Home Buyers: Are We There Yet? Regional Edition: Wilmington, DE (c) Prudential Fox and Roach, REALTORS®

1. The Chairman’s Report
A Message from Lawrence F. Flick, IV, Chairman and Chief Executive Officer
Prudential Fox & Roach, REALTORS® and The Trident Group
SUMMER 2011 REGIONAL EDITION: WILMINGTON AREA
“Are We There Yet?”
Summer’s here and for many Americans that means we want to make sure we get the “best possible” deal.
filling up the gas tank, checking the tires and venturing I understand these reasons for waiting, but eventually,
down the highway. Whether driving to the mountains the desire to own the home we want overpowers our
or shore, or setting off on a cross country adventure, hesitancy. It is then that we make the decision to move
we’re eager to get to our destination. Perhaps you forward with our lives. I believe we’ve reached that
remember the road trips you took as a child, or those point — we’ve made our journey and are now pulling
you’ve taken with your own children. Either way, our up to the curb!
journeys are often accompanied by the refrain “Are we
there yet?” IS BUYING A HOME STILL A
GOOD INVESTMENT?
“Are we there yet?” Lately I hear this question from
consumers wondering if our real estate market has When Case Shiller released its latest Home Price Index,
reached a turning point. My answer is: Yes — we the news media was flooded with talk of a double dip in
are there! home prices. Case Shiller obtains its information from
transfer tax data and compares the consecutive selling
We’ve been waiting…waiting for the economy and real prices of the same properties. While it is a useful index
estate market to turn around. Meanwhile, we’ve put our for understanding some aspects of real estate trends, it
homeownership dreams on hold. There are two reasons can also be misleading if not used in context of local
for this. First, we worry about the employment outlook market trends. The press highlighted areas like Detroit,
and our ability to continue meeting our financial MI and Las Vegas, NV where 2010 home values were
obligations. Second, before we start to look for a home, less than or equal to what they were in 2000.
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2. Wilmington Area Since 2000: up 58% Since Peak: down 13.74%
Case-Shiller® Home Price Index: Single-Family Aggregate Index, (Index, 2000Q1=100), SA
Source:Fiserv, FHFA, Moody's Analytics 5/09/11
Wilmington, DE-MD-NJ Metro Area Counties: New Castle DE, Cecil MD, Salem NJ
But, in the Wilmington area, this simply is not true! year ago. But when distressed sales are taken out of the
Yes, prices have declined since their 2007 peak, but they equation, prices fell just 0.5% in that time. In our area,
remain well above 2000 values, as illustrated above. it is important to note that less than 1/2 of 1% of all
households are in the foreclosure process, yet because
In the past ten years, the average sales price in our area the media doesn’t highlight regional differences, many
has also increased significantly. In 2000, average sales perceive that our market is also distressed. The reality is
price was $154,000. So far in 2011, it’s $241,251. that we are faring better than much of the country:
ARE REAL ESTATE PRICES AT THE BOTTOM? Our market is not suffering from a foreclosure/shadow
inventory hangover.
No one really knows that a market has hit “the” bottom
until after it has begun to rise. Prices in our region have Even if prices were to fall a bit more to what we imagine
been bumping along a bottom since 2009. must be rock bottom, consumers need to consider
current interest rates. Earlier this year, mortgage rates,
What’s more, if we remove foreclosures from the while still low, rose to 5.25%. At publication of this
picture, prices have been steady across the country. report, interest rates unexpectedly decreased once again
According to Core Logic, another source of data, overall to 4.5%. For a $250,000 mortgage, the lower rates will
home prices fell 7.5% in April versus the same period a produce a savings of $41,000 over 30 years.
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3. Our area is strong
because our local economy is diverse with
significant concentration in “eds, meds, and pharma.”
IS THERE GOING TO BE A DOUBLE DIP ISN’T IT HARD TO GET A MORTGAGE NOW?
RECESSION?
The pendulum has changed direction away from loans
As far as the recession is concerned, it’s been a long without income or asset verification. The fact remains
road — bumpier and more uneven than we anticipated. that those who are employed and have average credit
But all signs point to a sustainable recovery and most can get a mortgage. With proof of income and assets,
economists do not believe that there will be a double applicants today can secure a mortgage at a good rate.
dip recession. Employment is a key factor. So far this FHA loans are still available with 3.5% down, and 5%
year, the economy has added almost a million jobs. conventional loans are commonplace. Your Trident loan
Manufacturing is also strong. Events in the Middle East consultant can help determine what program works best
and North Africa have caused gas prices to spike, but for you.
they are beginning to come down again.
WHY NOW IS THE TIME
Our area is strong because our local economy is diverse
with significant concentration in “eds, meds, and Every buyer has an individual situation and motivation
pharma.” Overall, there’s been positive growth since July for making a purchase. If your personal circumstances
2009 and I expect this to continue. The Moody’s dictate a move, here are four excellent reasons why the
Analytics report for the Wilmington area states that, time to buy is now:
while Wilmington’s recovery will be slow over the next • Affordability — Homes are more affordable now than
few months, longer term, “real income will grow rapidly since the industry started keeping records in 1970.
thanks to above-average population growth and job
• Selection — There’s a great selection of homes for
growth in education/health and financial services.
today’s buyers.
Wilmington will become an above-average performer
in job growth.” • Low prices and interest rates — Once the majority of
consumers begin to feel confident again and enter the
market, both prices and interest rates will rise.
• Pent up demand — Households waiting to form will
begin to unleash many new buyers into the market.
Also, a recent survey noted that 65% of renters said
they were planning to buy a home soon.
Homes are more affordable now
than since the industry started keeping records
in 1970.
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4. WHAT IF I NEED TO SELL? ARE WE THERE YET? YES!
We are in a buyer’s market, but homes are selling. Last Don’t wait until the road is jammed with traffic.
year, 48,000 homes were sold in our market area. Why Be among the first to arrive and do take your
did these properties sell when others sat on the market? trusted guides with you: your Prudential Fox
The two main reasons were price and condition. & Roach sales associate and Trident loan consultant.
They are dedicated professionals who can help you
• Price — When selling your present home to buy navigate along the way. The long journey is over and
another that better meets your needs, it’s important we’re pulling up to the curb. We can answer the
to price your home correctly. Keep in mind that question “Are we there yet?” with confidence.
although it may sell for less than it did in 2006, the Yes — we are there!
home you buy now will not cost as much either.
• Condition — There are a lot of houses on the
market, so it is important to make sure that yours
stands out. Your Prudential Fox & Roach sales
associate will advise you on how to make it the most
appealing to potential buyers. Lawrence F. Flick, IV
Chairman and Chief Executive Officer
Prudential Fox & Roach, Realtors® and The Trident Group
We can answer the question
“Are we there yet?” with confidence.
Yes – we are there!
An Independently Owned and Operated Member of the Prudential Real Estate Affiliates, Inc.
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