With fewer homes on the market, agents pull out all the stops – even knocking on doors

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Posted: Tuesday, March 25, 2014 12:00 am

One Omaha husband-wife real estate team drops off custom packages — complete with market information, photos and even a bag of cookies — to strangers they hope to nudge into moving.

A competitor has started hosting office call nights where the mission is to drum up house sellers.

Still other area real estate agents have taken to knocking on doors of homeowners they also don't know to try to secure a dream dwelling for a client set on a specific neighborhood.

Such ramped-up prospecting tactics reflect today's local housing market where the selection of for-sale homes has hit a 10-year low. Factors keeping sellers at bay — including cold weather, fear of not finding a replacement home and tapped-out equity — in turn have led to a reversal of a nearly three-year growth streak in Omaha-area home sales.

“This is very unusual,” said Mike Riedmann of NP Dodge Real Estate. “There are not enough listings; buyers are getting frustrated.”

Last month the number of homes for sale dropped below 3,500, fewer than any February in a decade and 40 percent fewer than were available in 2008, according to Omaha Area Board of Realtors records. The number of homes signed to a sales contract in February also fell, by 7 percent, compared with the same month a year earlier.

New home construction permits fell by 28 percent in February compared with February 2013 in Douglas and Sarpy Counties, according to MarketGraphics of Nebraska.

Industry leaders, though, expect better times to prevail as spring takes hold.

Omaha appraiser Gregg Mitchell is among those who believe 2014 sales will catch up to 2013, a year he said had the highest monthly sales average since the Great Recession.

Vince Leisey of Berkshire Hathaway HomeServices Ambassador Real Estate also foresees a year that almost mirrors last, except for home prices rising 4 percent to 5 percent.

Mitchell described the last two years as an exceptional rebound period where record low interest rates and pent-up demand spurred sales. The spurt peaked last spring and was followed by unsettling national events such as the federal government's partial shutdown and a rocky rollout of Obamacare. With winter now past and interest rates still low, Mitchell said, activity should pick up.

Mike Becker of the Bank of the West has seen pre-approval applications for the first three weeks of March already outpacing February's count, despite tightening of mortgage rules. So far this year, he said, the volume of home loan applications in Nebraska is up about 20 percent over last year.

“We're seeing a lot of first-time home-buyer interest,” said Becker, regional sales manager of mortgage banking. “We've gone back to people that maybe didn't qualify last year, revisiting with them to see if we may be able to help them.”

Vital to the equation, of course, is having enough for-sale homes to meet the demand.

Currently in Douglas and Sarpy Counties, there is a 3.2-month supply of available new and existing single-family homes on the market, Mitchell said, with the $75,000-to-$150,000 range suffering the worst drought with a 2.8-month supply. An ideal supply, he said, is five to six months.

Brad Witt and his wife, Kari, of Keller Williams Realty are among agents who have gone all out to stir up business, including hand-delivering a bound market analysis (plus treats) to residents of hot neighborhoods. “We walk neighborhoods to actively find people. We do a lot of door-knocking,” Witt said.

Leisey said Ambassador is rolling out a “Nosey Neighbor Open House” program to help respond to the low inventory. Recently trademarked, it involves hosting private open houses for neighbors only. Door-hangers, fliers and bags are part of building relationships with potential buyers and sellers.

Deda Myhre of CBSHome, also president of the Omaha Area Board of Realtors, expects the assertive approaches to continue. “This is something we will see gaining momentum until the market starts to open up.”

The broader community stands to benefit, too, the National Association of Realtors points out. The association says that each typical home sale in Nebraska generates about $48,156 in income and spending.

That amount, based on a median-priced home of $137,500, includes income earned by real estate professionals, spending on consumer items such as furniture and paint service, multiplier spending at restaurants and entertainment venues, and additional home production. (NAR says the sale of eight existing homes typically induces construction of one new home.)

As the Omaha area trends to a seller's market, industry leaders said consumers more often will see multiple bidders vying for a property and upward pressure on home prices.

Indeed, Mitchell said he started to see that happen about four weeks ago when a few new listings sparked two to three offers apiece. At least one of the houses sold for several thousand dollars above asking price after a bidding war. “We are really seeing a surge in demand and we're going to see prices move this spring,” Mitchell said.

The fierce competition caught Lou Wyman off guard last week. His Millard-area ranch-style home sold 18 hours after it went on the market.

Wyman had a fridge magnet mailed by an agent he doesn't know, but his decision to sell was motivated more by his only daughter going away for college.

At the end of this month, Wyman will downsize from his three-bedroom, man-cave-equipped home to a lakefront apartment.

“I didn't really have time to look for other homes. The nice thing is I don't have to mow.”

While real estate agents say inventory is low across the metro area, they say it's exaggerated in certain established neighborhoods that have low turnover anyway. So when a commercial client of P.J. Morgan Real Estate said his growing family preferred to settle in Dundee, that had agents searching beyond the for-sale listings.

Susan Clark said her team spread the word in business and social circles: Does anyone know any homeowner in Dundee who might want to sell?

Jolene Hotovy felt the inventory pinch farther south in Papillion. She had considered selling her home of 23 years this summer, when her swimming pool was full and inviting — until Realtor Lisa Ritter of Re/Max Results explained that conditions were ripe now.

The house sold in two days, at the asking price.

Nationally, the inventory of for-sale homes is at one of its lowest points in recent years, said Danielle Hale, director of housing statistics for the National Association of Realtors. A supply of six to eight months is normal, she said, and today's supply is under five months.

Financial capacity is a factor deterring many from selling, said the association's Jessica Lautz. She cited a recent survey in which 13 percent of recent sellers wanted to move earlier but stalled because their home value was less than they owed.

Locally, NP Dodge's Riedmann, who heads residential sales, suspects another key reason for low inventory is the 2012 bankruptcy of HearthStone Homes, which for decades had been one of the most prolific builders, especially for first-time buyers.

Other options exist, including Celebrity Homes, Legacy Homes and other builders, but Riedmann said a gap remains in that lower price category. “People in that price point have to look at existing homes, and that has really gobbled up the existing inventory,” he said.

Owners of HearthStone models that were built about seven years ago around 190th and F Streets are among those courted by agents. Michelle Pederson got a call touting quick sales in the Oakmont subdivision.

Neighbor Laura King-Homan said her husband also was contacted last week. When she got home from work that same day, she found a fancy marketing packet from a competing real estate team. The family wasn't planning a move yet, but the attention did make them think.

“You feel like the most popular girl at the prom because all these people are calling.”

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