How Nebraska’s Wealthiest Households Are Shaping the Housing Market

Nebraska’s housing market includes a small but influential segment of very high-income households – those earning $500,000 or more per year. This income level is exceedingly rare in the state, roughly corresponding to the top one percent of earners. The median Nebraska household income is around $75,000, so a $500k earner makes seven times what a typical family earns.

While only a few thousand Nebraska households earn this much annually, they have an outsized impact on the real estate market. Almost all households at this income level are homeowners, and many own multiple properties.

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Luxury Market Growth in Nebraska

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One of the clearest stories in 2018–2023 has been the surge in luxury home sales and prices in Nebraska. High-income buyers played a major role in this boom.

Record-Breaking Sales

In the Omaha metro – Nebraska’s largest market – expensive home sales became far more common than before. At least two home sales in Omaha topped $3.5 million in the past five years.

In Lincoln, 2022 was “a banner year” for high-end sales, with four homes selling for $1.9 million or more – an unprecedented figure for the Capital City. There was even buzz about luxury condos, with at least three downtown Lincoln condos sold for over $1 million each around 2022.

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, Nebraska’s median home price surpassed $200,000 for the first time.

Nationally, nearly one in ten homes (8.5%) were worth $1 million+ by 2024 – more than double the ~4% share before the pandemic – reflecting how much the luxury segment expanded across the country.

New Construction Price Records

High-income buyers often prefer new construction, and the cost of new homes in Nebraska soared. By early 2023, the average sale price of a newly built home in the Omaha area hit the half-million-dollar mark.

The average price for new construction in Omaha was about $455,000 in 2022, up from roughly $366,000 in 2021. 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 2020–2021. Historically low mortgage rates (sub-3% in 2020/21) and stock market gains gave wealthy buyers exceptional purchasing power.

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. By 2023, demand from affluent purchasers was still strong enough that prices stayed elevated, with luxury home prices up about 8.8% year-over-year.

What Drove the Luxury Market Surge?

In short, strong demand met limited supply. Several key factors contributed:

Income Growth and Wealth Creation

Nebraska’s economy delivered solid growth, and many high earners saw their incomes and assets rise. The Kansas City Fed noted “sharp increases in household incomes” during the pandemic years, which helped support housing demand even as prices climbed.

Low Interest Rates (Through 2021)

Borrowing costs were extraordinarily low in the late 2010s and reached historic lows in 2020–21. Wealthy buyers could finance expensive homes at 3%–4% interest, making it surprisingly cheap to upgrade to a bigger or pricier property.

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.

Limited Supply of High-End Homes

Even as demand surged, the supply of homes for sale in Nebraska remained tight, especially at the upper end. New construction lagged behind household growth for years, and labor/material shortages in the pandemic further constrained how many new luxury homes were built.

Property Types: What the Wealthy Are Buying

Luxury Single-Family Homes Dominate

The vast majority of primary home purchases by $500K+ earners were single-family houses – often large ones. In Omaha, affluent buyers flocked to neighborhoods known for upscale houses such as Regency, Linden Estates, and Skyline.

These homes typically feature 4,000+ square feet, custom architecture, high-end finishes, and amenities like three+ car garages, home theaters, and swimming pools. Many are “luxury mansions” in the local context, though priced far below what a similar home would cost on the coasts.

Rural Estates and Acreages

A notable subset of wealthy buyers opt for rural luxury estates – properties outside city limits that come with significant land. During 2018–2023, some of Nebraska’s $500K+ earners purchased hobby farms, ranches, or acreages not for farming income but for the lifestyle and privacy.

In Nebraska, lakefront homes could also fall in this category – for instance, upscale homes around recreational lakes (like the Platte River “sandpit” lakes near Waterloo/Valley, or Lake McConaughy in western Nebraska).

High-End Condos Are Rare (But Exist)

Unlike places like New York or Chicago, Nebraska isn’t known for a big luxury condo market. Affluent Nebraskans generally prefer a house with land over a penthouse unit.

That said, there were a few notable condo purchases in 2018–2023. Overall, <5% of luxury purchases by $500K+ earners were condos; the other ~95%+ were houses. Nebraska’s wealthy clearly show a preference for space and privacy over urban high-rise living.

Custom-Built Homes

Many high-income buyers in this bracket opt to build their own custom home rather than buy an existing one. Custom builds were popular throughout 2018–2023, as wealthy families worked with builders to design homes to their exact tastes.

By 2022–23, building new had become very expensive, but for $500K+ earners, the ability to create a dream home from scratch was worth the price.

Upsizing Trend Dominates

One might assume that at some point rich homeowners would begin downsizing. And indeed, some eventually do. But during 2018–2023, “downsizing” was the exception, not the rule, among Nebraska’s $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.

Reluctance to Sell & Tax Considerations

Another reason downsizing has been limited is that many long-time owners were reluctant to sell their primary residences. Under U.S. tax law, a married couple can exclude up to $500,000 of capital gains from the sale of a primary home. But with home values skyrocketing, gains often exceeded this limit, meaning a hefty tax bill if they sold.

When Downsizing Does Occur

Typically, only when affluent owners reach an advanced age or a major life change do they sell the big house. Some $500K+ earners in their 60s or 70s have begun opting for luxury condos or smaller homes, but these cases were relatively few from 2018–2023.

