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Delaware becomes a buyer’s market for homes as foreclosure rate remains high

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CLOSEPLAYLIST: BUSINESS IN DELAWARE
Checkers expanding in Delaware with more locations on the way | 0:28

Checkers, the popular fast food destination known for its burgers and fries, is opening two new locations as it plans on rapid Delaware expansion.
Produced by Jeff Neiburg

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Patrick Harker, former President of the University of Delaware, toured parts of Wilmington Tuesday afternoon as part of his new role as the President of the Federal Reserve Bank of Philadelphia. 7/11/17
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Chemours said it has captured the wastewater leaking a toxic chemical into a North Carolina River. 6/27/17
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Delaware’s housing market, for buyers, is promising. For sellers, it can be frustrating.

The price of an average home in the First State increased just 2.2 percent during the 12 months before Oct. 1, the lowest rate among states along the Northeast Corridor, and the fifth lowest nationally, according to data released Tuesday by the Federal Housing Finance Agency.

The slow growth has been driven by a large number of homes that are in foreclosure or otherwise being sold in distress at fire-sale prices, said Bruce Plummer, president of the Delaware Association of Realtors.

“It is a problem that is statewide,” he said. ”But at least there’s appreciation and not depreciation.” 

It also is a trend that has been ongoing for many years as Delaware home values increased just 12 percent during the past half-decade, the third-lowest figure nationally, according to the Federal Housing Finance Agency.

While the U.S. housing market steadily has recovered from a wave of foreclosures sparked by the Great Recession nearly a decade ago, Delaware has been slower to rid itself of a large proportion of bank-owned homes, said Plummer, who also is a practicing real estate broker for Coldwell Banker in Rehoboth Beach.

“For some reason, the problem is lingering in Delaware more than I expected,” he said. “We have $800,000 homes that are in foreclosure at the beach.”

An October report from ATTOM Data Solutions, a real estate research firm, determined that 1 out of every 800 homes in Delaware is in foreclosure, which is nearly three times the national rate.  

In addition to foreclosures, Delaware’s struggling economy and increased taxes on real-estate transfers are dampening demand for available homes, Plummer said. Still, he doesn’t believe a full-blown housing crisis, similar to 2008, is on the horizon. 

Pete Davisson, a Wilmington commercial real estate broker, said Delaware needs a new employer, like an Amazon.com, to bring new buyers into the state. 

“There’s nothing in Delaware today, unfortunately, that is calling people, saying, ‘Come to Delaware,’” said Davisson, who is a partner at Jackson Cross. “Manufacturing has gone away and the banks are all treading water … and the end result is houses don’t sell if you don’t have new people coming.” 

STORY: UnitedHealth cuts 138 Delaware jobs after it loses Medicaid contract

STORY: Confidential plan calls for consolidating Wilmington schools down to two

As Delaware’s homes have struggled to appreciate, home values nationally grew 6.5 percent during the 12-month period before Oct. 1, sparked by hot housing markets west of the Mississippi River and in Washington, D.C. 

“With relatively favorable economic conditions and a continued shortage of housing supply, price increases in the third quarter were generally robust and widespread,” Federal Housing Finance Agency economist Andrew Leventis said in a statement on Tuesday. 

The housing figures are derived from records of home sales financed by mortgages through the government-sponsored giants, Fannie Mae and Freddie Mac. 

While the Federal Housing Finance Agency does not publish the actual dollar amount of home values by state, the home listing website Zillow estimates the average Delaware home to be worth $217,000.

Plummer says Delaware’s relatively low housing prices and less competition for new homes is leading to a buyer’s market.  

“If you’re a buyer, this is another reason to come because prices are still affordable,” Plummer said. “I don’t think we want the most rapid appreciation, but we don’t want the least rapid appreciation.” 

Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.

 

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Article source: http://www.delawareonline.com/story/news/2017/11/28/delaware-becomes-buyers-market-homes-foreclosure-rate-remains-high/901088001/

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