This income level is exceedingly rare in the state, roughly corresponding to the top one percent of earners.
Almost all households at this income level are homeowners, and many own multiple properties.
High-income buyers played a major role in this boom.
Shutterstock
At least two home sales in Omaha topped $3.5 million in the past five years.
Rising Home Values
Overall home values in Nebraska climbed swiftly during this period.
From early 2020 to late 2021, the median value of single-family homes in Nebraska jumped 26%.
In March 2021, Nebraskas median home price surpassed $200,000 for the first time.
In January 2023 it spiked even higher to ~$500K on average.
Lincoln saw a similar climb, with new home prices averaging $432,000 in 2022.
Market Cycle: Peak and Adjustment
The luxury market frenzy peaked around 20202021.
In 2022, there was a modest pullback as interest rates jumped and overall buyer demand cooled.
The Omaha area saw a 14% drop in the number of homes sold in 2022 compared to 2021.
What Drove the Luxury Market Surge?
In short, strong demand met limited supply.
Pandemic Lifestyle Shifts
The COVID-19 pandemic spurred many people to reevaluate their housing.
For affluent households, it often meant upsizing to gain more space and amenities.
Rather than pausing their purchase plans, many high-income Nebraskans accelerated them during the pandemic.
Affluent Nebraskans generally prefer a house with land over a penthouse unit.
That said, there were a few notable condo purchases in 20182023.
Nebraskas wealthy clearly show a preference for space and privacy over urban high-rise living.
Upsizing Trend Dominates
One might assume that at some point rich homeowners would begin downsizing.
And indeed, some eventually do.
But during 20182023, downsizing was the exception, not the rule, among Nebraskas $500K+ earners.
Continued Upsizing
Many high-income buyers actually traded up to larger homes in recent years.
Rather than selling a 4,000 sq.
ft. house and buying a 2,000 sq.
ft. townhouse, they were more likely to go from 4,000 to 6,000 sq.
ft.
Low interest rates through 2021 made it financially easy for affluent owners to take on a bigger mortgage.
Additionally, the pandemic amplified the desire for space.
During 20182023, Omahas western suburbs continued to be magnets for affluent buyers.
Areas like West Omaha, Elkhorn, and Bennington saw extensive development of high-end subdivisions.
Neighborhoods such as Papillion, Gretna, and Bennington boomed with high-end home construction.
These locations offer proximity to the city but with a more spacious, semi-rural feel.
During 20202021, when remote work was common, even exurban locations 30+ miles out became feasible.
The unifying theme was a preference for more land and newer homes.
All told, fewer than 5% of Omaha-area $500K+ earners bought homes in the downtown/urban core.
By 2022, Lincoln achieved all-time-high prices.
The pandemic only amplified this, as the home became the center of life.
Many realized they wanted a house that could be a sanctuary during lockdowns.
Relocation for Jobs or Opportunities
Some home purchases were driven by relocation.
Companies attracting executive talent to Omaha meant a few $500K+ earners moved into the state for work.
Emotional and Family Factors
Many motivations were personal or family-oriented.
A 2023 survey by Ameriprise Financial found about 2 out of 3 high-net-worth clients own a second home.
Vacation Homes and Getaways
For Nebraskans, common vacation-home destinations include warmer climates and nearby leisure spots.
Many Nebraskans own winter homes in Arizona, Florida, or Texas.
Within Nebraska, lake communities near Omaha have seen high-end second homes.
Overall, owning a second home for vacation/rest purposes became almost a norm at this income level.
With low interest rates, even luxury rentals became an attractive investment.
By contrast, 20182023 was mostly a boom time.
The difference is stark: around 2010, million-dollar sales were a rarity.
Prices at the luxury tier also broke through ceilings that previously held.
In 2021 alone, that figure was likely in the hundreds.
This marks a fundamental expansion of the luxury housing market in Nebraska.