The gloomy outlook will pass, sooner rather than later! 

During a national and regional housing update held in November, it was stated that Sussex County home sales are slow, but there is plenty to be optimistic about in the near future. Statistics point to a cyclical bottoming out of the housing market, predicted to reach its lowest point within the next three months, unlike some areas of the country, Sussex County seems likely to bounce back quickly. The major message is that consumer confidence right now is very low, and that typically marks the bottom of the market… when things begin to change.

Home sales are ugly, but people should realize when it gets this bad, it’s good.

Delaware reached their peak home sales in 2004 and 2005. A classic speculative bubble formed, resulting in a huge surplus of new and existing homes despite a high demand in the area. Back in 2004 and 2005 a lot of people got involved in real estate and everyone was making money, but the problems implanted in the speculative boom came to an end, led to the mortgage meltdown and ultimately resulted in a huge drop in consumer confidence.           

Decreased sales have led many national building companies to move out of Sussex County, so the number of available houses is now starting to stabilize, although home values on average might still be slightly dropping a closer look at the statistics paints a more positive picture.

First the inflation-adjusted data shows that home values are still higher than they were in the early 2000’s, a time when the housing market was healthy and bustling. While the data shows that a large drop had occurred in home values since 2005, that number is skewed as a result of foreclosure sales and inventory of median-priced homes not yet sold.

Even more telling, people are devoting a smaller amount of their total income to pay off there mortgages than they have for decades. Nestled at about 29 percent of household income, the number has not been that low since the mid-1970s.

Nationwide, the housing market is less certain to rebound quickly, but increased activity in Sussex County is a good bet. The coastal areas and some inland venues have historically been attractive to retirees from New Jersey, Pennsylvania, Maryland and New York; even retirees from Florida are discovering that Sussex County Delaware is one of the best places for retirees. Right now Sussex County accounts for half of the new homes built in Delaware. Once the flow of people moving from neighboring states builds up again-and they will- that will be the trigger for a new level of growth.

Looking at past results, a comeback for the housing market could occur at a much faster rate than in the past for most of the country, but for Delaware we’re already seeing the signs of a comeback.