Home Sellers Remain Optimistic

Fewer new-construction houses listed for sale.
RISMedia
The number of houses for sale in the Omaha, Neb., area grew slightly in September, but there were fewer new-construction houses listed for sale and more new-house sales pending than a month earlier.

New detached, single-family houses on the market totaled 1,143 in September, down from 1,148 in the peak month of August and up from 787 in September 2004, according to Trendgraphix data provided to NP Dodge Real Estate.

The number of existing homes listed for sale continued to grow in September, with 3,295 on the market -- 21 more than in the previous month and 1,479 more than a year ago, Trendgraphix said, based on information from the two multiple-listing services in the Omaha-Council Bluffs area.

A national housing economist said some sales may be driven by “fence jumping” from people getting into the market before interest rates get higher. One local Realtor blamed “speculatory selling,” or people who list their houses to see what they can get for them.
Contracted sales in September for existing homes were down from the previous month but were 12.5 percent ahead of sales that month in 2004, Trendgraphix reported. New-home sales were up 28 percent from September 2004.

The continued sales and leveling off of inventory in the new-home market were viewed as positive signs by people in the home-selling business.

“Buyers are still buying, which means we’ll work through this inventory,” CBSHome President Larry Melichar said.

Signs of optimism about the local housing market are evident from one end of the metro to the other:

--Celebrity Homes has announced the opening of Stone Ridge at 162nd and Fort Streets with 500 lots for homes priced from about $190,000 to more than $200,000. The company also is advertising three others coming this fall: Harrison Park, 190th and Harrison Streets; Brook Park, two blocks south of Cornhusker Road on 25th Street; and Williamsburg, Fairview Road and the Kennedy Freeway.

--Benchmark Homes has new models under construction at Ashford Hollow, northwest of 42nd Street and Nebraska Highway 370 in Bellevue.

--NP Dodge next week will hold a “lot draw” for builders of a new subdivision, Sagewood, at 174th and Fort Streets. Eight models are planned.

--Rogers Development Co. is grading 160 acres at 72nd Street and Cornhusker Road for the Settlers Creek subdivision.

--CBSHome agent Mark Ciochon advertised last weekend that he would sell a home within 90 days “or I make your payment.” He said that if a home is priced right and in good condition, he can sell it, usually in about 60 days.

The local optimism has been bolstered by a series of national reports that push a predicted housing slowdown into 2006.

The National Association of Realtors, which originally thought 2005 would be the second-best sales year for both new- and existing-home sales, now says another record is in the works, partly because of the demand created by Hurricane Katrina and partly because of people rushing to buy before interest rates go higher.

Mortgage interest rates increased this week for the sixth week in a row, with a 30-year fixed rate averaging 6.1 percent.

The PMI Group Inc., a mortgage insurer, this week said half of the nation’s 50 largest housing markets, most of them in California and the Northeast, are at risk of price declines over the next two years.

The company’s “risk index,” which places Boston, San Diego and Long Island at a greater than 50 percent chance of experiencing price declines, put Omaha-Council Bluffs at the other end of the spectrum at 6.5 percent. Des Moines was 6.1 percent; Lincoln was 5.7 percent.

The chief economist for the National Association of Home Builders, in a construction forecast conference Thursday, said the housing market “is seeking out a peak,” but it was too early to conclude that it has found one.

The economist, David Seiders, predicted a rise in long-term mortgage rates to about 6.6 percent by the third quarter of 2006 and declines in total housing starts from an estimated 2.032 million this year to 1.94 million in 2006 and to 1.883 million in 2007. After that, he said, annual production should settle around 2 million.

“We’ve been running a tad above that,” he said, “but the comedown shouldn’t be all that dramatic.”

Mike Riedmann, president of the Metro Omaha Builders Association and president for residential sales at NP Dodge, said the new subdivisions opening this fall in the Omaha area represent projects that have been in the works for nine months to two years.
He said that in order to be ready for the biggest sales months -- March, April and May -- developers and builders work in the fall before the first hard frost to get subdivisions to a point where power is installed.

Riedmann and Melichar said the current inventory of houses for sale seems big because of a string of hot sales years that have kept inventories low. “This is more like normal times,” Riedmann said.

Existing home listings may be up, he said, because some owners, hearing about others’ sales, are testing to see how high values have gone.

“We’re seeing homeowners who have said, ‘Gosh, it’s been a hot market, let’s see what we can get for our house,’“ Riedmann said. If they sell, they buy another house; if they don’t get a high enough price, they stay put.

“Those who need to get out adjust their prices so they get it sold,” he said.
But others say they see some evidence of homeowners getting caught making two house payments because of slower sales. “Sixty to 70 percent of the homes I show are vacant, and that’s a really high number,” Ciochon said.

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