Buyers, Renters Devour Omaha Housing in ‘Feeding Frenzy’ 9/23/16 09/23/16 8:28:42 AM
Printer Friendly Version
Matt Brown’s efforts to sell the house he was renting out were sometimes frustrating, but he ended up finding a buyer and a satisfied customer.
Buyers, Renters Devour
Omaha Housing in ‘Feeding Frenzy’
By Julien R. Fielding
The Daily Record
Omaha frequently makes national “Best” lists: Best Place to Raise a Family, Best Place for Entrepreneurs, and even Top Military-Friendly Cities. Just last year, Time magazine included it on its Best Places to Live list, citing its economy, affordable homes, relatively short commute time, and “burgeoning food scene” as a few of its perks. The word seems to be out, because housing isn’t always easy to come by in this former “cow town.”
As Sean Petersen of NP Dodge explained: “Almost all homes [if priced right] in this market are flying off the shelves, no matter where they are located. With no question, the hottest area in town is midtown [Dundee, Aksarben, Benson, Blackstone, Midtown Crossing, UNO and UNMC areas]. It seems that many tend to gravitate toward these areas, considering this is where all the money is being put in for redevelopment and new communities.”
From left, Sean Petersen, Dawn Vrtiska, and Justin Pogge are agents on the Pogge Real Estate Team at NP Dodge.F
Everyone is different when it comes to what they want in a purchase though. While some may need to be in a specific school district, others may be looking for a home that is close to work for an easy commute.
Once someone hones in on a specific area of town, then it comes down to price point, number of beds/baths, and the layout of the home. In most circumstances, consumers focus on the master bedroom, kitchen, and main bathroom areas since those are the rooms in which they spend most of their time, he said.
Why is the housing market in Omaha doing so well? Petersen said it’s due to a few factors, but mostly because interest rates are at an all-time low, and new government-backed loans mean that little to no money needs to be put down.
“You can’t beat these interest rates,” he said. “Many people who thought they would never be able to afford a home are now able to buy. With low rates and little money down, this makes it exceptionally appealing to first-time homebuyers, who eat up most homes under $200,000. These homes tend to be gone more quickly than others since the majority [of buyers] are looking for homes under this price point.”
Even in a “seller’s market,” things can prove a bit challenging for sellers. Consider the case of Matt Brown, an actor who relocated to South Carolina, and who had been renting out his home at 6310 Pierce St. for about a year. It wasn’t a bad experience [being a landlord] he said, but since he lived on the other side of the country, he didn’t know if he wanted to keep doing this long-term.
“I was looking at the current market, and the state of our country, not really knowing where things might be heading,” Brown said. “I really didn’t think I’d be keeping the house for the next 20 years, so I thought I might as well see what I could get for it. If the offer I ended up getting didn’t justify the sale for me, I thought I would rent it for a bit more.
“It’s a great area to have a rental, which is why I figured it would sell much faster, even with the price tag. I’ve heard so many stories of people listing their house and selling it that day.”
With the help of a local relative, he listed it nearly two months ago, and had good response – during the first 25 days, he had 11 showings, with two second showings – but selling it took a lot longer than he had anticipated, and he had to drop the price a few times.
‘The house you saw today that you were going to think about tonight will be sold tomorrow to the people who saw it yesterday.’
“I think I should’ve listed it earlier in the year, although I wasn’t able to,” Brown said. “I knew that it’s in a pretty desirable location; however, I knew the previous owner overpaid for the house, as did I, so I’m playing catch up. The feedback I received had been mostly positive, although consistent in that it was a little overpriced.” The size of the driveway – it’s only single-car wide, although deep enough for three cars – was also a concern.
Brown almost pulled it off the market, and had even found renters, when a cash buyer finally emerged. “I’m guessing they’re buying it to rent out as well. Or move in and rent their house,” he said.
Petersen said that, in his experience, it’s unusual for a house to stay on the market for longer than a few days. “If it’s sitting for longer than a week, there is usually either something wrong with it or it is overpriced. It also depends on where the house sits and its price point.”
One of Petersen’s clients found out just how “hot” the market in Elkhorn can be. The couple listed their Chapel Hill home on a Thursday and by Saturday, had a buyer. Now their challenge will be to find a house to buy.
“While houses in midtown are flying off the shelves no matter what the price, houses in the $300,000s and over, out west, tend to sit longer as people have more options,” Petersen said.
“You have the option to be a little more picky when there is more choice, but in the hotter areas, there is literally no time to think. The house you saw today that you were going to think about tonight will be sold tomorrow to the people who saw it yesterday.
“It’s tough out there for buyers, while sellers are sending out multiple offer addendums and getting the benefits of this seller’s market. It truly is a feeding frenzy out there.”
Lynn Ramert found out recently how difficult house hunting can be when the educator moved back to Omaha. “I’d been looking at online sites like Zillow for probably six months – since we started seriously thinking about moving back to Omaha. We looked actively here in Omaha, with a realtor, for only about three or four weeks. We wanted to get something ASAP.
