Spring Market Frenzy
I saw a meme on social media the other day that said “Nobody appreciates a 50 degree day in March more than Midwesterners. Windows down. Music Up. Grill on,” and I couldn’t agree more. The two days of 70 degree temperatures and the sun did something good for my soul. I just love how the nice weather seems to wake up the world. All of the sudden the bike trails are a whir of two wheels, people are out walking their dogs, and the parks fill with young families. I just love it. The renewal of spring feels a bit like bliss.
Spring is also the time that real estate begins to pick up. Typically around daylight savings, the spring real estate frenzy begins. And frenzy is a good word to describe it right now.
How does that look in Omaha?
At the writing of this entry there were a total of 11 homes for sale in the entire city of Omaha between the price of $150,000 to $250,000, which is what we are now considering the first time home buyer price range.
When we bought our first home, our realtor showed us the home, we toured 4-5 additional homes, retoured the first one a week or so later, and put in an offer. It was $10,000 under asking with the seller paying $5000 of our closing costs, which was a pretty typical offer for that time, and unless you have purchased a home very recently, your transaction probably looked similar to ours.
In today’s market, homes are on the market for fewer than 24 hours and buyers are paying an appraisal gap and sellers’ costs. It looks something like this:
*Home goes on the market at 10:30 am
*Text client about listing
*Meet at the home to show at 4:30 pm
*Tour home with 10 other agents and their clients
*Call listing agent: find out that there are 34 offers on the home, all over asking price, with three of them being all cash. Besides price, the seller would also like closing costs and an appraisal gap in the offer.
Unless you have a large stash of cash lying around, it is really difficult to get into a home at that starting price point. To make it worse, investors from all over the country are buying real estate in Omaha. Since our median home price is just over $230,000, investors from bigger cities see the potential as flippers or landlords without the $1,000,000 price tag that comes from buying in their home cities.
So what can you do, especially if you are a first time home buyer who is trying to break into this market? If saving an extra $10,000+ isn’t feasible for you, then I would look into widening your search. View homes that are not updated. While there are a lot of home projects that require permits and professionals, there are also a lot of projects that you can learn how to do from youtube. Flooring and paint go a really long way in the feel and appearance of your home. You should also widen your search to discover new neighborhoods and surrounding towns. The Omaha metro area is expanding: look for homes in Springfield, Fort Calhoun, Blair, and Mead, just to name a few. You’ll have less competition even if your commute grows a little bit. And even though interest rates have crept up a bit over the last month, they are still historically low. Just ask someone what their rate was in the early 80s, but be prepared for the WHOLE story, not just their interest rate. Hint: the all-time high was 16.63% according to Freddie Mac data.
If all of this sounds daunting, don’t worry because you have realtors who are doing this day in and day out. Whether you are buying or selling, trust your most valuable asset to a professional realtor. It may be easy to get a home under contract, but a realtor will get you more money with fewer obstacles.
As always, thank you for trusting me with your friends and family. I am honored and humbled by the business that you all have sent me since my move to full time. If you ever have questions about the market conditions or how to become an investor or just want to catch up, please reach out.
Spring is mere moments away, and before you know it, I will be complaining about the heat and humidity and wondering when the Pumpkin Spice Cold Foam will be back on the menu. In the meantime, try to take notice of blue skies, green grass, and blooming tulips.
Your favorite realtor,