Omaha Real Estate - Homes sales fall sharply

Home sales fall sharply in Omaha
By Christine Laue
Published: Tuesday, August 26, 2008 4:49 AM CDT
Midlands News Service

OMAHA - Home sales in the Omaha metropolitan area dropped 34 percent in July
compared with the same month last year, continuing a trend of sluggish sales
this year and suggesting the housing market hasn't bottomed out yet.

Spokesmen for the city's largest real estate companies said overall sales
this year are down 15 to 20 percent compared with 2007.

Nationally, sales of existing homes rose 3.1 percent in July, mostly because
of sales of deeply discounted properties in parts of the country hit hardest
by the housing bust.

"I would not have guessed the market would be off this much this year," said
Vince Leisey, president of Prudential Ambassador Real Estate. "I thought the
market would be tough, but I didn't think we'd be off 20 percent. . . . I
don't know if we've bottomed out or not, but I think we're awfully close."

Leisey said the subprime mortgage crisis has created a domino effect:

Lenders tightened their standards, eliminating many buyers.

Owners in some areas saw the market value of their homes fall.

Owners unable to sell their homes, or unwilling to sell at the lower market
price, could not buy new houses.

In addition, Leisey and others said, low consumer confidence in general kept
many potential buyers on the sidelines.

"It's going to be a long haul to get out of this, but it didn't happen
overnight," Leisey said.

Gregg Mitchell, president of Mitchell & Associates Inc., an Omaha real
estate appraiser and consultant, said in his monthly report on the west
Omaha market that high gas prices this spring and summer slowed sales of
homes costing $400,000 or less.

But gas prices have declined a bit and August looks better, his report said.

"Every Realtor I've talked to in the last three weeks is busy showing
houses," Mitchell said. "It tends to be a pretty good predictor of what
we'll see in contracts down the road."

April, May and June typically are peak months for sales activity, he said.

But sales in each of those months declined this year when compared with the
same months in 2007 and 2006.

"The real estate market in Omaha, Nebraska, today is slower than it was in
'07," said Larry Melichar, president of CBSHome Real Estate. "But remember
this - most of '07 was a very good market."

Omaha experienced strong home sales from 2002 to 2006. For most of 2007,
while much of the country struggled, sales were even with or slightly better
than 2006.

But 2007 ended on a sour note. Home sales in Omaha fell nearly 10 percent in
the fourth quarter, compared with the same period in 2006.

And that downward trend has continued.

Home sales in the first quarter this year were 24 percent lower than in the
first quarter of 2007, according to numbers from the Greater Omaha Chamber
of Commerce.

Van Deeb, owner of Deeb Realty, characterized the market as "good" but
acknowledged that sales for the entire market are down.

"I think we're on our way back up," Deeb said, "but we're not on our way
with a sharp incline."

Real estate experts have said that reducing inventory is key to stabilizing
the market, and while the number of homes for sale in July compared with
July 2007 was nearly flat, the number of new homes decreased.

The number of homes on the market in July of both 2008 and 2007 hovered
around 6,300, according to the Multiple Listing Service.

But the portion of that inventory that is new construction has decreased,
said Robert Wiebusch, operations director of NP Dodge Real Estate.

There were 1,446 new homes on the market in July 2007, compared with 1,188
in July 2008, he said. That's an 18 percent drop.

Meanwhile, building permit numbers - an indicator of future supply -
decreased 24 percent, from 356 in June 2007 to 270 in June 2008, according
to a Greater Omaha Indicators report.

Since the beginning of 2008, however, the number of building permits for
single-family residences has steadily increased. Scott Strain, senior
director of research at the Greater Omaha Chamber of Commerce, sees this as
a positive sign.

"What I can tell you is that it's a little more optimistic outlook," he
said.

"I always look at it as the builders know their market, and they're seeing
something in the marketplace that they want to act on," Strain said.

This report includes material from the Associated Press.