Where will I loose more - north of the canal or south of the canal? (Wilmington: real estate)

[Gdelemschl]

Lets say I buy a house worth 350K now and the real-estate downturn
continues for another two years. Given the present expectations of all the
experts/media, its obvious that I'll loose value over time if I buy now.
Now, the real question is: Where will I loose more - north of the canal or
south of the canal? (i.e. north of Rt. 896 or south). Thats the real concern.
Lets say, RE goes down by another 20-25% from the present, supposedly,
bubble-levels. Where will be the larger downdraft felt??-- IOW: will the
south of the canal area go down by 25% while the north, by only 20% or
is it vice-versa, in your studied-opinion (if you are a long-time
resident or observer or expert of the Real Estate dynamics of the DE area)?

[Gdelemschl]

Heard repeatedly from many that Middletown DE got too much supply of homes presently (due to assortment of reasons ... overbuilding by builders, high-gas-prices for longer commutes to job-areas flushing-out dwellers to northern areas etc.). Does this mean that this overhang will stay for many years to come, keeping the prices depressed there? And, potential loss of value will be much greater there in couple of years, than elsewhere? Any opinions appreciated.

[kat196]

The News Journal had an article about this a month or two ago. I'm pretty sure they said Kent County homes are expected to lose more value than New Castle homes.

Kathy

[from PA]

OUCH ... that's not good news for sure. Maybe if Kent County lets the existing builders catch up before they approve more development here it would help with the overabundance of homes in the area.

[rossc]

I think the further North you go the better off you'll be...with Sussex losing the most.

[rockky]

I'll take a stab at this question, although I suggest that there are no certainties comparing one geographic area to another in DE. They are so different. It may be like playing the penny slots rather than the dollar slots.

rossc, I tend to agree with you about Sussex County with one exception. The mid priced properties in Sussex are going to sit. One, the prices were artificially inflated for several years. Middle class folks don't have the disposable cash for the second home investment they once had....nor are the loans or low rates available now. The mansions will probably still sell to the top floaters. Like you've said, the big money retirees from the Beltway areas who want to live in the area full time are still finding their way to DE. All sales have slowed at the is point.

Now...the below the ditch vs. above of the ditch....

Not too long ago New Castle Co. put a moratorium on new construction. They didn't, and still don't, have adequate sewage systems to accommodate the influx of homes and people.

Middletown, although it is in New Castle County, is ruled by their own municipal laws. They hung out the "Y'all come!!" sign to developers. The developers had the option to have no business in the rest of New Castle Co. or flock to Middletown and keep their businesses and livelihoods a float. Not a tough decision.

Boom!! Middletown became the development mecca. Homes sprang up in the middle of cornfields. Major chains opened stores. The sleepy little town of Middletown changed so quickly that it's now hard to recall what it looked like just a few short years ago.

Middletown needed a sewer system to accommodate all this population increase. They built it. Now, New Castle Co. is buying the use of that system. Pretty smart of those good old boys in Middletown...eh? The county is paying them for use of their sewer system.

New Castle Co. has lifted its ban on development, but I doubt the rate of new construction per capita meets that of Middletown. Besides, they still don't have an adequate sewer system of their own. You don't wanna know what is in the water around Wilmington.

Here's my point. Middletown is a burb where people live and play. There are no major employers there. Ya gotta go north for that. The farther north you go (Centerville/Greenville) the more elite/expensive the real estate. There is less land to develop to the north. That could keep the prices higher there. The housing glut around Middletown could create lower prices. It's all a crap shoot (no pun intended), since a personal life style would need to be factored into the equation.

This isn't comparing apples and oranges. This is comparing apples and perogies.

And there's more interesting facts about the boom in Middletown as related to schools and infrastructure...but this post is very long already.

[cuff822]

Rockky continue please, very interesting. We are moving from the city of Wilmington next spring. Looked in Middletown, but felt prices were too high with the commute, gas, etc. but did recognize there were a lot of houses on the market. Just recently started looking in North Wilmington, and appears prices are moderating some, anxious to see what happens over the course of the next 12 months.

[Gdelemschl]

cuff822>> Looked in Middletown, but felt prices were too high with the commute, gas, etc.
You are right ... unless the Middletown prices drop by another 30% from the present bubbly-levels, they are not competative at all IMHO! (Given other good places near by for Wilmi. commuters, like- Hockessin, Bear/Glasgow/DE; Glen Mills, Chadds Ford, Wallingford/PA; Swedesboro, Mullica Hill, Logan/NJ)