U.S. Housing Market Conditions, Second Quarter 2002: National Data

Housing Market Profiles

Lincoln, Nebraska
Stability characterizes the Lincoln metropolitan area’s economy and housing market. The area’s economy is anchored by the State government and the University of Nebraska. As a result, the area has not been as affected by the economic slowdown as have other areas. The government and services sectors provide stability to the local economy, employing more than 50 percent of the workforce. Nonagricultural employment decreased less than 1 percent between June 2001 and June 2002. Government jobs increased 1.7 percent between June 2000 and 2001. Led by layoffs at Goodyear, manufacturing employment declined by 6 percent during this period, but manufacturing jobs comprise only 10 percent of the local workforce. Despite some layoffs, however, Lincoln’s unemployment rate was a relatively slight 3.6 percent for the 12 months ending in June 2001.

With nearly 750 permits issued in the first half of 2002, single-family activity is up 1.5 percent compared with the same period last year and is poised to exceed the annual average for single-family units permitted during the 1990s. Homebuilding is most active in the south and southeastern parts of the metropolitan area. Existing home sales have remained relatively constant during the past 2 years. The average sales price of an existing home increased by 4 percent over the past year, comparable to the rate of increase each year since 1995. According to the REALTORS^® Association of Lincoln, 1,500 existing homes were sold at an average price of $123,659 in the first half of this year compared with 1,460 existing homes sold through June 2001 at an average price of $118,922. The REALTORS^® Association also reports that approximately 370 new homes were sold in the first 6 months of 2002 at an average price of $179,856 compared with 300 new homes sold for an average price of $177,233 last year.

Multifamily permit activity has slowed in the Lincoln metropolitan area, a pattern consistent with multifamily activity in most other metropolitan areas in the Great Plains. Only 162 permits have been issued in Lincoln through June 2002. Nevertheless, Lincoln’s rental market is balanced. Currently, the overall rental vacancy rate is estimated to be approximately 6 percent. Rent increases since 2000 have been relatively modest at approximately 2 percent annually, according to local sources.

Business and economic development projects continue to add stability and diversity to Lincoln’s economy and housing market. Prominent among new developments in Lincoln are the University of Nebraska Technology Park Technology Development Center and the Nebraska Center for Excellence in Electronics. The Technology Development Center provides incubator space for new technology-based companies, and the Nebraska Center for Excellence in Electronics provides companies with new electronic product testing, prototype development services, and technical training. A significant development in manufacturing is the Kawasaki Corporation’s new railcar facility, which was added to the company’s existing plant. The Kawasaki project cost $50 million and added 300 new durable goods manufacturing jobs to the Lincoln economy. New commercial shopping and office space development include phase two of the South Pointe shopping center, with 120,000 square feet of new commercial space and 50,000 square feet of office space under construction. Appian Way, a new regional shopping and office complex, is currently preparing ground for 2 million square feet of commercial and office space. Wal-Mart and Menard’s, a building supply store, have committed to the Appian Way project, with Wal-Mart developing a 900,000-square-foot superstore.

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