In a presentation sponsored by Security National Bank this past Wednesday local appraiser Gregg Mitchell of Mitchell & Associates presented his view of current Omaha area real estate market conditions including comments on inventory levels. An interesting take away was his analysis that while we in the industry speak of the unusually low inventory of houses for sale as if it were across the board it is really in one segment of the market, that being houses priced from $75,000 to $150,000, that this phenomena is most focused. Our own experience suggests that contributing to this situation is a general lack of equity for homeowners that purchased in this price range five to seven years ago (those that historically would be most likely to be looking to make a move at this point) with 100% or minimum down loan programs and property valuations that are just now exceeding the pre 2009 housing bubble levels. Holding price levels down at this level of the market is a pronounced reduction in the number of first time buyers (see “Where are the first time buyers?) The net result is that with little or no equity the homeowner is not in a position to sell and move up so they stay put longer than they otherwise might. Even without these move up seller / buyers the next levels of the market remain amazingly balanced in spite of a lower than typical number of listings. A point to consider is that housing is unique in comparison with other economic goods in that, with the exception of new entry buyers, there is typically a one for one exchange i.e. I sell a house and then I buy a house. Most people do not accumulate yet another house as they might shoes, televisions and maybe even automobiles. With that in mind it is easy to understand how even the slightest stagnation at the lowest level of the market impacts all levels. A market with a reduced number of listings may feel like an active market, with stories of multiple offer situations and buyers missing out on the house they had their eye on, but it is not a healthy market. While never in perfect balance a more healthy market will result when more young people feel confident enough in their employment prospects that they see value in purchasing a first home. Remember whether buying or selling, moving up or downsizing, Lincoln or Omaha, the Vaccaros; Paul & Susan, stand ready to assist you, your family, friends and co-workers. Call or email us today! Lincoln (402)817-0355 , Omaha (402)577-0820, info@WeSellNebraska.com (Paul & Susan Vaccaro – CBSHome Real Estate 15950 W Dodge Road, Suite 200, Omaha, NE 68118 – Woods Bros Realty 3737 S 27th Street, Lincoln, NE 68502.
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