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Home sales

A sold sign hangs outside a home in south Lincoln. In a sellers' market, buyers need to act quickly. "If you find the right house, there is no time to sleep on it," said Johanna Rhoads of RE/MAX Real Estate Concepts.

Sabrina Hellbusch sold her three-bedroom home this summer, in the midst of the hot market for mid- and lower-priced homes.

Hellbush's agent, Johanna Rhoads, had told her to expect a quick sale and perhaps multiple offers.

“No way," she thought.

Hellbusch had the house ready. She had touched up the paint on the baseboards and eliminated some of the clutter, like her mother suggested. Her home of a dozen years was located in the Eastridge area, near a school and a neighborhood pool, a nice location for people with children.

And she priced it right for a 1,000-square-foot home with no basement: around $104,000.

Hellbusch had three or four offers before 3 p.m. on the summer day it went on the market. None of them were below her asking price. And she quickly sold it to a couple who were prequalified through the city’s NeighborWorks program.

Hellbusch was shocked by the amount of interest in her home. Just a few years earlier a real estate agent had told her she would be lucky to get $95,000.

It has been a sellers' market for a couple of years.

The past two years -- 2015 and 2016 -- have seen aggressive markets, said Brice Middleton, executive vice president of the Realtors Association of Lincoln. “If a home is priced right and nothing is wrong with it, it was gone within two or three days, often with multiple buyers,” he said.

Many buyers were frustrated, he said. They would go through three or four homes before someone accepted their bid, he said. "It was a frenzy."

Buyers cannot take their time to make a decision, said Rhoads, with RE/MAX Real Estate Concepts. She tells her buyers. "If you find the right house, there is no time to sleep on it." 

Jon Rademacher, a sales associate at Woods Bros Realty, remembers one sale that stood out. His client, a first-time buyer, made one of four offers on a house, a real nice house in the Highlands. He was certain that house would sell in a day and his buyer went in with an offer well over the list price.

She didn’t get that house and she missed out on a second one. “It was really discouraging,” said Rademacher.

But the Highlands sale fell through, and the listing agent called him to see if his buyer was still interested. The second time around, she got it, he said.

Most of his own listings sold within the first week to 10 days, he said.

Rademacher, who has been in the business for 14 years, has seen other boom markets, but not to this extent. It is magnified because there is not enough inventory. 

And he expects it to continue for at least a couple more years. Inventory is not going to come back quickly, buyers are still out there and interest rates are still really attractive, he said.

“It’s hot, particularly in the $100,000 to $175,000 range,” said Arla Meyer, a managing broker at Woods Bros.

And it has definitely been a sellers' market, in part because of the dwindling number of homes available. 

Over the past five years the number of houses on the market has dropped dramatically, by 50 percent. In December 2012 there were 1,334 houses on the market in the Lincoln area -- everything from $70,000 homes to million-dollar mansions, Middleton said.

At the end of 2016 there were just 743 houses on the market. Inventory has been trimmed about 100 houses a year.

The low inventory has also driven up prices.

The average home sale price at the end of 2012 was $166,500. It shot up to $193,000 at the end of 2015, then dropped slightly to $191,300 at the end of last year. And it seems to be plateauing, said Middleton.

Local experts gave a variety of opinions for the current sellers' market and for the lack of inventory in starter and mid-priced homes, which is part of a national trend.

To start, there are fewer new homes being built. 

There is potential for new home construction on paper in Lincoln. The city has thousands of preliminary plats and plans approved, providing a 10-year supply based on how much is normally built each year, according to David Cary, the city’s planning director.

However the number of final plats, which occur when construction is about to begin, is down. 

Lending for housing construction has been much tighter coming out of the recession, said Cary. It’s harder to get financing for speculative construction. Contractors and lenders are less willing to take that risk, he said. So there are fewer new units out there.

In addition the median price of new homes in Lincoln is pretty high and outpaces what many people want to spend or can afford, Cary said. 

Builders and developers might need to come down to the $200,000 range, he said. 

But some builders and developers say the city is also not moving quickly enough to open up new areas at the edges of the city.

The current mayor, philosophically, believes in building inward, filling in the built areas of the city, said Matt Kleinschmit, president of the local Home Builders Association and owner of Pride Homes.  

The city is reluctant to invite annexation and big land developments at the edge of town, he says. This is stifling the developers, who want to till up that 80 acres near the city limits, he said. 

There are also fewer existing homes on the market.

During the Great Recession people made improvements in their current homes, rather than moving up to larger homes, so they are satisfied for now. With the very low interest rates many people refinanced and are comfortable with their monthly payments, said Jack Gregg, co-owner of Sellstate Performance Realty. 

Starter homes, from $95,000 to $120,000, were the hottest sellers. But homes in the $180,000 to $200,000 were often selling in a day or two, said Rhoads. 

More expensive homes, in the $350,000 to $450,000 range, still sell, but generally more slowly. They might sit for 30 to 60 days, said Middleton. 

The big boom of the summer has slowed a little, though it is still an active sellers' market, agents and brokers said. 

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Reach the writer at 402-473-7250 or nhicks@journalstar.com

On Twitter @LJSNancyHicks.

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Reporter

Nancy Hicks reports on Lincoln city government, but she’s been following the leaders of local and state government for more than 40 years.

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