The Kent County real estate market saw homes sold at higher prices and local inventory actually continued to decline in 2012, with both trends continuing into the first quarter of 2013, local realtors reported.
Kent County Association of Realtors officers said the gains were enough to signal the rudimentary beginning of a transition from what has been strictly a buyer's market, post Great Recession, into a veritable seller's market that followed the laws of supply and demand.
Kent County Association of Realtors President Michele Bilow, owner of EXIT Realty, said the lower inventory and the ensuing increase in multiple offers to sellers both combined to help increase average settled prices 6.7 percent to $175,000.
"In the recession, you had a lot of homeowners that were struggling because of lower cost prices, which was causing more short sales," Bilow said. "Because of the fact that you have less inventory on the market, you're seeing prices come back in that aspect.
"It's helping raise your market values, which is helping different developments that were hurt by several properties going to foreclosure," she said. "Foreclosures have increased in price as well."
Kent County Association of Realtors President-elect Doug Doyle, of Harrington ERA Realty, cautioned that a seller's market was still a ways off from maturation. However, Doyle said inventory actually started decreasing in 2009.
The first name of Kent County Association of Realtors President-elect Doug Doyle, of Harrington ERA Realty,was corrected in this article. The Dover Post sincerely regrets the error.
"If you just look at Kent County stats, the inventory has gone down for 39 straight months," he said. "So, it's starting to become a challenge, especially finding good homes on the market. There are still a lot of junky homes on the market but good homes are selling fast compared to 12 months or even six months ago.
"Pending sales are way up and new listings are way down," he said. "So, at some point, we're going to get to a situation where it does become more of a seller's market than a buyer's market. And prices will go up. They're going to have to."
This would help home values in the long run, and it would happen at a healthy pace, Bilow said.
"It may not be as much of an increase that you had when the market was on fire," she said. "But you're still seeing value increase every year, which is a better way to recover."
A pent-up demand for homes, including from those who moved in with family during the recession, was helping to fuel the recovery, Doyle said.
"There are people coming out from underneath the rock," he said. "People still need somewhere to live and most people still want to be homeowners.
Page 2 of 2 - "Part of the supply issue goes back to the timeframe where people bought houses that are still not valued at where they can sell them [for profit]," Doyle added. "So, we're losing some of the move-up people because of that."
It may still be hard for people to understand the bounce back in the real estate market, Doyle said. But the realtors association felt the pain, losing half of its membership. Also, real estate licensing classes dried up. But classes reappeared last year and have continued this year, he said.
In addition, many consumers realized that they could take on a mortgage with lower monthly payments than the rental market, which capitalized on the market conditions, Bilow said.
"People really understand the benefit of owning a property and having the tax write-off, as long as that continues to exist, and to have that pride of home ownership versus renting a property and having to get permission to customize a home to your needs," she said. "And they can actually pay less."
ABOUT KENT COUNTY REAL ESTATE
The total inventory of homes available for sale in Kent County was down 20 percent in January 2013 compared to January 2012, while the number of homes that went to settlement increased by 15.5 percent. In addition, selling prices increased by nearly 7 percent.
Single-Family Jan. 2012 Jan. 2013
Inventory 1,393 1,118
Settled Units 84 97
Median Price $150,000 $160,000
Stl. Price/Original Price 89.1 % 92.0 %
Source: Market History Report 2013, by TREND, courtesy Kent County Association of Realtors.