Wilmington, Delaware has made great strides over the last five years. The Wilmington real estate market, for that matter, has made up a lot of ground since the recession. Home and list prices are on the rise, as well as the total amount of equity gained. The number of total foreclosures has stabilized and the economy is growing every day. The most recent unemployment numbers are cause for concern, but not enough to sour on the market as a whole. There are many positive trends and indicators in place to suggest that the short term Wilmington real estate market surge will continue.
The Wilmington real estate market has an average home value of $113,506, which is actually 49.9 percent lower than the actual sales price. Homes in the area are selling for an average of $226,681. On that note, according to Realtor.com, 1,392 homes have recently sold, with an additional 1,621 currently on the market. The average home price per square foot, on the other hand, is $77.
The Wilmington real estate market has seen home prices rise in the wake of the recession. Like many other parts of the country, Wilmington was hit hard by the market collapse. Unlike many other areas, however, they have rebounded quicker than expected. Over the past twelve months, home appreciation has gone up by an average of 6.03 percent, which is on par with the national number. Over the past twenty-four months, Wilmington real estate has appreciated over 10 percent, whereas the national annual rate was only 5.08 percent. Going back five years, Wilmington homes have increased 11.49 percent, with the national average just over 2 percent. The fact that the Wilmington is on par, and – in most cases – exceeded the national average, speaks to the strength of the market.
Wilmington’s economy is alive and well due, in large part, to being the most populous and readily available in the state. The area also boasts many business friendly laws that have attracted new businesses to the area. They are also known as the national credit card center for the country. Bank of America, Chase card services and Barclays bank of Delaware are all headquartered in Wilmington. These companies have injected life into the downtown area and have helped push the economy forward. That being said, unemployment is still a slight concern. The local unemployment rate for Wilmington is currently 6.2 percent. This number is higher than both the statewide and national averages of 4.5 and 5.4 percent respectively. For a market that features such a strong number of local big businesses, a high unemployment number is slightly concerning. A positive is that this number has declined over the past twelve months, and appears to be trending downwards.
High affordability continues to help the entire Wilmington real estate market. The cost of living is an average of $51,000 annually. This number is 15 percent lower than the rest of the state. A reduced cost of living directly leads to more affordable housing. Regardless of the market, local affordability is one of the most important factors. In many cases, affordability can drive the market forward and help provide sustainable growth. Another positive trend for Wilmington is in the local median age of residence. At 35 years old, this is lower than the statewide and national numbers. This indicates that there could be a large number of first-time homebuyers set to hit the market. If, and when, that happens, it will only serve to drive home values higher.
According to RealtyTrac, the Wilmington real estate market has about 298 homes in some state of foreclosure. That means the Wilmington real estate investing community will have access to nearly 300 homes that are either in default, up for auction or bank-owned. At that rate, the number of distressed homes is actually down 2 percent from the previous month and 3 percent over the course of a year. The main opportunity, however, is in the discount these properties offer. According to RealtyTrac, distressed homes sell for an average of 51.5 percent less than non-distressed homes. Everyone interested in Wilmington real estate investing should be excited about the spreads these homes could potentially offer.
After a sharp increase in new housing permits, Wilmington real estate saw a steep decline last year. 2012 and 2013 saw an average of 113 new housing permits, while the 2014 number dipped to 29. Out of those 29, a whopping 22 of them were multifamily properties. This further validates the point that the Wilmington housing market is full of great investment options. More than 26 percent of all properties in the market are rental properties, with a large majority being multifamily. The total reduction of inventory, coupled with the increase in sales prices, suggests there is demand for real estate. Under this scenario, you can expect the number of new housing permits to bounce back sharply sooner rather than later.
Based on short term information provided by Trulia, the most popular areas in the Wilmington market are Baynard Village, Highlands and Hilltop. The area that saw the biggest reduction in list price percentage was the Brandywine Hills section, which decreased by as much as 10 percent. Other areas of decline were Cool Springs and Hilltop, which dipped 8.7 percent and 8.1 percent respectively. The areas that saw the biggest jumps were Wawaset Park and Browntown, which both rose close to 6 percent.
The Wilmington real estate market is ripe with investment opportunities. A fair amount of foreclosure inventory, coupled with a large rental pool, makes this an attractive market. There are also rising home prices and a growing local economy. The Wilmington market is also one of the most affordable places to live in the state, with equity growing yearly. The Wilmington market appears strong, and ready to move on from the recession.
Wilmington Real Estate Market Summary:
- Current Median Home Price: $113,506
- Unemployment Rate: 6.2%
- Median Household Income: $47,526