Vibrant Economy in Oklahoma City Promotes Multifamily Expansion
- Apr 12, 2012
Posting a 5.5 percent unemployment rate, the lowest in the country, Oklahoma City is making tremendous strides in both single-family and multifamily housing. The metro area added more than 15,000 new jobs in 2011, amounting to a 2.7 increase in local employment. As a result, the year ranked as the second-highest for apartment absorption in the last 12 years.
Furthermore, the overall multifamily vacancy rate dropped to 6.8 percent, the lowest level in a decade—signaling that the Oklahoma City apartment market is faring better than it was even before the recession. Hendricks & Partners projects that the decline in vacancies will continue into 2013, with the vacancy rate that year expected to be 6.0 percent.
The area with the highest occupancy growth in 2011 was the central part of the city, with vacancies falling from 17 percent to 13.4 percent, while the area with the lowest occupancy growth was Midwest City/Del City, with vacancies there only falling from 9.6 to 9.2 percent.
The average price per unit rose for the first time in three years, from around $30,000 to over $35,000. Additionally, the average rent increased from $556 per month to $570 per month.
Hendricks & Partners reports that a great bulk of the expected job growth over the next few years will come from the oil and gas sector. Devon Energy, one of the country’s largest onshore oil and natural gas producers, will likely complete a $750 million headquarters in the metro area this year, while other companies like Continental Resources and Chesapeake Energy are expected to expand and add jobs.
Of course, with a favorable economic and jobs outlook comes migration and population growth, and Oklahoma City has had its fair share in the last few years. Net domestic migration jumped from 5,000 between 2007 and 2008 to 9,000 in 2009, and Hendricks & Partners reports that the metro is expected to add 200,000 new residents by 2020. In addition, RelocateAmerica recently ranked Oklahoma City as one of the top 10 places to live in the United States.
New multifamily construction has risen sharply since the onset of the recession and is expected to reach a six-year high in 2012. Over 800 units are expected to be completed this year alone, with 2,300 units in the works overall. Central Oklahoma City will see the largest volume of new development, with the northern submarket and suburbs of Edmond and Norman following closely behind.