Premium ContentClick on Premium Content on the Featured navigation bar for information.
Home sales in Omaha have pulled out of their downturn, and the national accolades about the local real estate market and local economy have been pouring in.
But a new report shows that Omaha has a way to go on a key indicator — housing prices — before the market fully stabilizes.
The report from Trulia, an Internet listing service, showed a marked increase in the number of Omaha homes for sale with reduced asking prices.
The company said nearly one-third of all real estate sellers within the Omaha city limits had cut prices at least once. That portion of homes with price cuts, not the size of the cuts, ranked 10th highest among major cities.
The state of housing prices is an issue for any homeowner — even those who aren’t looking to sell. Sinking sales prices in an area mean less equity in neighboring homes, and lower values make it harder on homeowners if they need to sell or want to refinance.
Despite the latest report, there are signs that metropolitan area home prices are bottoming out.
According to the National Association of Realtors, metro Omaha’s median sales price rose last quarter in comparison with the third quarter of 2008. That was the first quarter-over-quarter rise Omaha had seen through 2008 and 2009.
The increase was modest — from $137,500 to $137,600 — but only 30 out of 153 metro areas reflected any rise in prices.
For November, the median sales price locally held steady compared with the same month last year, and that has happened three of the last five months, according to figures provided by NP Dodge Real Estate.
Mike Riedmann, president of residential sales for NP Dodge, said he wasn’t surprised by how often home sellers have been cutting prices. He said NP Dodge agents have been aggressive in cutting prices if a home is sitting without offers.
“We’ve got a pretty good market here, but part of it is you need to be aggressive as far as moderating the price.”
Riedmann said he believes prices have stabilized and are poised for improvement.
Overall, the local housing market has shown definite improvement in 2009.
Through November, home sales are up 15 percent over the same period in 2008 and are off 7 percent from a peak in 2006. The boost largely comes thanks to the $8,000 federal tax credit for first-time homebuyers.
The housing market was a leading reason Forbes last month called Omaha the nation’s fastest-recovering city. Forbes followed that up by calling Omaha the nation’s most affordable city, again thanks to the housing market.
Still, some segments of the market continue to face challenges. While Omaha’s first-time market shows well in sales, the step-up market isn’t as hot, and upper-end sales continue to lag. Sales of newly built homes are up 14 percent from last year’s low, yet remain short of 2006 figures by 38 percent.
On home prices, in the percent of listings as of Dec. 1 that had a reduced price, Trulia ranked Omaha 10th, behind cities such as Seattle; Portland, Ore.; Milwaukee; and Memphis, Tenn. Minneapolis ranked first with 40 percent of listings cutting their price.
Price cutting has become more common since summer. In June, Omaha saw 23 percent of its listings reducing their prices, but that number has stood at 32 percent in November and December.
A Trulia official acknowledged that some of Omaha’s price cutting relates to the season and a slower winter market.
But Ken Shuman, Trulia’s spokesman, said the numbers indicate that buyers and sellers locally still cannot agree on the fair market value for homes.
Omaha sellers, he said, tend to make smaller cuts to their listing prices than homeowners in other cities, which isn’t always enough to get buyers to notice.
“Slash now, sell quicker,” Shuman said.
Sellers across the country also are showing an urgency to act now so they can benefit from the housing tax credit, Shuman said. The credit has expanded to benefit some step-up buyers, not just people buying their first homes, but homes must be under contract by April 30.
Local real estate officials said a lower supply of starter homes and continued demand mean solid prices for that segment of the market.
“You don’t have to discount the price of a first-time house,” said Shawn Maloy, president of the Omaha Area Board of Realtors and an agent with Maloy Real Estate.
For the year, the main housing price indicator is looking to decline.
The metro area’s median sale price peaked at $141,000 in 2006 and 2007, then fell to $137,000 last year, according to figures from NP Dodge. Through November, that price stood at $134,000 — a statistic that was weighed down, in part, by the heavy volume of starter home sales.
Still, Larry Melichar, president of CBSHome Real Estate, said sellers now are more realistic in setting their initial listing price. And going forward, he said, the metro area’s balance of supply and demand should spell price increases.
Contact the writer:
444-1128, jeff.robb@owh.com
Copyright ©2012 Omaha World-Herald®. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
