Delaware’s real estate market has generally followed national trends in recent times. The COVID-19 pandemic has significantly impacted the housing market, with factors such as low-interest rates, improved employment, economic recovery, and increased buyer confidence leading to high demand for housing.
This has resulted in intense competition in the Delaware housing market, causing investors to shift their focus from short-term flipping and rehab projects to more long-term exit strategies. Overall, the current market conditions in Delaware reflect those seen in other parts of the country. So, in this article, you’ll find the top real estate markets in Delaware with the best home appreciation.
Things to Consider When Investing in Real Estate Markets in Delaware
Rate of property appreciation
In Delaware, the property appreciation rate is essential when investing in the housing market. If the value of the real estate in the state increases over time, it can indicate a strong market with good potential for growth. Conversely, a low appreciation rate may suggest a slower market with less opportunity for profit.
Delaware’s population has been rising in recent years, which can often lead to increased demand for housing. This can drive up prices and create opportunities for investors. However, it is also essential to consider potential factors that may negatively impact population growth, such as economic downturns or declining employment rates.
Real estate taxes
Real estate taxes in Delaware can also impact the housing market. If the taxes on properties in the state are high, it may make it more difficult for buyers to afford homes, potentially slowing down the market. On the other hand, lower real estate taxes may make it easier for buyers to purchase properties, potentially driving up demand and prices.
Standard gross rent
Standard gross rent, or the average rent paid for properties in Delaware, is another essential factor to consider. Higher gross rents often indicate a solid rental market with good profit potential, while lower gross rents may suggest a weaker market.
The age of the population in Delaware can also impact the housing market. Younger people may be more likely to rent or purchase starter homes, while older people may be more interested in purchasing more significant properties.
Rate of unemployment
The rate of unemployment in Delaware is another critical factor to consider. High unemployment can lead to a slower housing market, while low unemployment may indicate a more substantial need with good potential for growth.
Income ranges in Delaware can also impact the housing market. Areas with high median incomes may attract more buyers who can afford higher-priced homes, while areas with lower median incomes may have a lower demand for more expensive properties.
Top Real Estate Markets in Delaware with the Best Home Appreciation
With a median home value of $241,442, Selbyville is a sought-after location in the state, with higher-than-average home appreciation rates compared to the state and national levels. The city has experienced rapid growth of around 31% since the 2010 census, which recorded a population of just 2,167.
This growth suggests that Selbyville is a thriving community, with a median household income of over $41,500, indicating a strong economy. One of the notable features of Selbyville is the beautiful public library, which is housed in a three-story home that Eleanor Roosevelt and Senator John G. Townsend once visited.
Bridgeville’s home appreciation rates are slightly above average compared to national and state averages. While the median home value in Bridgeville is about $30,000 lower than in Selbyville, the overall cost of living is also lower, resulting in a growth rate that was 11% higher than Selbyville’s over the past six years.
With just 2,048 in 2010, Bridgeville is a smaller town than Selbyville, and the average household income is $30,000 per year. Despite its small size, Bridgeville is home to two popular events: the annual Apple-Scrapple Festival and the World Champion Punkin Chunkin’ competition, where participants use giant pumpkin propulsion systems to compete for the title.
Frederica’s home value appreciation rates are slightly higher than the national average and on par with the rest of the state. The median home price in Frederica is $223,900, which is considered exclusive compared to other areas. While Frederica has a smaller population of 774 residents according to the 2010 census, the average household income for the 246 households in the community is $30,780.
This balance of housing costs and income is made possible by Frederica’s low cost of living. Like other small communities, Frederica’s sustainable economy and small size contribute to its strong home appreciation rates.
Rehoboth Beach stands out as the top real estate market in Delaware, with home appreciation rates 25% higher than the state average and nearly 80% higher than the national average. Located amid desirable communities such as Lewes, Cape Henlopen, and the more affordable Dewey Beach, Rehoboth is a popular tourist destination with a small permanent population of 1,327, according to the 2010 census.
With a median household income of $66,850, Rehoboth is not only a desirable beach resort town, but it is also known for its art scene, with a variety of specialty crafters, art museums, restaurants, bars, and cafes, as well as live music and other entertainment options. Overall, Rehoboth’s combination of a small population and a strong economy make it an excellent choice for home buyers looking for a solid investment.
With an average home price of around $171,840, Ellendale has a lower home value appreciation rate than the state average but is on par with national levels. Despite its small population of just 381 at the time of the 2010 census, Ellendale is a close-knit community known as the “Gateway to Delaware’s Resort Beaches,” which attracts tourists and boosts the local economy during the spring and summer months.
The low cost of living and affordable housing prices make Ellendale an attractive place to live, with a charming, semi-rural setting on the edge of a thriving economic region.
The Delaware real estate market has faced some challenges over the past decade, but it is now showing signs of recovery. Real estate activity is increasing, economic indicators are improving, and overall sentiment is positive. However, foreclosures continue to be a barrier to the full potential of the local housing market.
The recent decrease in distressed properties is a promising sign. If the state can continue to reduce the number of foreclosures and increase the available housing inventory, it can reach its full potential shortly. This will benefit all participants in the Delaware real estate market, including buyers, sellers, renters, and investors.