By Rich Rodenburg, Nebraska Home Sales REALTOR®
I don’t have a crystal ball, but I do pay attention to the cyclical marketplace and to industry predictions.
So here goes, starting with recent trends and indications of activity.
The inventory of existing homes was thin last year. There were many more potential buyers than there were homes to go around. This drove prices up about 6% for the year. In Lincoln, the median existing home sold for $144,700 in 2015 (up from $137,000 in 2014). That same home, a 3 bedroom, 2 bath with 1270 square feet, sold for $164,900 in 2017. Even with the shortage of homes, the number of homes sold grew from 3,142 to 3,625 over the last four years. Days on market went from 21 to 12 to 10 days. In 2017, half the homes sold in 6 days or less.
In the first couple of weeks of 2018, this trend seems to be continuing. My partners, Kim Soucie, Tim Reckling and I, put two homes on the market and already have them under contract. We have helped two buyers with accepted offers as well.
Some prognosticators are predicting that some areas of the country are approaching a similar bubble that crashed the market in 2007-08. I don’t share that fear, at least in Lincoln. 6% appreciation here is a healthy number. The crash of 10 years ago was mostly the fault of predatory lending practices. Since then, buyers are more protected, and interest rates are mostly fixed (they can’t go up after a few years).
Outside influences could affect our local market. We dodged some bullets from early versions of the new tax bill that would have eliminated deductions for home interest payments, for example. The National Association of REALTORS® has a strong lobby and is all about protecting home ownership. Interest rates are still very low. If rates go up, a buyer will be able to afford less of a home.
Lincoln is strong. No major industries are threatening to leave. Many companies (with higher paying jobs) enjoy the virtues of our Silicon Prairie.
To summarize, the market should remain strong this year, and the importance of having a REALTOR® continues to be vital in today’s marketplace.