Omaha's New Home Construction: Emerging Trends and What They Mean for Buyers
New construction in Omaha reveals a complex trend, marked by price shifts and continued demand for properties. Whether you’re a first-time homebuyer or looking to upgrade, understanding these new construction trends is key to making a smart purchase. In this post, we’ll break down the latest trends in Omaha’s new construction and the U.S. market trends, and explain what they mean for homebuyers, helping you stay ahead of the curve.
According to Marco Santarelli’s article in NORADA, September 29, 2024, “the average home price in Omaha is currently around $279,760, which has seen a 2.5% increase from the previous year. While the market is still relatively competitive, some homeowners are experiencing price adjustments as supply begins to catch up with demand. Marco cites Redfin’s indication that Omaha proves to be a highly competitive market. And while sales have been strong, they are slowing down a bit as the holiday season is upon us.
Builders are reacting to the competitive and tight market by developing budget-friendly housing solutions, particularly for those purchasing their first home. Current fluctuations in interest rates will need to be followed closely, as one considers jumping into the real estate foray. First-time homebuyers should keep in mind that property taxes and insurance are additional costs on top of the mortgage payment.
As Omaha’s new construction market continues to grow, many potential buyers face the decision of whether to rent or purchase a home. Availability to newly built properties and homeownership offers an opportunity to invest in a modern, custom-designed space yet renting may provide more flexibility amidst the changing housing landscape. Understanding the current trends in new construction can help buyers make an informed choice about what best suits their needs and long-term goals.
Zillow states: Apartment renters enjoyed a relatively friendly market this year, at least compared to the record rent growth seen in 2022. Rent growth has held steady at a reasonable pace, and the share of rental listings on Zillow offering a concession — such as free weeks of rent or free parking — is at a record high. Zillow expects renters will not have as much opportunity to negotiate for that free month of rent by the end of next year. The multifamily-construction boom is the primary reason for the rise in concessions. More multifamily units are hitting the market than at any time in the past 50 years, pushing property managers to compete for renters. Those fireworks are predicted to fizzle in 2025, especially in the second half of the year.
Market conditions influence borrowing across all sectors of construction. As a result, incentives are losing their effectiveness as a driving force for investors in the multi-family housing market. As a result, single-family construction and remodeling are becoming increasingly viable options for investment in 2024 and 2025. US News and World Report reports: After rising sharply in 2021 and 2022, home rents continued to rise through May 2024 at a more moderate pace, largely due to those markets that have seen a huge jump in supply. For 2025, rents are expected to rise more for single-family homes than multifamily units. By 2029, rent increases are predicted to track inflation rates but rise more quickly for single-family homes.
Trinity Street Capital Partners indicates that a key challenge in the U.S. housing market in recent years has been the limited availability of homes, particularly in the single-family sector. Ongoing material and labor shortages have slowed new construction, but builders are slowly making progress in addressing these issues. By 2025, the supply of newly built homes is anticipated to grow as supply chains recover and builders regain their full capacity. In Omaha, this trend is expected to have a significant impact, with the local market seeing increased opportunities for new construction as demand for housing continues to rise.
As Omaha's housing market evolves with new construction trends, buyers and investors alike must stay informed about the shifting landscape. While challenges such as material and labor shortages have slowed growth, the outlook for 2024 and 2025 is promising, with increased inventory and more opportunities for single-family homes. Whether you’re looking to purchase a newly built home or invest in remodeling, understanding these market dynamics will help you make more informed decisions. As the city continues to grow and adapt, there’s potential for both immediate and long-term benefits in Omaha’s real estate market.
Sandi Downing Real Estate/Keller Williams
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