Is this making it more difficult for locals as they need to purchase new homes?
In 2003 when I was a new REALTOR in Coastal Delaware, I was told, “List in September, it will sell in April; list in February, it will sell in April!”
Even earlier, in the 80s and 90s, I discovered Coastal Delaware as a vacation spot, a weekend getaway for those of us who lived and worked in the DC Metropolitan Area. The Friday stream of traffic over the Bay Bridge and back on Sunday was memorable. One grocery store, The Food Lion on Coastal Highway, one liquor store, Atlantic Liquors, located around the corner from its current location in the small building where Barstools Plus lived until recently. Some friends bought second homes. Smart ones bought investment properties. If I had purchased a condo when Spring Lake first hit the market, for example, and sold it today, my profit would be substantial. The point is that out-of-state buyers have always played a significant role in the Coastal Delaware real estate market.
Baby Boomers and retirement
Then the 78 million Baby Boomers became a factor and Delaware started popping up on the Best Places to Retire and the Most Tax-Friendly States for retirees lists. Kiplinger’s regularly touts the benefits of Delaware to its readers.
Where do a large percentage of them live? In the Mid-Atlantic and the Northeast. As they plan to retire and relocate, what is the crucial factor? Location, close enough to visit family and friends by car.
But the question is, are out-of-state buyers driving up prices? The facts say no. While demand is a factor, supply determines prices. When there is more demand than supply, prices increase.
Lumber, windows, doors and so many other items that go into new home construction are on backorder, and prices of all materials are going up due to a lack of supply.
When will new construction recover and add to inventory? That depends on developable land, lots ready to build, and the type of housing. For example, we have a few lovely smaller communities priced in the high $200s or $300s, and homes sell quickly when listed. No builders will be building comparable homes in that price range; it is not feasible or profitable, at least not in Delaware. At higher price points, more supply will have a more significant impact.
New construction buzz
- New communities now selling are priced according to the current environment.
- Some builders will not even commit to a final total price until the home is in drywall and firm costs are known.
- Base prices are going up weekly in existing communities
- Delivery of new homes under construction is slipping
The team at Active Adults Realty is engaged in this market daily on your behalf. Let’s connect so we can learn more about how we can be of help to you.