NORFOLK, Neb. -- It’s no secret the housing market across the U.S is a hot topic of discussion these days.

According to a recent report from the U.S National Home Price Index, home prices dropped for the fifth month in a row in November as potential buyers were scared off by rising mortgage rates, inflation, and fears of a potential recession.

In Nebraska, Redfin reports home prices were up 11.3% year-over-year in December of 2022. In addition to that, the amount of homes being sold fell 38.4% and the number of homes up for sale were up 16.3%.

Real Estate Solutions co-owner Russ Wilcox said the current housing market in Madison County is ‘tight’ because of the low inventory of products to build homes.

“We really need more houses,” Wilcox said. “More apartments. More places to live for people that are looking for residences. We just don’t have the kind of inventory we should.”

Wilcox said low inventory issues are being felt all across the northeast part of the state.

“There is simply just not enough to purchase.” Wilcox said. “We have buyers [but] there aren’t enough houses on the market to satisfy those buyers right now.”

A year ago, and even going back to some months during the Covid-19 pandemic, Wilcox called the overall housing market ‘a buyers frenzy."

The U.S government had put a lot of money into the economy resulting in large amounts of down payment money as well as Covid relief funds.

Wilcox said at that time “smart people put that [money] into down payments into homes.”

He used an analogy to describe how the market compared then to how it is currently.

“The market was really running at 95 mph on the interstate,” Wilcox said. “Everybody was speeding [and] it was out of control, really. Now, we’ve slowed down a bit as if we’ve got off on an off-ramp and now we’re going 55 on a state highway. It’s still moving but it’s moving slower than it was.”

Wilcox added the market has to ‘normalize back to historical market patterns.’

“Buyers now do have 30 days or 45 days to make a decision on a house rather than having to go in and have eight other buyers the same day and they have to make an offer that’s 20 percent above of listing price,” Wilcox said.

But Wilcox continued to emphasize ‘we need more houses to come on the market.’

With supply chain issues overseas and labor shortages still impacting businesses nationwide, the future of new homes and pre-existing homes within the market is unknown.

According to an article from North Carolina State University, lumber shortages began during the Covid-19 pandemic. With the shortage, prices of lumber skyrocketed as there was an unprecedented demand for housing during that time.

Nebraska is still feeling the effects as Wilcox has pointed out with not enough inventory.

"If you’re in the market to build a home from scratch or are currently doing so," Wilcox said ‘’I feel bad for these folks that are building homes or people who want to build homes’’ and said it’s ranging from $300 to $400 a square foot to build a home.

He added currently within the market, it’s difficult to build anything that falls in the affordable housing range.

Will things get better? It’s complicated. Wilcox said things like consistency in the market, new inventory, and getting inflation in check are all key for a better overall housing market in Nebraska.

Over the next year or 18 months, Wilcox estimates a more stable market will come into check.

“There’s nothing that points to significant downturns in market values,” Wilcox said. “All the basic economic factors are not there for that to happen.”