Nebraska Real Estate Boom Expected to Slow for Sellers


Eddie Vertis visits an open house in Lincoln on Sunday, Sept. 26, 2021. (Drew Dahlson/NNS)
By 
Drew Dahlson
Nebraska News Service

Experts say the real estate market is on fire, but a cool down may soon be inevitable.

The Mortgage Forbearance Program, created as a part of the CARES act signed on March 27, 2020, offers homeowners to pause or reduce their mortgage payments while they attempt to recover and build back their finances. Applications for the loan lapsed last Thursday. For Nebraskans, it may be a factor in the shift of the market.

“And we’ve already seen a little of that even now,” said Greg McCown, a real estate agent with Home Real Estate in Lincoln. “The pendings came down slightly, like 7% or 8% and the listings bumped up.”

Nebraskans who struggle to pay back the loan from the federal program are at risk of missing their loan payments. These new listings offer a second chance to those who were hesitant because of the increased market prices.

“If a glut of homes that the bank has now taken over and these people are forced to foreclose their homes, if that hits in November, December and January, then it will allow those people who missed out on buying a home a second chance,” McCown said.

If and when the houses hit the market, it will also provide buyers with the ability to use the bargaining power they possessed before the boom that occurred during the lockdown period of COVID-19.

McCown said some homeowners were able to use buyer’s lack of options as a bargaining chip.

“Sellers were like, ‘Let’s see. It needs a new roof and probably could use a new HVAC system, but honey let’s get it sold,’” he said. “It allowed sellers with marginal homes, to get those sold.”

Raw materials including lumber costs continue to challenge the market, also. During the height of the market, buyers and sellers saw the price of lumber and other essential homebuilding materials rise, allowing sellers to further leverage the price of their already built homes.

The prices for materials, mixed with the soon-to-be influx of inventory into the market, could spell a positive message for the outlook of buyers.

Brian Neary, a potential homebuyer from Omaha, opted to build a house rather than gauge the market.

“It didn’t come without costs. We did have to pay an extra $10,000 for lumber costs, but at the end of the day, we will have a new house how we want it,” he said. “People were asking $500,000-plus on houses that needed remodeling. Most were made in the early 2000s with mostly outdated finishes.”

In Lancaster County, median home prices rose from $203,000 in 2019 to $222,900 in 2020, a 9.8% increase. This was par for the course for many of the counties in Nebraska, as almost all of them experienced drastic increases in average house prices.

This is not just the case in Lancaster County. Douglas County, where Omaha resides, had a 7.8% increase in average median listing price from $204,000 to $222,000, indicating the market as a whole remained consistent on a statewide level.

 “We bought our house for 200 (thousand dollars) in 2018. We are going to list it at 240 (thousand dollars),” Neary said.

 

The Nebraska News Service is the state news wire service provided by the University of Nebraska-Lincoln College of Journalism and Mass Communications. Find more coverage at nebraskanewsservice.net.

Category:

User login

Omaha Daily Record

The Daily Record
3323 Leavenworth Street
Omaha, Nebraska
68105-1915
United States

Tele (402) 345-1303
Fax (402) 345-2351