Where Nebraska’s Wealthy Are Buying

Omaha Metro: The Epicenter of Luxury

The Omaha metropolitan area is by far the primary market for $500K+ earners’ home purchases. During 2018–2023, Omaha’s western suburbs continued to be magnets for affluent buyers. Areas like West Omaha, Elkhorn, and Bennington saw extensive development of high-end subdivisions.

Sarpy County (just south of Omaha, including towns like Papillion, La Vista, and Gretna) emerged as one of the fastest-growing areas, with many new upscale homes.

The Allure of Space (Suburban & Exurban)

Within the Omaha area, suburbs and exurbs reigned supreme for wealthy buyers. 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 2020–2021, 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.

Urban Luxury Pockets

While suburban areas attracted most high-end buyers, a few urban pockets in Omaha did see interest from the wealthy. The Dundee/Memorial Park area and Country Club district in central Omaha continued to appeal to some affluent buyers who appreciate their charm and central location.

All told, fewer than 5% of Omaha-area $500K+ earners bought homes in the downtown/urban core. The “suburban dominance” held true: wealthy buyers largely bypassed downtown Omaha’s limited high-end condos in favor of suburban or fringe locations.

Lincoln and Lancaster County

Lincoln, the state capital and second-largest city, also saw significant high-income homebuying. Popular luxury neighborhoods in Lincoln during 2018–2023 included The Ridge (where Scott Frost’s mansion was) and Firethorn (a golf-course community).

By 2022, Lincoln achieved all-time-high prices. High earners in Lincoln often bought in the south and east parts of the city, or on acreage just outside city limits in Lancaster County.

Motivations Behind Wealthy Homebuyers’ Decisions

Lifestyle Enhancement

Many affluent buyers sought to upgrade their living situation – not just in size, but in overall comfort and lifestyle. With more disposable income and time spent at home, high earners invested in real estate to improve quality of life.

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.

Remote work also played a role: a handful of native Nebraskans with high-paying coastal jobs returned home in 2020–21, buying nice houses in Nebraska while telecommuting.

Investment and Financial Strategy

During this period of rising home values, buying property was seen as a relatively safe bet. Some $500K+ earners explicitly bought homes as investments – for example, purchasing a second house or a rental property in addition to their primary home.

An NAR study found high-income homeowners accounted for 71% of the increase in total housing wealth from 2010 to 2020 – indicating how much value they’ve gained from real estate.

Emotional and Family Factors

Many motivations were personal or family-oriented. Examples include: wanting to be in a particular school district; desiring to be close to family; or simply achieving a long-held personal goal.

Multiple Properties: Second Homes and Investments

A distinctive aspect of high-income households is that many own more than one home. 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.

Rental Investments and Land Ownership

Beyond just a second home for personal use, some affluent Nebraskans invested in rental properties or land during 2018–2023. With low interest rates, even luxury rentals became an attractive investment.

Comparison: 2018–2023 vs. 2008–2017

Market Conditions: Bust to Boom

The 2008–2011 period was marked by the housing crash and Great Recession. Even though Nebraska did not have a housing collapse as severe as some states, the luxury market was very subdued in those years.

By contrast, 2018–2023 was mostly a boom time. The difference is stark: around 2010, million-dollar sales were a rarity. Fast forward to 2021, and Omaha and Lincoln each saw dozens of such sales, with new price records set.

Growth in Number of High-Income Households

Part of the reason for more luxury buying is simply there are more $500K+ earners now than a decade ago. The top 1% income threshold for Nebraska rose from the mid-$400Ks in the early 2010s to about $558K by 2022, indicating more people reached that range.

Interest Rates and Financing

The prior decade (’08–’17) saw interest rates mostly in the 3.5–5% range. But the ultra-low rates of 2020–2021 (below 3%) were unprecedented, and they supercharged the buying capacity for the wealthy.

The ’18–’23 period had a wild ride: starting ~4.5% in 2018, dropping to ~2.7% by late 2020, then spiking to ~7% by 2022. This whipsaw had a big influence on timing – many high earners rushed to buy or refinance in 2020–21 to lock in cheap money.

Market Volume and Price Levels

Comparing volume, far more dollars and homes traded in 2018–2023 at the high end than in the prior decade. Prices at the luxury tier also broke through ceilings that previously held.

To quantify: The total number of Nebraska homes sold for $1M+ in all of 2010 might have been on the order of a dozen or two. In 2021 alone, that figure was likely in the hundreds. This marks a fundamental expansion of the luxury housing market in Nebraska.

Conclusion

Nebraska households earning $500,000+ have played an increasingly prominent role in the state’s housing story from 2018 through 2023. They took advantage of economic tailwinds to buy larger and more expensive homes, often in the suburbs of Omaha and Lincoln, fueling a boom in luxury real estate.

Their experience stands in contrast to many average buyers – the wealthy largely achieved their housing aspirations in this period, while others struggled with affordability. These high-end trends also reflect broader shifts since the late 2000s, highlighting how the housing market for the affluent has evolved from post-recession caution to post-pandemic exuberance.

As of now, Nebraska’s most well-heeled households are firmly entrenched in some of the finest homes the Cornhusker State has ever seen.