Now that the market has recovered, what’s happening with prices in Coastal Delaware?
As we always say –
“All Real Estate is Local”
so the answer depends on what type of property and community we are talking about.
The best way to answer this question is to look at what it is people want to buy and then see what’s happening with prices. A large percentage of Buyers in Coastal Delaware prefer new construction.
To illustrate, let’s take a look at Independence, the area’s leading 55+ Active Adult Community. Since January, Base Model prices have already increased by $25,000 and the forecast is for additional increases.
The CoreLogic Case-Shiller Indexes estimate that home prices increased by 7.3 percent in 2012, the strongest rate of appreciation in nearly seven years. The analysis also projected that the trend of rising home prices will continue in 2013 and beyond. In the five-year period from the fourth quarter of 2012 to the fourth quarter of 2017, home prices are expected to rise at an annualized rate of 3.9 percent. Read the Full Article
During the recession, prices were held down despite increases in material costs and lot premiums were often discounted or waived. Now that the market is strong and the builders cannot keep up with demand, the developers want to make some profit as well.
Lot premiums go to the Developer
Unless you are in the real estate business, you might think that the builder and the developer are one and the same. Typically, they are two different businesses and the developer makes his money on the lots. So, when you purchase a new home and go to settlement, the builder gets paid on the house and the developer makes money on the lot. The most desirable lots carry a premium price just like the upgraded kitchen is an option from the builder.
In Coastal Delaware, the transition from Buyers Market through normal to a Sellers Market is happening very quickly.