Pandemic-fueled buying frenzyhas pushed prices up, selling time down
By Lynn R. Parks
Photographs by Scott Nathan
From the October 2021 issue
Coastal Sussex has long been a mecca for retirees. “They’ve been coming here for years,” says real estate agent Judy Rhodes, manager of the Century 21 Home Team Realty office near Rehoboth Beach. This year, though, the COVID-19 pandemic has pushed more people to act on their plans than usual, Rhodes says. Retirees who had been saving for a home at the beach decided that now was the time to take the leap. Others who were still working turned in their notices and embarked on early retirement.
And then there were younger people who are still raising families but who realized, while kept out of their offices under COVID restrictions, that they could do their jobs from anywhere. “If work could be done remotely and you no longer needed to live near your work location, then work could be done from a much better place than you currently had,” Rhodes says.
All of this means, Rhodes predicts, that by the end of 2021 she’ll have had her best year in real estate since starting in the business 22 years ago.
Agents throughout coastal Sussex are enjoying the fruits of this real estate boom. Sales in the 11 ZIP codes that make up coastal Sussex County (see note at bottom of this page) are up 30.5 percent this year over last: 1,154 homes were sold from January through June 2020. In the same period this year, 1,507 homes were sold.
Things are booming on the construction side too. Dion Lamb, owner of Rehoboth-area CRx Construction, says his company has seen a 40 percent increase in sales of new homes this year over last. The number of renovation projects that the company has done is up by about the same amount (see “Remodeling Comes to the Fore,” page 72).
From January through June, agents with Northrop Realty, based in Clarksville, Md., but with offices in Bethany Beach, Fenwick Island and Millsboro, doubled their Sussex County sales from what they were in the same period last year. Founder and CEO Creig Northrop attributes the increase to — along with historically low interest rates — pandemic restrictions. “The option to work remotely or from home got a lot of people to make the move,” he says. “But ultimately, the question ‘Where do I want to quarantine next?’ drove buyers and sellers to make the decision.”
In many cases, people fled cities for more rural areas. This year, Northrop notes, his company has had more people from New York City buying homes in Sussex County than ever before. “The state of Delaware is hot right now, not only for the resort feel of many communities on the coast but for [low taxes],” he says.
And houses have gone quickly. “We have been putting houses under contract in one week or less,” he says.
“Selling times are very quick,” says Ava Cannon, real estate agent for Jack Lingo Realtor in Rehoboth Beach. In the first half of this year, “if you had a buyer interested, you either had to Zoom call them in with an offer, or get them to come to town immediately. That’s not something that would have happened in the past. There wasn’t that sense of urgency.”
In the first six months of this year, it took an average of 53 days for homes in coastal Sussex to go from being listed to settlement. Compare that to the first six months of last year, when the average days-on-market time was more than double that, at 121. Even in 2005, at the height of the housing boom before the start of the Great Recession, the average in coastal Sussex was 119.
As this selling time has gone down, prices of homes in coastal Sussex have skyrocketed. This year’s average selling price of just over $693,000 is 27 percent higher than last year’s average of nearly $547,000. It is also nearly $160,000 more than the average selling price in the boom year of 2005.
“I’ve seen 22 years of markets, and this market is crazy,” Rhodes says. She points to one of her recent workweeks as an illustration of the extraordinary market.
On a Saturday, the first day of that week, she listed two houses for sale, one in Milton for $469,900 and the other in Ocean View for $365,000. The couple who lived in the Milton home had bought it seven years earlier, for $280,000. That home sold in just five days.
As for the Ocean View property, just hours after listing it, Rhodes showed it to a Maryland woman who immediately offered to buy the property for its full listing price — a number that Rhodes thought was already pretty high for a small house with just 1½ bathrooms and no bathtub. “But the sellers didn’t want to accept it!” Rhodes says. “They said, ‘What if we get more offers? What if we get more than full price?’”
The sellers did ultimately accept that first offer, seven days after their house was listed. “But that taught me something,” Rhodes says. “From now on, in this market, I will ask my sellers, ‘If I bring you a full-price offer on the first day, are you going to accept it?’”
A seller’s paradise
Ben and Sydney Gray were the owners of the Milton home that Rhodes helped to sell. They now live on Red Mill Pond north of Lewes, in a home that they settled on in September. The cost of their new 5,000-square-foot house, which sits on 1.5 acres along the water’s edge, was $1.05 million.
“We never thought that we’d be buying a $1 million house,” says Ben, who manages three area hotels, including the Bellmoor Inn & Spa in Rehoboth Beach. “But it’s a beautiful property and this is our forever home, a place for our boys to grow up.”
