Home buyers aren’t going to be in the driver’s seat for much longer in Delaware, where housing prices are strengthening as the start of just what might be a recovery gets it roots. Efforts to fight foreclosures in Delaware might be helping the housing market as bidding wars break out on some especially low priced homes.
The state Attorney General, a lawmaker and a judge created a foreclosure mediation program to urge troubled homeowners to sit down and negotiate with mortgage companies. The program may be starting to work with fewer foreclosed properties on the market.
In Wilmington the number of home sales has slipped as prices edge upward, and the inventory of homes gets more in balance with market needs. The federal government’s expansion of the home buyer’s tax credit should aid the market in recovering as homeowners use the credit to move into a larger home before the market steams ahead. Housing Predictor forecasts Wilmington average housing prices to inflate 4.1% for the year.
Home sales are also off in Newark, despite the tax credit hurting the local economy, where it’s tougher to get a mortgage like many other places because of more restrictive lending practices. Foreclosures aren’t battering the market in Newark, but are projected to increase in the early part of 2010 as banks get more aggressive foreclosing on properties already in default, which should translate to hurt the Newark market. Average home prices are forecast to deflate as a result, 2.8% in 2010.
Sales are up in Kent County, one of only three counties in the state of Delaware. In the capitol city of Dover sales of existing homes have not been strong by any means, only in the dozens per month, but the market is making strides towards recovering from the financial crisis. Government leaders are using federal stimulus money to buy and renovate homes that have been left vacant because of foreclosures. The foreclosure epidemic has been severe in Dover as job losses rise.
Additional political pressure will have to be applied before more people go back to work in the current economy, and only after that will the housing market make a full recovery. Until then lender assisted short sales, in which the lender cooperates to cut the size of the mortgage owed is the best many at risk of foreclosure can hope for these days if modifying a mortgage doesn’t work. Dover is forecast to sustain average housing deflation of 8.6% in 2010.
Just outside the capitol, Smyrna is experiencing a sluggish market, and has been for more than three years. The first time buyers’ tax incentive didn’t do much to stimulate sales. As sales remain slow home prices are forecast to decline on an average of 9.5% for the year.