“But honestly, it felt like a full-time job, combing through the results the realtor’s service sent daily [getting emails all day, as houses went on the market]. I’ve been told there’s actually less inventory than in past years, and that’s part of what is causing the competition. But for us, the number of results we were getting was because we didn’t want to narrow down by area too much. What we wanted was a unique house with a large yard, although we looked everywhere from the ‘hip’ areas of Benson, Elmwood Park, Dundee, Field Club [not many big yards], to cookie-cutter, still-being-built-in Celebrity Homes neighborhoods [not unique].
“And I had to look at the results as soon as I got them, because the houses were going fast – as in, yes, same day fast. One even sold as I was walking through it – someone who had seen it earlier in the day got in an offer and the sellers accepted it. And a lot were ‘pending’ what seemed like immediately after they went up,” Ramert recalled.
“It was really hard because my husband basically works 7 a.m. to 7 p.m., and I obviously couldn’t really make a decision like what house to buy without him having seen it. It would have been even harder if I were working too. There’s no chance you could get the ‘best’ [cute, updated, with good pictures] houses if you had to wait to look on the weekend, and it was posted on a Tuesday, for example.”
For Ramert, house hunting was very stressful and definitely different from the last two home-buying situations she had in Bloomington, Ind., before the housing bubble burst in 2008, and just recently in West Palm Beach, Fla.
“In both of those situations, we had time to mull things over, and we bought for less than the listing price. We’ve been told that, here, things go for over, although the contract we just signed was for $2,000 under listing price. It feels a little like we’re paying more than what the house is worth, since we’re used to getting ‘more house for the money’ elsewhere, but we’ve had to adjust our expectations, since ‘the market dictates price.’”
Along with that, she said, none of the houses in her price range are truly turnkey.
“Lots of places had really outdated kitchens and bathrooms or stinky carpets, in need of new furnaces, etc., so you know you’d have some pretty hefty costs right away after the purchase price.” Luckily, Ramert found her current home online, went to an open house the next day, and at that time, made an offer.
Houses aren’t the only “hot” options in the Omaha area. Condos, too, are doing exceptionally well, Petersen said, as are apartments and rental homes.
“People who can’t seem to find the home they want, or who simply don’t want to deal with the upkeep of a yard or exterior, tend to go the condo route. Some first-time home buyers who are finding it too difficult to compete with other house hunters, and who don’t want to get into a bidding war, will rent until the market slows a bit.”
As the Lund Company’s CAPS | Senior Vice President of Property Management Tanya Shapiro explained, “since the burst of the housing bubble at the end of 2007, nationally and locally, housing preference has shifted toward renting. The shifting housing demand has contributed to the popularity of apartment renting, and urbanization trends and an aging population underlie the strength in rental housing. The Omaha market has responded by increasing upscale rental opportunities in urban neighborhoods.”
Who seems to be leading this trend? That depends, Shapiro said.
“Millennials tend to stay single and child-free longer, and they are primarily renters. According to Costar, new residential occupants in downtown Omaha are mostly young [25-44] and have incomes at or above the Omaha median income [~$57,000]. Older generations have been contributing greatly to the increase in rental households due to the overall large size of this age group. Baby Boomers are seeking maintenance-free living in locations with numerous entertainment and cultural options.”
The more popular areas for renting, she said, are in downtown Omaha, which has seen a continuous rise in new housing units; midtown has been mostly flat. “That being said, although there has been far less new development in midtown, there are many redevelopment projects recently completed or currently underway that involve rehabbing and/or repurposing older buildings into upscale rental communities,” she added.
Renters are keen on amenities, and they expect to find them, she said.
“Developers today seem to be focusing more on the common areas of apartment buildings, investing more money in clubhouses, larger social and outdoor gathering spaces, rooftop decks and heated swimming pools. As these common-area spaces become larger, the units in apartment buildings get smaller.
“Some recent new developments the Lund Company has been involved with have included fire pits, pet wash stations, outdoor fitness center, Wi-Fi and an indoor golf simulator. We have also seen trends toward healthy living amenities such as water purifiers, bike storage, and salt water pools as well as eco-friendly solutions such as onsite recycling program, green spaces and non-smoking communities.”
The local apartment market has performed well because of shifting housing demands, Shapiro explained. “Despite record deliveries in 2016, the apartment vacancy rate is expected to drop below 4 percent. Downtown is dominated by rental housing, with almost all new product added since 2010 being apartments. This area is the center of gravity for rental units in the Omaha region.
“I believe the key residential demand drivers for the downtown and midtown areas include the desire to live closer to downtown and midtown employers, the growth of UNMC as a major health care center, and Creighton University students [and the parents who purchase their housing].”
Petersen agreed. “The trend of moving out west – which was apparent five to 10 years ago – has slowed; the shift is now to midtown, ‘where all of the action is,’” he said.
“You can’t get the mid-century style home out west like you can in midtown – Memorial Park, Dundee, Field Club – area,” Petersen added. “Many people are wanting this look in a home, and it’s just not at all that common out west. Many buyers are instead opting out of going past a certain westward street and keeping in the middle, where all their friends are.”
For more information about NP Dodge or to find a realtor, go to: www.npdodge.com. The Lund Company’s website is: www.lundco.com.