Issues with “affordable housing” in Sussex county will be addressed at the annual Sussex County Today and Tomorrow Conference, Wednesday October 31st at the Delaware Technical & Community College.
Read the rest of this entry »
As in most parts of the country, the Delaware housing market has slowed down substantially in the last year, according to local realtors, but that doesn’t mean it’s going to stay that way.
Read the rest of this entry »
Thanks in large part to the actions taken by the country’s largest banks, Wall Street sailed into smoother waters last week following days of turbulence in the credit markets that sent investors flailing for solid ground.
Read the rest of this entry »
Delaware mortgage defaults are soaring toward record highs and are likely to keep increasing into 2008, state banking officials say.
Read the rest of this entry »
The Wilmington (Del.) News-Journal opines that if you live in the nation’s second-smallest state, chances are that you may know someone who has or will soon lose their home to foreclosure.
Foreclosure filings in Delaware for 2006 increased by 36 percent over the previous year in Delaware. Nationwide, foreclosures jumped by 42 percent, the research firm RealtyTrac notes.
Several factors are responsible, but the most troubling is the ignorance of home buyers about the risks involved in home loan programs that are “too good to be true.”
Until the end of the housing boom early last year, too many Delawareans were enticed by adjustable-rate loans that can lead to higher mortgage rates - which means higher monthly payments - without notice.
Across the U.S., interest-only mortgage programs also have been a lure for those who believe they can save more money now by paying only the interest on the mortgage and make a scheduled balloon payment later.
The current housing decline has flattened many prices, so some troubled sellers no longer are thinking about making a sizable profit.
For those who want to hold on to their lifelong dream of home ownership, mortgage refinancing is more troublesome. The repayment penalties on ARMs don’t make this an option.
And the subprime [or bad credit home loan] lenders, who made a killing with mortgage refinancing programs over the past five years for buyers with poor credit, are losing their backing from investors who are disenchanted with the rapid rate of foreclosures.
These get-a-house-quick programs have done quite a smear job on the stability of longer-term 30- and 15-year mortgages that offer, for most people, the best chances of being able to maintain a savings account through economic highs and lows.
Thankfully, consumer advocates like the Delaware Community Reinvestment Action Council (DCRAC), are ramping up their public presence to warn and assist current and prospective mortgage applicants with marginal credit.
Just the same, at some point that gut instinct that a 1 percent interest rate on a $500,000 Delaware mortgage is too good to be true needs to be heeded. Be smart.
SOURCE: The News-Journal
The building boom in Delaware came to a grinding halt as 2006 closed, but many officials see the slow down as part of a cycle, reflecting national patterns, the Milford Chronicle reports.
According to data released by city planner Gary Norris, there were no permits issued in November for new single-family residences, and only 17 permits issued from July-November 2006. Yet the city issued 270 permits for the entire year, reported city manager Richard D. Carmean.
“We took a nosedive in April,” Carmean said.
If houses aren’t being built and sold, the city is not taking in funds from the transfer of ownership fee at the time of sale as well as money from city-issued permits.
“It is down substantially, even with sales of existing homes,” he said. “The market is not driven right now. We’re waiting for the market to pick up, but it’s not limited to just Milford.”
The city planner believes that with Delaware mortgage rates remaining low, many of the major residential projects that got the city’s preliminary site plan approvals are still in the works, giving developers an opportunity to take their time getting go through the design and engineering processes.
After the city gives the go-ahead for the concept, a real estate developer must create a design that passes the scrutiny of the state fire marshal’s office, the Department of Transportation and the conservation office.
Then, before the project is officially under way, developers must get final approval in public meetings from the planning commission.
“Either developers are playing it close to the vest or there’s a downtown in the [Delaware housing market],” Carmean said.
Citing newly released U.S. Census Bureau numbers, he says people are still choosing Delaware as a relocation destination.
“From July 2005 to ‘06, more than 11,000 people moved here. That’s a 1.5 percent increase. People still find Delaware attractive,” he said. “Compared to other states in the region, Maryland, New Jersey, Pennsylvania and Virginia, Delaware had the highest percentage of increase.”
In large portions of the above states, mortgage loans are markedly pricier than in Delaware. And while nobody’s starting actual construction on new homes, the interest in Milford has not lagged.
“I think developers are land banking. I’m still talking to developers. Somebody is always interested in Milford. It’s just a respite in the growth,” Carmean said.
He believes home builders must reconsider the type of product they offer.
“The new buzzword is affordable housing, and to achieve affordable housing, they would have to build smaller houses. Now they are pricing many people out of the housing market. Maybe developers will have to go back to starter houses. The industry is retrenching, rethinking,” he added.
“They are not selling property in Pennsylvania, New Jersey and New York right now, so they are not buying homes, or second homes. Truthfully, I anticipate it will start again. It’s good to get a breather in the workloads.”
If you look around the Delaware real estate market these days, you’ll see two words rarely observed in the past few years: “price reduced.”
It’s something home buyers have been longing to see, and a sign that the financial pendulum has swung in their direction.
Charles Martin, President of the Kent County Association of Realtors (KCAR), said there are more homes to choose from and better prices than in recent years, making it an ideal time for house hunting.
“What’s happening now is the market has returned to normal after three years of being very heated,” he said.
From 2003-2005, it was a seller’s market in Delaware, with owners getting top dollar and buyers struggling to find affordable housing.
Martin said homeowners watched their property values appreciate about 10 percent per year during that period, instead of the typical 3 percent.
Ruth Briggs-King, executive vice president of the Sussex County Association of Realtors, described the home mortgage market from 2002-2005 as atypical, driven by low interest rates, a good economy and increased housing demand.
A lot of out-of-state homeowners with considerable equity were moving to Delaware, prepared to spend big bucks on homes they considered bargains.
With so much demand, area homeowners had little difficulty selling their homes quickly, and for lofty asking prices. But experts believed it was only a matter of time before the real estate bubble burst.
“It was an anomaly and it couldn’t be sustained. It would’ve priced too many people out of the market,” Briggs-King said.
As expected, the housing market cooled this year. There are more choices for buyers now because builders have exceeded demand. As a result, look for less development in the coming years and fewer out-of-state buyers coming to Delaware.
“The New Jersey and Pennsylvania real estate market are not as healthy, and they do have an impact on our market,” Martin said.
With less competition from out-of-state buyers and more available homes, and Delaware home loan rates still at relative lows, experts agree things are finally looking up for local home buyers.
“There’s more opportunity to pick and choose. This is a terrific time to be in the market as a buyer,” Martin said.
So if it’s a good time to buy, does that necessarily mean it’s a bad time to sell a home? Not according to Martin, who stressed that property values are still appreciating, just not at the levels they were in 2003, 2004 and 2005.
Rather than double-digit growth, you are probably looking at 3-5 percent annually, which is modest but good over the long haul.
The median house price in Sussex County dropped from $288,750 last year to $275,000 this year, but the list/sell ratio has remained at 97 percent.
However, homes are staying on the market longer as there are more choices for buyers and they have time to look around and compare options.
“Sellers are beginning to realize that they’re not going to get premium price for their property, but more realistic values,” Martin said.
He said homes that are worth less than $200,000 are selling best in today’s market, because there are plenty of home buyers and not as many properties.
But in the $200,000-plus range, there are so many options that it’s driving prices down. Just how slow the market will get is uncertain. The housing market hinges on such things as employment and wage rates, and the First State is looking strong in both categories. Overall, experts feel property values will see appreciation of 3-4 percent annually through 2010.