A lack of inventory is causing a sudden surge in home sales throughout Delaware. Daniel Sato/The News Journal/Wochit
Keller Williams Realtor Cheryl Stigars listed a house in the Brennan Estates development in Glasgow on Friday, March 9.
By that Monday, after showing the three-story, brick front townhouse on Sunday, the three-bedroom house with a two-car garage had multiple offers.
"Homes don’t necessarily always come on the market in this development," Stigars said.
The seller, David McGowan, ended up taking an offer a few thousand over asking price.
"I was caught a little off guard," said McGowan, who is looking to downsize.
Now, the 53-year-old is scrambling to find a new house by the end of May.
"It's a good problem to have," McGowan said.
Right now, real estate agents say, that's par for the course as a lack of inventory is causing a sudden surge in home sales throughout Delaware, a nationwide trend favoring sellers. How long it will last remains to be seen as the threat of rising interest rates looms and the inventory issues cause a spike in prices.
"I don’t have a crystal ball," Stigars said. "I just think at this point we’re going to continue seeing a trend, if people are interested in selling a home in a desirable area, there’s going to be competition."
Bayard Williams, a real estate agent with Re/Max who's also the current president of the Delaware Association of Realtors, said normally in a balanced market there's a six month supply of homes, meaning there's enough inventory that selling all the houses in a given market would take up to six months.
"We’ve been hovering around a three month supply of homes," Williams said. "We don’t have as many to sell.
"When you have less to pick from, it becomes more competitive. If you and I are both looking for a house and there’s only one house, only one of us are going to get it."
"People are looking to purchase and they want to purchase now," Stigars said.
Williams, who lists a lot of properties in Delaware, said he's seen a lot of multi-offer situations like the one Stigars had earlier this month.
It's not just in Delaware.
The National Association of Realtors said Wednesday that sales rose 3 percent last month to a seasonally adjusted annual rate of 5.54 million.
The median existing-home price for all housing types in February was $241,700, up 5.9 percent from February 2017.
Total housing inventory at the end of February rose 4.6 percent to 1.59 million existing homes available for sale, but is still 8.1 percent lower than a year ago (1.73 million) and has fallen year-over-year for 33 consecutive months, the NAR said. But the U.S. is coming off a year in which home prices rose at the fastest 12-month pace in more than three years.
The climate has created a sweet spot for sellers and a big obstacle for buyers. A strong job market is keeping demand high even while the number of listings declines.
According to Zillow, the online real estate database company, the median home value in Delaware is $245,900 and home values in the state have gone up 14.5 percent over the past year.
Zillow also says foreclosures will be a factor impacting home values in the next several years. In Delaware, Zillow said, 5 homes are foreclosed per 10,000, higher than the national value of 1.6.
"We’re still coming out of the Great Recession," Williams said. "That had a tremendous impact on our industry. New construction during that time came to a screeching halt."
Many homebuilders during the recession went under, but Williams said new construction is rebounding. Tax cuts have homebuilders remaining confident and shrugging off higher mortgage rates.
That's where McGowan is looking. But in his ideal area of North Wilmington, he said, the newer construction is either less bountiful or too expensive. His search is now focused in the Middletown area, where new construction is more abundant.
Even after a good experience with McGowan, Stigars, his agent, warned, that the future might be daunting. She got into real estate in 2007 and saw the worst of times.
"I’m afraid that we’re heading toward turbulent times again where people are willing to go $5,000 to $7,000 overbidding on a property," she said. "We just don’t know what the market is, in turn, going to do. I'm a little hypersensitive."
In other words, if you're thinking of selling, there might no time like the present.