Home prices squeezing out lower income buyers
LINCOLN, Neb. (KOLN) -The housing market in Lincoln is hot.
Houses sell almost as quickly as they’re put on the market, and some local home buying groups said escalating prices could squeeze out an entire group of homebuyers.
“I’ve been thinking about it for five or six years, especially because we were renting and renting,” said Raja Elhoni, a first-time home buyer.
Elhoni started her homebuying journey with a class at Neighborworks-Lincoln in 2019.
“I told my husband ‘It’s time to get our own home,” said Elhoni.
She was ready to hit the market in 2020 when COVID-19 struck when she finally felt confident to start shopping.
“We made like 5 or 6 offers and every offer we made, there are others who pay higher,” said Elhoni.
It took a while for the right offer to stick. And when it did, it was thousands over the asking price, which can be difficult when the median sale price in Lincoln is around $220,000. Neighborworks clients typically can only afford up to $173,000.
Wayne Mortensen, CEO of Neighborworks said year over year, home prices are up about 20%.
It was frustrating for me,” said Elhoni.
It’s been the case for homebuyers across all financial statuses, but Neighborworks-Lincoln said they’re worried escalating prices are going to shut out potential buyers like Raga.
“It acts like an eBay auction where the price goes up until you get to the person willing to offer the most,” said Charlie Wesche, real estate director at Neighborworks. “And that’s tough because it does price out a lot of clients that go through Neighborworks and home buyers in general.”
Cash buyouts, or buyers who are willing to not have home inspections, can often edge out the competition. A supply shortage is driving the price differences too.
“Economists expect prices will get up to speed again in late fall, early winter,” said Mortensen. “Lincoln might not see a really big change until March or April of next year.”
There were only 46 Zillow listings under that $173,000 threshold on Monday. Realtors said for a city Lincoln’s size, there should be just over 1,200 available single family homes. On Monday, there were 143.
Copyright 2021 KOLN. All rights reserved.