2008 Year End Review - New Castle County, DE

Looking back over the past twelve years, the number of closed properties in 2008 is the lowest on record (chart 1). In comparison to 2007, New Castle County experienced a 29% decline, or just about 2000 units (chart 2). Year over year, the median home price in New Castle County decreased to $229,000, a 2.6% decrease. However, the various market segments within New Castle County experienced decreases from 1% to 7% with the exception of Wilmington which saw an increase of almost 6% and South of the Canal remained flat. As we have stated before - "real estate is local" - and the year over year results within our housing market are a testament to that fact (chart 3).

The number of properties available for sale remained relatively unchanged from that of prior year end (about 4000 homes). The days on market until a property is sold has increased to 71 days, compared to 53 days last year.  Potential buyers are taking longer to make purchase decisions and have more property choices.  As inventory rises, there is the expectation that there will be an increase in negotiability resulting in larger discounts from list price. This too is evident in the data; homes are selling with further reductions from the original list or asking price, as motivated sellers seek the "new market price" for their properties. (see chart 2)

Looking at three housing market indicators on a monthly basis - the number of new listings on the market, the average number of days it takes for a home to sell and the sold price as a percentage of the original list or "asking" price - all point to the volatility that we have experienced in the housing market this past year. The market showed slight recovery in the third quarter but buyer confidence was once again shaken with the negative economic news that plagued the fourth quarter.

The number of newly listed properties dropped nearly 16% year over year (chart 4), clearly homeowners who have no urgency to sell are reluctant to list their properties until economic conditions improve.  Looking at the month-to-month data, the year-to-date average time on market prior to sale began to show some early signs of improvement (chart 5) but moved upward with the economic news in September and throughout the remainder of the year. Similarly, we saw a slight improvement in the "sold price" as a percentage of original list price in the 2nd quarter but that too trended down to 90% by December (chart 6). The expansion of this indicator suggests that sellers have come down further in their price to meet buyer expectations to enable a transaction to occur.

Looking to sell your home in today's market? Realize that you must commit to pricing it better than the vast majority of its competition. Gone are the days when "Location, Location, Location" ruled the day, now it's "Price, Price, Price"!

If you are in the market to buy; despite what you hear, mortgage money is readily available within a changed lending environment. A larger down payment, larger cash reserve, and tighter qualifying ratios can be expected.

(All reports presented are based on data supplied by TReND MLS. TReND MLS does not guarantee nor is it responsible for its accuracy. Data maintained by the MLS may not reflect all real estate activities in the market. Information is deemed reliable but not guaranteed. Data is as of 1/20/09)


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