Delaware Public Media

First State housing market showing signs of improvement

May 22, 2015

On the real estate front, home sales are leaping with spring energy, although prices still have a long way to go to reach the levels before the housing downturn.

In New Castle County, active listings are up 11 percent compared to the same period a year ago. In April, 1,490 homes went to settlement, an increase of 16 percent over that month in 2014.

“Overall, this is the best we have seen since 2007,” says Tucker Robbins of Berkshire Hathaway Home Services Fox & Roach Realtors in Greenville.

The tide also is rising at the beach, where the Sussex County Association of Realtors reported $1.45 billion in residential sales in 2014. That’s an 8- percent increase over the previous year. Fred Dean, SCAOR president, attributes the improvement to a rebound in the second-home market.

And after years in the doldrums, there’s activity in new home building. Developers plan to begin construction this summer at Boyds Corner Farms, a mixed-use development of commercial property and 116 homes at the confluence of Route 13 and 896. A neighboring development, Baker Farms, is in the review process and could get underway as early as 2016. A total of 143 homes are planned for that site.

Despite gains, the typical home in the region has recouped only 5 percent of the 23 percent it lost in value during the housing bust in 2007, according to a Berkshire survey by Kevin Gillen, chief economist of Meyers Research and senior fellow at the Lindy Institute for Urban Innovation at Drexel University in Philadelphia.

The economist crunched the numbers in 10 counties: Bucks, Chester, Delaware, and Montgomery Counties in Pennsylvania; Burlington, Camden, Gloucester, Mercer, and Salem Counties in New Jersey; and New Castle County, Delaware.

While more homes are changing hands, prices are still getting dinged in foreclosure hot spots such as Middletown. In the first quarter of 2015, sales of properties in the 19709 zip code increased a robust 44 percent. But prices declined 10.7 percent year over year.

On the upside, sales volume in the tony Greenville zip code of 19807 is up 54 percent. Prices have improved slightly, increasing 1.6 percent to a median of $635,000. Robbins also points to good news for sellers in the 19803 zip code in Brandywine Hundred, where there has been a 52-percent increase in sales; the median price of $313,750 is 10.6 percent higher than last year.

“One of the interesting things we are seeing is that more properties in the City of Wilmington are moving, although it still isn’t as strong we would like it to be,” he says.

Buyers remain particular regarding condition, with move-in properties having a decided edge over fixer-uppers.

“The homes that sell quickly are fixed up very nicely. Kitchen renovated, master bathrooms that are wonderful, upgraded flooring,” Robbins says. “Buyers appreciate homes that are over improved.”

Buyers turn up their noses at overgrown landscaping, clutter and unpleasant smells.

“It is harder and harder to sell a smoker’s house,” he says. “Sellers who have homes with pet odors really get hammered on price.”

After years of sitting on the sidelines, more prospective buyers are feeling confident about making a move, says Andrew Bryan, who leads the Bryan Group, a statewide REMAX agency based in Dover.

“Activity is brisk, a lot of properties are moving, although prices aren’t going up at the same rate,” he says.

That is especially true in New Castle and Kent counties, where short sales and bank-owned properties continue to impact prices.

“When you are looking at price reductions of tens of thousands of dollars, it is very difficult to complete with those houses,” he says. “On the bright side, we are seeing strength in specific price ranges.”

In Kent County, demand is strong for single-family homes priced $225,000-$325,000. In New Castle County, Bryan is seeing resilience in the $450,000-$550,000 range. There’s significant action in the resort areas of coastal Sussex County, “although it’s very difficult to find anything for less than $500,000.”

A few recent representative listings from Realtor.com:

  • In New Castle County, a two-story colonial-style house in the Brandywine Hundred development of Edenridge features hardwood floors, an upscale, updated kitchen, new windows and bathrooms, including a master bath with a whirlpool tub. The listing price: $525,000.
  • In Kent County, a four-bedroom, two-and-a-half bath home in Hunters Point in suburban Dover offers a .75-acre lot, chef’s kitchen, master bedroom with walk-in closet and a loft office. The price tag: $259,900.
  • In Sussex County, a two-bedroom, one-bath third-floor condo in Snug Harbor in the North Shores section of Rehoboth Beach offers views of the canal and wetlands, as well as access to a tennis court and pool. It’s listed for $650,000.

Although mortgage lender’s standards remain high, Bryan notes that there are more government-backed programs for buyers, including those that offer 100-percent financing. The Delaware State Housing Authority has expanded its programs, offering help to subsequent buyers in addition to its longtime incentives for first-time buyers.

That is translating to more homes going to settlement, according to statistics from TREND MLS, which gathers data in New Castle and Kent counties, as well as Pennsylvania and New Jersey. TREND does not track Sussex County.

In New Castle County, settlements rose 15.8 percent in the first quarter, compared to the same time a year ago, TREND reports. The median sales price was $204,900, a 7.9 percent improvement.

In Kent County, closing on home sales were up 13.8 percent for the period. Prices also improved, although the gains were not as robust. The median home price was $190,000, up 2.2 percent.

In Sussex County, prices for single-family homes rose 5 percent in 2014, with a three-bedroom unit selling for a median price of $366,157, according to SCAOR.

Sales were strongest in the eastern part of the county, closest to the coast. That mirrors a nationwide uptick in sales of second homes. The National Association of Realtors’ Investment and Vacation Home Buyer’s Survey reports sales of 1.13 million second homes in 2014, the highest volume since the NAR started tracking that segment of the market in 2003.

HELP FOR HOMEBUYERS:

A number of programs are helping to make ownership more accessible for prospective home buyers:

  • The Delaware State Housing Authority offers financing for first mortgages at below-market interest rates to qualified Delaware buyers. The Welcome Home program offers mortgages for first-time homebuyers; the Home Again program is for repeat buyers. Buyers who need help with down payments or closing costs can apply for Second Mortgage Assistance Loan (SMAL) or Advantage 4. The maximum loan amount is $417,000. www.destatehousing.com
  • The Vacant Homebuyers Assistance program in New Castle County offers incentives for buyers to occupy homes that have been empty for 90 days or more in areas of Bear, Claymont, Edgemoor and Glasgow. Properties in the City of Wilmington are not eligible. Buyers can borrow up to $8,000 in down payment and closing costs at zero interest. Home prices cannot exceed $335,400 and income cannot be more than 120 percent of the median household income for the county, or $66,200 for an individual. For details go to http://www.nccde.org/DocumentCenter/Home/View/7873 or call (302) 395-5618.
  • The United States Department of Agriculture offers USDA Rural Development loans to low-income homebuyers in areas with fewer than 20,000 residents. In Delaware, that excludes most of New Castle County and greater Dover. For qualified buyers, there’s no money down and fixed interest rates as low as 1 percent for both new and existing properties. Instead of sticking strictly to credit scores, the program evaluates a buyer’s overall credit history to determine how likely the buyer is to make payments. (302) 857-3580. www.rd.usda.gov.