Delaware Real Estate Market: What to Expect in 2024 and 2025?

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✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.

The current median home sale price of $352,100 is rising slowly at just 1.6% YoY. Moreover, homes spend only 26 days on the market. This indicates that the Delaware real estate market is pretty competitive.

The average months of home supply are 2 months YoY. A market with fewer months of supply indicates a seller’s market. However, in July, the number of homes sold increased by 15.5% year-over-year. In July 2024, 761 homes were sold up from 659 homes last year.

Such inactivity in the market is mainly due to the recent NAR settlement. People are anxious about the selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed suit. It will probably reduce the home selling prices. As a result, buyers will enjoy better affordability and low mortgage rates. Here are some tips to help you stay competitive in the market:

• If You Are a Home Buyer: The number of homes for sale (2,034) is up by 13.9%. Combined with the expected drop in home prices, this could benefit you. The low mortgage interest rates at 5.85% are now in buyers’ favor. If housing demand and prices drop, you can also request seller concessions.
• If You Are a Home Seller: The correction in the home prices is long overdue. Following the NAR settlement, home prices may dip further. As a seller, you can still profit from your home sale before prices decline.

So, How Is the Real Estate Market in Delaware?

Balanced!

The number of homes for sale increased by 13.9% in June 2024 compared to the previous year. This is the 6th consecutive month the housing market has witnessed such growth. Other important facts are:

• Median Days on Market: The median days on the market for homes for sale are 26 days, up by 9 days YoY. This trend suggests a high demand in the Delaware real estate market.
• Housing Inventory and Supply: As a buyer, you have more options now as the housing inventory is up by 13.9%. There are 2,034 homes for sale in Delaware, with an average supply of 2 months.
• Average Home Prices: The median home price in Delaware is $352,100. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is 100.2%, down by 1.1 pt YoY.
• Home Sales: As per July 2024 data, home sales increased by 15.5% YoY! 761 homes were sold, compared to 659 last year.
• Average Rent Prices: Rental costs vary statewide. The median rent is $2,000 with a zero month-over-month change.

Why Is Delaware a Seller’s Market Now?

Delaware’s real estate market has a balanced inventory of homes for sale. Besides this, a steady increase in median home prices favors home sellers. Homes spend only 26 days on the market which depicts the competitive market.

Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending only 26 days on the market before going under contract. This is visible in metro cities like Dover and Wilmington where the average days on the market is between 12 to 28 days.
• Multiple Offers on Homes: Dover got 78 in Redfin’s Compete Score. It means the housing market in Alaska is very competitive. Many homes get multiple offers, some are even sold without contingencies.
• High Sale-To-List Price: Homes often sell for 1% around the list price and go pending in 12 days. Hot homes sell for 2% above the list price and go pending in 4 days. The average sale-to-list price ratio in Dover is 99.8%.

• Homes Sell Above List Price: On average, 37.1% of homes sell above list prices. This trend indicates a gradual shift toward a buyer’s market.

Delaware Housing Market Predictions 2024

Here are the predictions for Delaware’s housing market in the remaining months of 2024 and 2025:

1. Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market. The historically high interest rates averted buyers in 2023. But the easing inflation and stabilizing rates will bring back house hunters.
2. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across DE YoY, reaching $287K in July 2024. Cities like Wilmington and Dover expect a surge in home prices by 6% and 5.2% on July 31, 2024.
3. iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.
4. New Home Construction Sales Will Increase:  As per the Building Permits Survey, 4,024 new private housing units were authorized, in July 2024. Delaware’s housing market’s high demand will be served with the new constructions.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

1. Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
2. Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
3. Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
4. Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

When Will the Housing Market Crash in Delaware?

A housing market crash in the First State is unlikely.

Wilmington, Delaware’s largest city, is the state’s economic hub, offering diverse job opportunities in finance, healthcare, and legal services. Major employers, including JPMorgan Chase, Bank of America, and AstraZeneca, strengthen the city’s job market. Delaware surpasses the 24 US States when it comes to economic growth.

Delaware’s unemployment rate is at 4.1%. The average cost of living in Delaware is $51,113 which is 2% higher than National Average. Although Delaware is one of the smallest states, it offers diverse housing options, from historic city homes to waterfront properties and rural areas. So it is unlikely that Delaware’s housing market would crash anytime soon.

2024: Is It a Buyer’s or Seller’s Market Now?

Delaware real estate market favors sellers in 2024. (And buyers, too!). The Delaware real estate market is expected to lean more in favor of the buyers in the latter half of 2024.

Home prices are rising slowly, and the number of homes for sale has increased by 13.9% YoY. Buyers now have more choices. With mortgage rates around 5.85%, buyers also have more purchasing power.

Consequently, more homeowners are likely to list their homes on Delaware MLS. The 1.9% decrease in new active home listings in Delaware has brought back home shoppers. So, whether you are looking for a condo in Newark or a single-family primary home in New Castle, you will find your dream home in the coming months.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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