No doubt there has only been good news over the past few years on the status of the residential real estate market.
However, some question if we have recovered from the Great Recession collapsed real estate market. If not, when will we fully recover? The objective of this article is to provide answers to these questions.
This analysis addresses only single-family properties, located in Coastal Delaware's real estate market with one of the following ZIP codes: 19930 Bethany Beach, 19944 Fenwick Island, 19945 Frankford, 19958 Lewes, 19966 Millsboro, 19967 Millville, 19968 Milton, 19970 Ocean View, 19971 Rehoboth Beach, or 19975 Selbyville. Analyses cover 16 years. Actual numbers provided for 2005 thru 2017. Projected numbers provided for 2018 thru 2020. For each of these years, three key market measures were analyzed: number sold, average days on market and average sold price.
• Number sold - Prior to 2015, 2005 was the peak year with 1,821 single-family properties sold. 2008 represented the year our market bottomed out with only 912 sold. The great news is, after a 10-year period, the number of sales in 2015 surpassed the number sold in the previous peak year! Further, number sold increased in the following two years as well. I believe due to demand and the increase in number of new developments, this trend of increased number of homes sold will continue.
• Average days on market - 2005 still represents the best/shortest period of time to sell a home, only 115 days. 2010 was the worst year, taking 204 days to sell a single family home. 2017 average DOM at 117 days is only two days longer than 2005's lowest average. This trend of homes selling slightly faster will continue. I expect within approximately one year, we will reach a new low average DOM.
• Average prices - 2006 remains the peak year for the highest average sold price at $570,777. The average sold price at $419,036 in 2012 represents the lowest average sold price during the past 13 years. As you can see, the highest average sold price in 2006 is $88,454 or 18 percent above the 2017 average sold price! Homes selling at moderately higher prices is expected to continue. However, I expect it will take approximately three years to reach a new high average sold price.
To conclude, since 2013 our Coastal Delaware real estate market for single family homes has shown encouraging improvements, some significant. However, the highest average sold price in peak year 2006 is 18 percent above the 2017 average sold price. Therefore, the economic recovery is not complete - yet! I expect full economic recovery for single family housing market is likely to occur in approximately years, when the average sold price is expected to exceed the current record high.
NOTE: All above data was compiled from Matrix Multiple Listing Service System, and is subject to change without notice, may not reflect all real estate transactions, considered accurate but not guaranteed, and does not constitute an opinion of nor is data accuracy responsibility of any association or its members. Analysis is for informational purposes, should not be used or construed as investment advice or recommendation regarding purchase or sale of any properties.
Kent H. Hannaman is a sales analyst with Ocean Atlantic Sotheby's International Realty. For more information call 302-227-6767.