OMAHA, Neb. (Nebraska Examiner) — Omaha ranked No. 13 in a new nationwide look at most competitive rental markets, according to an analysis released Thursday of the first four months of the year by apartment search website RentCafe.com.
The researchers looked at the 100 largest U.S. markets and five metrics: average number of days that rentals were vacant; percentage of occupied apartments; pool of prospective renters; lease renewal rates; and new apartments completed compared to the 2021 supply.
They used Yardi Systems data from market-rate properties with 50 or more rental units. Fully affordable apartment complexes were excluded.
Job creation, high cost of for-sale homes
Ryan Spellman of Omaha’s Parkway Development says newly created jobs are attracting apartment dwellers to the central Omaha area where he has invested. He also believes high prices of single-family houses are contributing, overall, to longer stays in apartment buildings.
That said, he still was a bit surprised at Omaha’s strong showing among the mostly coastal and sunny markets that were identified in the report as most competitive.
“It’s definitely a testament to how strong it’s been here,” he said.
Spellman is a partner in the new Swivel apartments that opened earlier this year near 72nd and Dodge Streets. He said more than half the 158 units are now occupied, and he expects the rest to be filled by the year’s end.
Occupancy at the Swivel, he said, is on a trajectory similar to the 162-unit Centerline apartments farther south on 72nd Street that Spellman also helped develop. In the past year, Spellman said, occupancy at the Centerline was 98.8%.
He said that in the past, in projects he is involved with, tenants typically left apartments because of job transfers or because they were buying a house. Of the apartment dweller-turned-homebuyer segment, Spellman said: “We’re just not seeing that much lately.”
Spellman, who recently formed his own development company, said he’ll continue to partner on some projects with J Development. The two, for example, are preparing to launch a 250-unit apartment complex on a piece of the former CoCo Key site near 72nd and Grover Streets that’s now being redeveloped into a mixed-use campus.
Omaha v. nation
According to the RentCafe report, vacated apartments in the Omaha area filled within 29 days on average in early 2022, compared to 35 days for the national average. In Omaha, 17 renters competed for one apartment, compared to 14 for the nation.
Nearly 97% of Omaha market-rate rental units reflected in the study were occupied, compared to the 95.5% national average; and 63% of tenants opted to renew their lease, compared to nearly 62% for the nation.
The research also showed that, in Omaha, the number of newly opened apartments accounted for 0.9% of the supply, compared to 0.7 for the nation.
Overall, the report noted that high home prices and mortgage rates worked to keep would-be homebuyers in the rental market and contributed to high occupancy rates in apartment buildings across the nation.
Freddie Mac reported results Thursday of its Primary Mortgage Market survey, which showed the 30-year fixed rate mortgage average at 5.30% — which was down from last week but up from the average a year ago of 2.9%.
South and Central Florida are “red hot” when it comes to finding a rental, and mid-sized markets in the Northeast intensified, the authors of the report said. They said the Miami-Dade County area was the nation’s most competitive apartment market so far this year, with Orange County the most sought-after renting spot in California.
The researchers suspect the influx of newcomers seeking warm weather and looser restrictions during the pandemic, along with the wave of remote workers, turned up the attraction to those coastal rental markets.
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