation. This significant gap in forecasts indicates varying levels of confidence among experts.
While these predictions are encouraging, it's important to remember that forecasts should be taken with caution as they are based on assumptions and models that may not account for unforeseen changes. Therefore, we will also rely on strong, reliable, and current data to make a well-informed investment decision.
If these forecasts were to predict a negative growth or a decline in home prices, it would signal a potential downturn in the market.
Sources: ZillowForecasts, RedfinForecasts, RealtorForecasts
6) Omaha's of 6.0% shows a bustling and competitive market with most spaces filled
Signal strength: moderate
The vacancy rate in Omaha is currently at 6.0%, which is considered very low and indicates a highly occupied market. This low vacancy rate suggests that there is a strong demand for housing, as most properties are occupied, leaving fewer options available for potential renters or buyers.
In such a competitive market, housing prices are likely to increase because the limited supply of available homes drives up the value of existing properties. Investors should note that properties in excellent condition, particularly those located in the Dundee neighborhood, are easily rented due to their desirability and location.
These well-maintained homes in sought-after areas attract tenants quickly, further reducing the vacancy rate and contributing to the upward pressure on prices. As demand continues to outpace supply, the market becomes more competitive, making it a favorable environment for price appreciation.
If the vacancy rate were to rise significantly, say to above 10%, it would indicate a shift towards a less competitive market, potentially stabilizing or even decreasing housing prices.
Sources: NeighborhoodScout, DataUSA, USCensus
7) Omaha's median home price is significantly lower, at 36% less than the "national average."
Signal strength: minimal
The fact that Omaha still has a median home price 36% below the national average suggests that there is room for growth in the housing market. This gap indicates that Omaha's housing market is undervalued compared to other cities, making it an attractive option for potential investors.
In Omaha, the most expensive properties are likely to be luxury homes in areas like West Omaha, where amenities and larger lot sizes drive up prices. On the other hand, the cheapest properties are often small, older homes in neighborhoods like North Omaha, where prices are more accessible but may require renovation.
As demand increases, these lower-priced homes could see significant appreciation, especially if the area develops further. Investors should consider that the current price disparity is a signal of potential growth, as the market adjusts to align more closely with national trends.
If Omaha's median home price were to rise to match or exceed the national average, it might indicate that the market has reached its peak, and the opportunity for significant appreciation could diminish.
Source: Zillow
8) A local in Omaha could afford a house in about 3.9 years, which is reasonable
Signal strength: minimal
In Omaha, it currently takes around 3.9 years for a local to buy a house, which is considered reasonable.
This is based on the median household income of approximately $71,238 and the median home price of about $276,386. When the time it takes to buy a house is relatively short, it often indicates that homes are affordable for locals.
However, as more people find it easy to buy, the demand for homes tends to increase, which can lead to rising prices. Investors might see this as a sign that housing prices could go up in 2025 as demand continues to grow.
If the time to buy a house were to increase to over 5 years, it might suggest the opposite, indicating that homes are becoming less affordable and demand might decrease.
Source: USCensus
9) Omaha boasts a strong employment rate of 67.7%, indicating robust job availability
Signal strength: minimal
The employment rate in Omaha is at 67.7%, which is considered high compared to the national average in the United States. This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing as people are more likely to buy homes when they feel financially secure.
In Omaha, the three major employment sectors are healthcare, finance, and transportation. Companies like Union Pacific and Berkshire Hathaway employ a significant number of people in the area, contributing to the robust job market.
With a strong job market, more people are likely to move to Omaha for employment opportunities, further increasing the demand for housing. This demand can drive up housing prices as more people compete for available homes.
If the employment rate were to drop significantly, say below 60%, it might indicate economic instability, which could lead to a decrease in housing demand and potentially lower housing prices.
10) In Omaha, about 28% of homes sell for more than their listing price
Signal strength: minimal
In Omaha, around 28% of sales close at a price higher than the listing price, which is a strong indicator of demand. When buyers are willing to pay more than the asking price, it often means that competition among buyers is high.
This competition can drive prices up, as sellers realize they can get more for their properties. As a result, the market becomes more favorable for sellers, who might start listing their homes at higher prices.
Over time, this trend can lead to a general increase in housing prices. If this pattern continues, it suggests that housing prices in Omaha are likely to rise in the future.
However, if the percentage of sales closing above the listing price were to drop significantly, say below 10%, it might indicate a cooling market where prices could stabilize or even decrease.
Source: Zillow
11) In Omaha, home prices have consistently risen by an average of 7.1% each year over the past decade
Signal strength: minimal
The fact that home prices in Omaha have appreciated at an average rate of 7.1% over the last decade is a strong indicator of a healthy real estate market. This consistent growth suggests that there has been steady demand and increasing value in the area, which can be a positive sign for potential investors.
While a positive 10-year average home value appreciation indicates a history of demand and price growth, it is important to remember that past performance doesn’t guarantee future results. However, such a track record can still be a useful metric when considering future investments.
Investors often look at historical data to gauge potential future market conditions, and a decade of growth can suggest favorable conditions for future increases. If the average appreciation rate were to drop significantly, say below 2% over a similar period, it might signal a different trend.
Source: NeighborhoodScout
So, are housing prices in Omaha set to rise in 2025? Absolutely!
Omaha's housing market is poised for growth in 2025, driven by several compelling factors.
First, the city's impressive livability score of 83 highlights its excellent quality of life, making it an attractive destination for potential residents. This appeal is bolstered by Omaha's vibrant arts and culture scene and strong educational institutions, which draw families and students alike. Additionally, the affordable cost of living compared to other major cities enhances its desirability, potentially driving up housing demand and prices.
Second, the low housing availability of about 0.43 homes per person indicates a high demand relative to supply, further intensified by Omaha's growing reputation as a tech and business hub. This demand-supply imbalance is likely to push prices upward, especially as new housing developments struggle to keep pace with the influx of new residents.
Moreover, Redfin's classification of Omaha's real estate market as "very competitive" suggests a scenario where demand outstrips supply, leading to increased prices. The city's growing economy and population add to this competitive environment, making it an attractive place for families and professionals.
Additionally, the 5.0% rise in home values over the past year and the 7.1% average annual appreciation over the last decade indicate a healthy and growing market. With the median home price at around $276,386 and a median sales price per square foot of $153, the market remains attractive for investors.
Finally, forecasts from three major websites predict a positive growth trajectory for Omaha's home prices in 2025, with Realtor predicting a 5.80% increase, Redfin at 4%, and Zillow at 0.70%. While these forecasts should be approached with caution, they align with the strong, reliable data supporting an upward trend.
In summary, Omaha's combination of high livability, limited housing supply, competitive market conditions, and positive growth forecasts strongly suggest that housing prices are set to rise in 2025.