By Eileen Dallabrida
If you are looking for a house priced at $500,000 and up, you are firmly in the driver’s seat. And buyers who can afford a price tag of $1 million or more are in the fast lane, propelled by a glut of inventory and jitters about the economy.
In New Castle County, there are currently enough houses on the market in the $500,000-$1 million range to satisfy demand for 13 months, compared to a healthy inventory of three to four months.
“The difference is there are a lot more houses for sale in that price range, 20 percent more than last year,” said Carol Arnott Robbins, of Berkshire Hathaway HomeServices in Greenville. “And in the $1 million-plus range, the inventory is two and a half years.”
Based on sales to date of homes priced at $1 million plus, New Castle County real estate pros expect about 19 sales in 2016 in that category. In 2015, there were 75 sales of $1 million or more.
Much of buyer’s reluctance to sign on the dotted line is attributed to the ripple effect of the Dow-DuPont merger, which has already cost 1,700 workers in Delaware their jobs.
Still, Realtors report that prospective buyers don’t appear concerned about Brexit, Britain’s vote to exit the European Union, despite its short-term impact on the stock market.
The most expensive home in Delaware, as reported by Forbes
In theory, fat inventories at the high end should be an opportunity for move-up buyers—“but it all depends on how people feel about the security of their income,” Arnott Robbins said.
Currently, the hottest sector of the market is homes in the $150,000-$250,000 price range in Bear, Pike Creek, Middleton, Newark and in North Wilmington.
“We are seeing multiple offers in that price range,” she said. “They are going really fast.”
Interest rates remain favorable for buyers at all price points. Rates are currently 3.75 percent for a 30-year conventional mortgage, 3 percent for a 15-year loan. For jumbo mortgages, defined as loans of $417,000 or more, rates are 4 percent for 30 years and 3.25 for 15 years.
“Even buyers who have the cash to buy take a mortgage,” Arnott Robbins said. “They take that cash and put it to work someplace else.”
High-end buyers have long wish lists: beautifully updated kitchens, open floor plans, great entertaining spaces and hardwood floors, especially materials other than oak, such as Brazilian cherry and hickory. “A high-end kitchen without granite or quartz counter tops isn’t going anywhere,” she said.
In Sussex County, the market is awash with expensive beach properties.
“We have a tremendous inventory of $1 million-plus homes—and it’s still a buyer’s market,” George Thomasson of Gallo Realty in Lewes.
Both the first- and second-home markets are getting a small boost from buyers from D.C., Virginia, and New Jersey, followed by New York and Pennsylvania.
“People from New Jersey can get more house in Delaware because we don’t have the high property taxes that they have in New Jersey, as much as $50,000 a year for a high-end property, compared to $2,500 a year in Delaware.”
Many of those buyers are retirees, who are looking for new construction with all the bells and whistles, including spaces for outdoor entertaining with such amenities as fire pits and auxiliary kitchens.
“In downtown Lewes, an older home that is well maintained is a gem because buyers there are interested in history,” Thomasson said. “Otherwise, older homes sit on the market unless they have been renovated from top to bottom.”
