Every year at this time, we look back to analyze “The Year in Review” and look forward to forecast where the market is going.
As Active Adults Realty celebrates our 10th year, memories of the market crash have subsided—somewhat. We survived 2008, 2009, 2010, and started this brokerage with a firm belief the market would improve. But when did recovery actually begin and how long will it last? I always have to remind people that:
- All real estate is local, and
- Delaware is a small state that seldom makes the National News
These two facts make understanding our market difficult for anyone looking at it from the outside.
So, I went back and examined our growth over the past 10 years and the Delaware market overall. We began to see improvement in 2010/11. Delaware had shown up on the radar of Baby Boomers throughout the Mid-Atlantic and we saw a serious uptick in new inquiries and initial visits by people planning ahead for their retirement and possible relocation. They came, they liked what they saw, and they began the process. But then, they tried to sell their family homes elsewhere in the Mid-Atlantic and Northeastern States and their plans stalled.
By 2012, the tide had turned, and the Delaware real estate market for our clients—Baby Boomers—was strong. In fact, our numbers in 2012 more than doubled 2011 and then doubled again in 2013! But then, the overall real estate market caught up and even homes in the high tax surrounding states like New Jersey, New York, and Connecticut were selling. Pent-up demand caused our market to surge and our numbers jumped 42% in 2014 and another 38% in 2015. Since 2016 we have settled back in at 20-25% year-over-year growth.
Prices continue to rise and inventory remains low
These are the headlines you see in the national news. This is also true in Delaware, but we do appear to have more new construction than in some markets. There is still land in desirable locations, especially in Southern Delaware and in the Middletown area in Northern Delaware.
What about 2020?
2019 was another excellent year and based on our current hard forecast, we see another very strong year in 2020. We begin the year with more executed buyer contracts than in any previous year. Our clients, typically in their 60s or early 70s, are feeling confident and moving forward with the purchase of their dream retirement homes. At least 50% of our buyers purchase new construction, and, in Delaware, supply is holding up. The biggest weakness is in the lower price ranges. For those in the $250–300K price range, inventory is limited, but as the target price increases, so does inventory.
We are fortunate in Delaware to have some good builders at different price points. Not all, but there are builders with whom we have had a good experience and not just the most expensive ones or those that spend the most on advertising.