Residential real estate is perking up in Delaware, although a high foreclosure rate will continue to be a drag on the market.Delaware showed gains in the monthly CoreLogic rankings in home price appreciation, coming in with 5.2 percent growth for the year in a November-to-November comparison. Earlier in the year, the home appreciation rate in Delaware had been among the lowest among the 50 states.
The growth rate was well below more rapidly recovering states like Nevada., which saw a 25 percent gain.
However, Delaware did not see the plunge in housing prices that hit Nevada. Prices in that state are still down 40 percent from their peak. By contrast, Delaware home prices are only 14 percent below their peak in 2007. In a separate measurement, TREND, the multiple listing service for New Castle and Kent counties, reported the December median sales price of a home in New Castle County was $197,00, compared to $185,000 during the same month a year ago.
In Kent County, the median price in December was $170,000 compared to $172,000 in December 2012. Total home sales were up modestly in both counties.
The Kent County economy is believed to be weaker than its New Castle counterpart, in part due to the lack of hiring in state government and federal cuts that led to furlough days.
Figures from Berkshire Hathaway HomeServices Gallo Realty, Lewes, showed the median sales price of homes was up by 8 percent for the year as of the end of November.
That appeared to be a more robust performance than in Kent and New Castle counties.
How home prices perform will be influenced by foreclosures in the state. While Delaware remained below the national average during the recession, its foreclosure rate has remained stubbornly high during the recovery.
RealtyTrac confirmed that the November foreclosure rate in the state was second highest in the nation, trailing only Florida.
During 2013, the Delaware economy remained on the sluggish side, based on home prices and other factors. In recent months, however, the jobless rate dropped to 6.5% as of November. A report from Arizona State University indicated that Delaware remained in the top tier among states.
Neighboring Maryland ranks third. RealtyTrac compiles foreclosure figures and offers listings and other information on foreclosed properties.
The high rate of foreclosures typically indicate a weaker economy and the influence of the subprime loans that allowed many with poor credit to buy homes and walk away. Some of the loans did not require any documentation of income and came to be known as “liar’s loans.”
