Suggestions on where to live in North Wilmington.... (Hockessin, Greenville: for sale, real estate)

[Platinum350]

Hey all, I am looking for suggestions and advice pertaining to living in North Wilmington. My pregnant wife and I are in our 30's and currently live in Wallingford, PA. We enjoy where we live now but it's time get a bigger home and we're realizing we can get more of house (with much lower taxes) by moving to DE. I work in DE so that will make my commute much better too.

We're looking for a safe area to live that's good for kids, good school district (which I believe to be the Brandywine school district?), somewhere quiet would be ideal too. So far we looked at the following zip codes: 19703, 19803, 19809,19810. Are these good/safe areas? Any suggestions on any other areas to consider?

[jmatthewo]

I am in a similar boat, about to start work in DE, looking for housing in North Wilmington, pregnant wife and in my early 30s LOL. I have been looking in DE mostly for tax reasons as well although ironically I just started to consider Wallingford. Although property tax is higher in PA, I believe state income tax is substantially lower (especially for high earners) in PA, correct?

19803, 19810, and especially the western part of 19809 are all safe areas. Same goes for 19807 and parts west of Wilmington (Greenville, Hockessin). Generally you just want to stay away from south and east Wilmington.

Everyone also knocks DE schools and says that the cost of private school offsets the tax advantage vis-a-vis PA, but I think Brandywine school district is fine. If you look on greatschools.org the schools get good ratings for North Wilmington, at least in Northwest Wilmington.

[Platinum350]

LOL You really are in a similar boat! How ironic you've also considered Wallingford! Wallingford is nice, small area but nice and there are some affordable homes but those high taxes hurt. You bring up an interesting point about state income tax and I just spoke to my accountant about it lol. In short, if we look at the big picture we would make out better in DE than PA. In PA it's 3.07% state income tax and in DE it's a graduated percentage that could go as high as 7.0% but there are itemizations that can be done in PA amongst other things he mentioned. In DE you get more house for your money, substantially lower real estate tax, no shopping tax - I think it's a win.

Thanks for providing those zips, I need to look more into those areas. Greenville is a beautiful area and I hear Hockessin is nice but probably too far for my wife, she works in Blue Bell, PA. Which site are you using to search for homes and does it allow you to use zip codes?

I agree, I've been on greatschools.org and Brandywine does look like a decent school.

[jmatthewo]

Redfin.com is the best source for listings. You can search by zip code and various other criteria. You can also purchase your home through Redfin and get a commission refund from their associated local agent. I am considering doing this, although you will probably get more comprehensive service from a traditional broker that doesn't offer the commission refund.

As far as taxes, you're definitely right about lower real estate tax (although isn't this mitigated some since they're tax-deductible?) and sales tax, but it doesn't seem like housing in DE is much more affordable than PA. It seems to me that the prices in DE are adjusted upward somewhat to reflect the lower property taxes.

[rdlr]

Originally Posted by jmatthewo

It seems to me that the prices in DE are adjusted upward somewhat to reflect the lower property taxes.

No, no, no. That's not true at all. Consider that homes are listed in Delaware between about $40,000 up to a million or more, and that price range covers the entire State of Delaware, which is 96 miles long and between 9 and 35 miles wide at the widest point. Real estate agents do a market analysis, or should, before listing a property for sale. The market analysis is a collection of sales, similar to the subject property in location and amenities, and those comparables are utilized to arrive at a list price of the subject property. There's no adjusting upward to reflect lower property taxes. Why would real estate agents want to, even if they could?

[jmatthewo]

Why would market prices for homes NOT be higher b/c of the tax savings, especially in northern DE in areas close to other states, since sellers (i.e. the market) know that a reason many people buy homes in DE in the first place is lower taxes?

Individual agents don't have to adjust the price upward for the lower taxes to be factored into home prices, of course. All agents prepare prices based on comps, but comparable houses (and the market as a whole) could have a built-in premium because of the lower taxes.

I was just responding to OP's suggestion that you get more for your money in DE. That doesn't really seem true from the house searches I've been doing.

[rdlr]

Originally Posted by jmatthewo

Why would market prices for homes NOT be higher b/c of the tax savings, especially in northern DE in areas close to other states, since sellers (i.e. the market) know that a reason many people buy homes in DE in the first place is lower taxes?

Individual agents don't have to adjust the price upward for the lower taxes to be factored into home prices, of course. All agents prepare prices based on comps, but comparable houses (and the market as a whole) could have a built-in premium because of the lower taxes.

I was just responding to OP's suggestion that you get more for your money in DE. That doesn't really seem true from the house searches I've been doing.

That depends on where you buy in Delaware, and what you buy. It's not unusual to see $200,000 - $300,000 homes having a tax bill ranging from $300 per year to less than $1,000 year. My Kent County tax bill is $288 per year which includes 50% off school tax because I'm a senior citizen. Of course, I don't know what you call a reasonable tax bill. Another side note, I've been in the real estate profession for 30 years, here in Delaware and view your theory as strange. People don't buy houses based on tax bills. With taxes so low in Delaware anyway, how much lower would you want them to be?

[Platinum350]

Originally Posted by jmatthewo

Redfin.com is the best source for listings. You can search by zip code and various other criteria. You can also purchase your home through Redfin and get a commission refund from their associated local agent. I am considering doing this, although you will probably get more comprehensive service from a traditional broker that doesn't offer the commission refund.

As far as taxes, you're definitely right about lower real estate tax (although isn't this mitigated some since they're tax-deductible?) and sales tax, but it doesn't seem like housing in DE is much more affordable than PA. It seems to me that the prices in DE are adjusted upward somewhat to reflect the lower property taxes.

Cool I'll have to check into redfin, especially if I can get a commission! Thanks for the suggestion.

Your right that homes aren't that much more affordable in DE, but they are priced a little lower. One thing that I'm seeing is that there are more homes/better inventory on the market in my price range in DE versus PA. I drove by 8 potential properties in a week in DE and about 4 potentials in PA within 2 months.

[hanggz]

PA makes people pay state taxes on their 410k contribution

[Mary2014]

Originally Posted by hanggz

PA makes people pay state taxes on their 410k contribution

Hanggz,

I think you meant "401K" contributions are taxable in PA - but, when you go to withdraw they are not taxable if you are living in PA.

DE only allows you $12,500 in exemptions per year when you are withdrawing from investments such as a 401k, IRA.

So, you really have to look at not only when/where you contribute to a 401K, but, also where you will be living when you start withdrawing those funds to determine the real tax impact.

Mary2014