Delaware’s residential real estate market is showing continued strength as the winter doldrums approach, posting solid increases in sales and prices in all three counties for the month of November.
Real estate officials say market-ready homes are selling quickly, buyers are gaining some confidence, and the increasing reliability of low interest rates continues to sustain an energy that has been fairly consistent through the year.
Statistics indicate a broad-based upturn in many respects. Compared to the same period of 2011, total homes sold in November were up 8.6 percent in New Castle County; 15.4 percent in Kent; and 28.7 percent in Sussex.
Prices also were up across the board, rising 11.7 percent in New Castle; 9 percent in Kent; and 7.7 percent in Sussex, according to the Realtors groups.
“I think people are feeling more positive. You can’t beat the interest rates,” Dean said.
At the same time, local Realtors are viewing the gains with some caution, worried that the momentum is being hindered – and could become endangered – by potentially disquieting developments.
In Congress, there’s talk of tax increases and the impending fiscal cliff; in the housing market, the specter of a “shadow inventory” of bank-owned homes hangs over all.
Other uncertainties also dampen optimism, including the state’s mandatory foreclosure mediation policy, which requires lenders and homeowners at risk of foreclosure to go through mediation before the lender can move on the house.
Prices appear to being driven up in part by declining inventories, Realtors said. In Sussex, residential inventory is 3,676 units, far below the highs of 5,400 experiences since the recession, Dean said.
The price appreciation cited by Realtors run counter to other recent data that questioned the soundness of prices in Delaware.
The real estate data firm CoreLogic earlier this month said Delaware has been seeing a steady rise in the number of homes sold and a steady decline in the available inventory. But the firm said the upward pressure on prices that typically results from increasing sales and falling supply has not yet happened.
In October, Delaware and Illinois saw the most depreciation in the nation, the CoreLogic report said. Including “distressed” sales – those that involve a foreclosure or bank ownership – Delaware’s prices were down 2.7 percent compared with October 2011. Excluding distressed sales, just three states saw depreciation – among them was Delaware, with a 2.1 percent drop.
That report conflicted with a recent analysis by the Federal Housing Finance Agency. It found that the average sales price in Delaware rose 5.8 percent between the second and third quarters of this year. By comparison, Pennsylvania saw a 0.3 percent increase, and New Jersey had a decline of 0.6 percent.
Other signs continue to point to a housing recovery.
The most recent index measuring the number of Americans who signed contracts to buy homes jumped to the highest level in almost six years. That suggests sales of previously occupied homes will rise in the coming months.
Builders are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years last month. And builders broke ground on new homes and apartments at the fastest pace in more than four years in October.
