Oklahoma City Real Estate | Busting the Midwest Real Estate Bubble

Oklahoma City is located near the center of the state of Oklahoma and serves as the stateÕs capital and the seat of Oklahoma County. The city covers 621 square miles, making it one of the largest cities in land area in the United States, according to the official Oklahoma City website. The city has a population of 558,000 people.

Energy forms an important piece of the economy, both of the city and of Oklahoma state, with oil reserves first discovered in the area in 1928. ÒOklahoma remains an energy state and the heavy concentration of oil and gas activity in the metro area will provide a boost to area job and income growth as long as energy prices remain high enough to encourage local firms to expand their operations,Ó according to the 2008 Oklahoma Economic Outlook report by Mark C. Snead of Oklahoma State UniversityÕs William S. Spears School of Business. Because of this, the rising oil costs that are bringing other regions to their knees may actually be helping counties in the state of Oklahoma.

ÒThe Oklahoma City region is outperforming the state for much the same reason that the state is outperforming the nationÑenergy,Ó according to Snead. ÒThe greatest income gains in the metro area have occurred in Oklahoma County and have propelled the county among the ranks of the top ten nationally in terms of income growth in recent data releases.Ó

The city boasts a low median housing cost of $134,900, according to Zillow.com, and 87 percent of Oklahoma City homes are occupied, leaving the area with a 13 percent vacancy rate. Of occupied homes, 38 percent are rental units with the remainder being owner-occupied. A property owner in Oklahoma City should expect to pay approximately $1,104 per month for property-related expenses and mortgage payments, while owners without a mortgage will pay approximately $373 on average, according to 2006 U.S. Census data. Median gross rent was $570 per month as of 2005, according to census data.

Oklahoma CityÕs overall economy may bode well for investors. Although job growth in the area was down in 2007 from previous years, it still exceeded the national average growth rate for the year. The Oklahoma City Metropolitan Statistical Area (MSA) experienced a job growth rate of 1.7 percent for 2007, a drop from a rate of 2.2 percent in 2005. The United States averaged a growth rate of 1.3 percent for 2007. Oklahoma City is expected to add 6,800 jobs in 2008 and 9,400 jobs in 2009, according to Snead.

And, despite the difficulties befalling housing markets around the world, Ò[t]he Oklahoma City construction market has hardly noticed the national building slowdown and should remain strong through 2009. While some housing-related hiring weakness is expected in the financial services sectors, the metro area will primarily be impacted by the national housing slowdown in an indirect manner through marginally slower U.S. economic growth,Ó according to Snead. He also wrote that homeowners can expect home values in the Oklahoma City MSA to increase by 2 to 4 percent through 2009.

So there you have it, Oklahoma City remains a diamond in the rough. It is a perfect time to consider this pristine Midwest city is the place to invest your next real estate dollars.