Global crises have a way of exposing vulnerabilities within systems. And now two years into an onslaught of new realities, professionals in the real estate space are grappling with both the challenges presented by labor shortages and material supply constraints, as well as the opportunities for innovation to address evolving workplace and lifestyle needs via […]
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Global crises have a way of exposing vulnerabilities within systems. And now two years into an onslaught of new realities, professionals in the real estate space are grappling with both the challenges presented by labor shortages and material supply constraints, as well as the opportunities for innovation to address evolving workplace and lifestyle needs via physical offices and rooftops.
Residential Real Estate
“We started 2021 with a boom in new construction,” said Tasha Moss, Realtor with Berkshire Hathaway HomeServices Ambassador Real Estate. “So many people wanted to build a home that suited their new lifestyle, whether it be working from home full time, multigenerational living or home schooling. So much had changed in the lives of many that they wanted the perfect place to call home.”
However, Moss recalled that around April, significant price increases caused by supply shortages, as well as distribution and the lack of labor, made it hard for many to go the route of new construction built to serve their new needs.
“This only added to the craziness we experienced for homebuyers trying to buy existing homes and to compete with so many others to get a home,” she said.
In fact, Moss has gone so far as to say that 2021 is likely “the best year in the 20 years I have been in the business for home sellers.”
“They were able to put their home on the market when they wanted, able to say when they wanted to close and, most of the time, they were able to get even more for their home than they ever dreamed,” she summed up.
Plus, at this point in time, Moss noted that “COVID is not impacting the market at all.”
“Yes,” she continued, “as agents there have been changes that we have made to our business during the beginning stages of the pandemic that we are still utilizing; however, COVID at least on the surface, is not affecting the market.”
When asked more about opportunities for Realtors at present, Moss indicated there is room for all parties involved to think outside of the box for ‘win-win’ outcomes.
“There are other driving forces for both buyers and sellers, and it does not always come down to money,” she said. “The key has been marrying the needs and wants of both parties to get to an end goal that works for everyone.”
Nebraska Realty President and CEO Andy Alloway largely described another “very competitive year” in the residential market “of high demand and low inventory.”
Given the current environment, he encouraged buyers to meet with Realtors before beginning the process.
“They will help you lay out a strategy that gives you the best opportunity for success in this highly competitive real estate market,” Alloway said. “The other advice for buyers is to be patient and try to leave emotion at the door as much as possible. It is easy to get caught up in bidding wars, but ultimately there will always be the next house to come along.”
And, while “it’s a seller’s market for sure,” Alloway stressed that there is a limit to what the market will pay.
“Offers are not just about the highest price,” he said. “Often times, that can be deceiving if the property doesn’t appraise for the winning bid price and the buyer is unwilling or unable to make up the difference. This is again where the experience of the Realtor comes into play to help create the best possible outcome.”
Lastly, Alloway said in a competitive market, sometimes the best thing to do is to wait – think mid- to late-summer or fall.
“There are usually fewer buyers you are competing with, because many people that needed to make decisions based on schools have already exited the market for the year,” he said.
On the other side of the coin, Alloway said they are often hearing sellers say, “I would sell but, given the market, I don’t know where I would go?”
“If this seems like the right time to move, there are creative ways to tap a home’s equity or structure contracts that would allow you time to find what you want,” he said. “Some homeowners are also choosing to sell and rent for a period of time to allow them time to find exactly what they want.”
It’s also not uncommon for them to hear, “Well we are just going to pay a higher price when we buy. So, is it worth it?”
“While this may be true, unless they are downsizing,” Alloway noted, “the key factor here, in many cases, is the interest rate.
“After years of historically low rates, most economists are predicting that rates will start rising during the latter half of the year.”
Going forward, Alloway said a key initiative will revolve around providing solutions to the housing affordability crisis – experienced locally and across the country.
“Homeownership is the largest wealth generator for most people,” he said. “We want to help drive those opportunities for as many people as we can.”
Ravello (Courtesy of Metonic Real Estate)
In response to local and regional consumer and investor demands, Metonic Real Estate Solutions has launched Phase No. 2 of its Ravello 192 project located at 192nd and Pacific streets.
“This project focuses on our ‘apartminium’ product type,” said Vice President of Investor Relations Josh White, “which combines the comfort of a condominium with the convenience of an apartment community.”
In early January, White said they are moving into 2022 with a continued build-out of the apartminium product in different submarkets in Omaha.
