Home prices have been rising since the end of the big recession. In Delaware, we were building and opening Active Adults Realty during the worst of that market, but every year since has been better for both buyers and sellers.
But in 2021, demand is outstripping supply, and some headlines are asking, “Are we in a bubble”? Prices are still increasing, but that is true in many markets. Were homes more affordable ten years ago? Yes, but they are less expensive today than they were 2005 – 2008.
Can you sell for more if you wait a year?
That’s where Claire, my crystal ball, remember her, urges caution. She says not to be greedy; nothing lasts forever, and the market could change as new construction catches up. Right now, existing homes have an advantage they seldom do; you can compete with new construction because of material shortages caused by the pandemic and overall demand.
If you can sell today at a higher price and have enough equity to apply to your new home, finance the rest at a low rate. In effect, you are trading your equity and moving to your location of choice.
Is Housing even Affordable?
Can I afford to buy a house in Coastal Delaware? Compared to what? Northern NJ? The hills of Tennessee? What size home?
Let’s remember that there’s a difference between housing affordability and affordable housing—two different things. There are some areas where there’s no affordable housing, but that’s a separate issue from overall housing affordability in this country.
How do we measure housing affordability?
Affordable housing is generally defined as housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities. Reference: www.hud.gov.
But it can also be defined as housing designed, built, and sold according to some index. It may be subsidized, but not necessarily.
What if you can’t afford to purchase in Delaware at these prices?
Our best advice is to list your current house for sale now and place the proceeds into the bank.
- Move to Delaware and rent for a year. Then, we’ll work on finding the right home at the right price. (It would have been nice if you bought a year ago and had it as a second home these past months, even though not retiring for two years. Tricky.)
- Rent where you live for now and continue to work with us to find a home in Delaware.
Keep your eyes on the prize. Contact us and make smart decisions with the assistance of your trusted real estate professional.