The Grays, who have three sons younger than 8, started looking for a new home more than a year ago. And that journey hasn’t been without its disappointments. Last summer, they were prepared to make an offer on a home in the Kings Creek Country Club neighborhood near Rehoboth Beach. “We went to look at the place, loved it, and had arranged for a second showing, during which we planned on bringing an offer in hand,” Ben says. “But within 24 hours, the owners had a full-price offer, all cash, so we were bumped out.”
ErinAnn Beebe, who in November opened her Lewes-area real estate office, NextHome Tomorrow Realty, says that about 60 percent of her sales are cash. In particular, “out-of-staters are bringing a lot of cash.”
Eager buyers in situations where there are multiple bidders opt to pay cash over a mortgage to sweeten the deal, Beebe says. But that doesn’t always ensure success: “Typically, they aren’t the only ones who are offering cash.”
Northrop says that about 50 percent of his firm’s buyers pay in cash. Because of the limited inventory of houses available, “the buyer wants to present the strongest offer possible,” he says. “Cash is king.”
In addition, about the same percentage of buyers are willing to forego home inspections to hasten the deal, he says. Janet Skibicki recently sold her home in Denton Woods, a community near Ocean View. The buyers, Donna and Joe Gould from Narragansett, R.I., made an offer the day it appeared on the listing, after taking just a virtual tour. And they wanted to move ahead without a home inspection.
“I’d never heard of that,” Skibicki says. “This isn’t my first home sale. I’ve gone through this a few times over the years, and no one had ever waived the inspection.”
But to the Goulds, bypassing the inspection wasn’t anything new. In the 2½ days in May that it took to sell their Rhode Island home, more than two dozen people looked at it. Nine of them made cash offers and were willing to bypass the inspection.
“People wrote us letters, saying ‘Please pick us,’” Joe says. “It was crazy!”
Speedy decisions, speedy transactions
Skibicki bought her now-sold home five years ago, when it was brand new, for $224,000. She put it on the market in early June for $300,000. That was the amount the Goulds offered, which she accepted the same day. “I could have waited,” Skibicki says. “But I felt, these people are giving me what I asked, they don’t want a home inspection — why would I hold out?”
Settlement was just a month later, and Skibicki moved in with her boyfriend, who lives in Ocean View. “It was a whirlwind,” she says. “I thought that the house would sell quickly, but not like that. I really thought that I would have some time. But everything happened so fast. I had to pack up really quickly.”
Moving to Ocean View from a coastal town in New England, where the Goulds were able to sell their modest, 864-square-foot/three-bedroom/one-bath home for $460,000, the couple feel they made out pretty well. But Skibicki counts herself lucky that she didn’t have to purchase something else in coastal Sussex after selling.
“I was able to make some money, and I didn’t have to turn around and be the buyer in this market,” she says.
Real estate agent Cannon understands that sentiment. “It’s definitely a seller’s market now,” she says. “I’ve had some buyers who have put five offers in, and not been successful. They get buyer’s fatigue. You think that you’re doing everything right and you get outbid — it can be exhausting and frustrating.”
Chase McLean and his fiancee, Natasha Whetzel, did manage to buy a home this year that “checked all the boxes,” McLean says. But they had to go to the very top of what they were willing to pay to do it.
The couple were renting a place in Lewes when they decided they were ready to become homeowners. “We wanted to get away from rent, and start building some equity,” McLean explains. They settled on a price range they felt comfortable with — $220,000 to $300,000 — and started their search in June 2019. It was months before the start of the pandemic but still, McLean recalls, homes were selling fairly quickly. “Even then, it was difficult to find a house,” he says, as he came to realize that “housing in this area … is a hot commodity.”
After unsuccessfully bidding on two homes, McLean and Whetzel made an offer on a three-bedroom, two-bathroom ranch just outside of Milton. They bid full price, $299,000, and the owners accepted a few days later. Settlement was in June.
“We ended up at the high end of what we could afford, because after seeing things in the price range we had decided on, we knew that we were going to have to pay more to get the standard we were looking for,” McLean says.
Despite having purchased a house in the midst of a buying frenzy, and the stress that came with having to make big financial decisions quickly in order to have a chance at being successful, McLean has no regrets. “By the time we’re ready to sell, I don’t know if we will come out way ahead,” he says. “But in the six years that we’ve lived in Delaware, even before the pandemic, things were growing exponentially. And we’re very near Milton, that perfect little town that’s close enough to the beach, but far enough away that you can avoid a lot of the headaches of Route 1. I don’t think that we’ll see a loss.”
Similarly, Gray, who is chairman of Southern Delaware Tourism and on the board of the Rehoboth Beach-Dewey Beach Chamber of Commerce, believes that his house on Red Mill Pond will hold its value.
“I’m very impressed with the real estate market in Sussex County, particularly in the last year,” he says. “It’s been really great to see how many people are wanting to move into this market because they realize the value not only of the property, but of the area itself.”