“First, we are soon starting construction on Vestara located at 72nd and Schramm in Papillion,” he said. “Additionally, later in the summer, we will begin construction on two additional apartminium properties: Allora168 located at 168th and 370 in Gretna and Capriana Homes located just south of 210th and Maple in Elkhorn … All of these properties are attractive to our investors, as well as the tenants that choose to live in a townhome-style development in an apartment community.”
Commercial
In a similar refrain to residential leadership, NAI NP Dodge Vice President Spencer Morrissey said there is significantly higher demand from investors and owner-users searching for existing office buildings available for purchase due to the cost of construction, lack of available labor, and the unknown timing of the delivery of supplies and materials.
“Demands for leasing will continue to fluctuate as the uncertainty and effects from the various mutations of COVID-19 continues,” he said.
A big takeaway: “There is still a need for office space for businesses to operate efficiently. And companies are going to have to continue to keep their head on a swivel and adjust accordingly if COVID-19 breakouts occur.”
As an office broker at Investors Realty, Mike Rensch also has his finger on the pulse of trends within the four walls of local business nerve centers.
“We started to see less velocity of deals (lease) in 2020 and that continued in 2021,” he said.
To put this in perspective, the vacancy rate in metro Omaha in the fourth quarter of 2019 set at 5.5%. Fourth quarter of the following year, it had ticked up to 8%. The office market for the fourth quarter of 2021 has risen again to 9.1%.
“The pandemic is obviously the driver in the increased vacancy rates over the past two years,” Rensch said. “The vacancy could increase in the early part of 2022 due to the fact that large amounts of space continue to be added to an already ample supply of available space.”
Office sales in the last year were described as “really strong.”
“We saw sales volumes in certain quarters of 2021 match those of the same quarters in pre-pandemic times,” he asserted. “Prices of those sales were also good from a seller’s standpoint.”
The pandemic, Rensch said, has changed the way people go about their daily lives.
“There is always a light at the end of the tunnel and as people become more comfortable and safe within their environments, the hope is more people will return to the office,” he said. “We are optimistic this will be the case in the Omaha market.”
The challenge for Realtors in the new year remains: “The continued changing office landscape due to the pandemic.”
“With that said, that will create opportunities for companies that want to expand, shrink or just move,” Rensch noted. “We are already seeing some larger companies in town bring back their employees and others will follow. Those companies will have options in the market when it comes time to move that were not there before — whether it’s looking at the ample supply of first-generation space or really nice second-generation space that has recently been added to the market.”
As a construction firm partnering with others in the built and property spaces, Boyd Jones leadership referenced an abundance of project activity not limited to a particular “hot” sector or building type. But first, when asked about their own office “home” at the historic the Rail & Commerce Building, Business Development and Engagement Manager Bridget Bumgardner noted they hit their four-year anniversary at the former Burlington Mail Terminal in August.
“It’s rewarding to see our vision in action,” she said. “This revitalized, historic building is a reflection of our values and has enhanced our ability to recruit and retain employees. We continue to receive positive feedback from people in the community that are thankful to see buildings like ours and KETV’s be a catalyst for continued redevelopment.”
As noted, the space is shared by the local TV affiliate and the likes of Commerce Village, a coworking community.
“We’re continuously encouraged to see creative companies and entrepreneurs choosing this as a place to grow and innovate,” Bumgardner added.
From its home to client-spaces, Lead Estimator Adam Marr highlighted the Abbott Warehouse.
“The market for industrial real estate in general is thriving, thanks to continued demand in e-commerce and a trend for shippers to keep more inventory on-shore, and we’re seeing those broader trends drive activity in Omaha,” he explained. “We started earthwork in December for a new, 150,000-square-foot warehouse on Abbott Drive near the airport that will deliver much-needed supply to a market that looks to stay hot in 2022 and beyond.”
Nonprofits, too, have been faced with greater demands for their services.
“We broke ground in August on a new facility for Kids Can Community Center that also illustrates our commitment to long-term relationships with our clients,” said Revela Director of Preconstruction Leila Knowles. “When complete, the new Kids Can building at 48th & Q streets will more than double the organization’s footprint and ability to serve local children with early childhood and after-school programming, when compared to its existing facility (which was also built by Boyd Jones in 1964).”
Fittingly, Knowles also highlighted its partnership with Better Homes & Gardens Real Estate.
“As housing demand continues to grow throughout the metro,” she explained, “Better Homes and Gardens Real Estate’s The Good Life Group is expanding their footprint with a new, two-story office building in Elkhorn. It’s exciting to help them grow into a new 15,000-square-foot building only a few years after we worked with the organization to renovate their 5,700-square-foot office in the historic Dundee neighborhood.”
