The Delaware housing market is seeing some major shifts this week. Hence, let’s break down everything you need to know about it. Without further ado, let's jump right into it.  

Multiple Offers are Back in New Castle County

In Delaware, the market for buyers and sellers is going through another ebb and flow. In particular, the housing market in New Castle County has been crazy for the last two weeks, but prices are still fair.

Sellers in New Castle are once again receiving multiple offers from various buyers. Back then, when interest rates rose, people panicked and refused to make any offers. However, those who could afford to buy a home back then saw this as an opportunity and closed home deals at significantly lower prices. 

That deal is no longer available because more buyers have caught on to the trend. All of a sudden, everyone wants to buy a home now that the housing market is not crashing. Hence, the multiple offers.

So, what is the effect of multiple offers on the market? To illustrate, suppose there are nine (multiple) offers on a single listed home, and only one buyer gets the deal. That means we still have eight dissatisfied buyers still looking for a home. And the current listed homes for sale are not enough for these surplus buyers.

High Demand, Low Supply

New Castle County is feeling the heat of these, but it seems New Castle is the dividing line between Kent and Sussex County, where houses sit a little longer still. Why is that? The way we see it, it’s all because of the influx of people from New York, Philadelphia, and New Jersey who have relocated to New Castle because of Delaware’s lower property taxes. 

Currently, the days on market in all of Delaware are 32 days, with Kent County at 34 days. Only in New Castle do the days on market average more than 20. 

Homes are selling a little faster now, but it's still nothing to be concerned about. People looking to buy a home who were previously seeing 7-8% interest rates are now seeing 6%. As a result, buyers are stepping up, but there are no homes for sale. Because home inventory is low, multiple offers are made.  

In short, multiple offers happen when there’s high demand but low supply of homes.

Will it stay the same for the next months?

That ebb and flow will come to a crucible in March. When we enter the spring market, we see an increase in the pending inventory of homes. Based on what comes into our system, there are a lot of pent-up sellers who are ready to sell their homes now as things get back to normal. 

Hence, we'll start to see the prices normalize around springtime, in late March to early April. Once inventory comes in and buyers can shop, we’ll see more normalcy. 

So, should you buy a home now?

If you can afford it, absolutely. However, there are three types of people to whom we will say, “Don’t buy a home.” 

1. If you can’t afford it. 

Don’t be poor just to own a home. If you want to buy your first home, you must have a 640 credit score, $5,000 in the bank, a stable job or income for the next 2-3 years, and a monthly payment that is at least three times your income. 

So, if your monthly payment is $1500, you should be earning $4500 a month. That’s how you know if you can afford a home.

2. If you’re staying for two years or less in Delaware. 

Everything can change very quickly if you have an unstable job, such as in the military or seafaring, or any job that requires you to relocate. So, we don’t recommend buying a home if your stay is short.

According to statistics, the value of a home only increases after 3–5 years. So, to get the most out of your home ownership, you must stay committed to it for at least three years.  

3. If you’re wavering and waiting for the market crash to save more money. 

What you’re waiting for isn’t coming. The big crash of 2023 isn’t going to be in the history books. Some economists say that come April or May, we may enter the seller’s market. 

You may say that your friends who bought homes in 2019 experienced a $1200 monthly payment, and now you, in 2021, pay $1800 for renting. So you argue that you’ll only buy it when it goes back to that price. 

Well, prices won’t go down that much anymore. But instead, once you buy, wait three years! Then you'll notice that the value of your home has increased significantly, and you'll feel the same satisfaction as your 2019 friends. (Can you believe 2019 is already three years ago?)

Final Thoughts

And that’s it for this week's housing market update in Delaware. If you still struggle to make a decision about whether now is the best time for you to buy a home or not, always remember that you can always reach out to us. We’ll even help you develop a plan on how you could be able to afford a home specific to your situation. 

So, if you’re ready, feel free to reach out to us at Loft Realty, and we’ll be happy to talk to you. 

Stay tuned for our next week’s market update!