There’s a surge in sales of homes in the million dollar-plus range, fueled by lower prices, rising interest rates and a robust stock market.
“We have had deals for five homes over $1 million in the last 30 days alone,” says Stephen Mottola, who leads the Mottola Group at Patterson-Schwartz in Greenville. “We haven’t had that since 2007.”
A mansion on 12 acres in Pentland priced at $3.3 million garnered multiple offers in only two days on the market. In Wilmington’s tony Highlands neighborhood, two fully restored stately homes priced at $1.3 million and $1.5 million were under contract within a week.
George Hobbs of Brandywine Fine Properties/Sotheby's International Real Estate discusses luxury home sales.
George Hobbs of Brandywine Fine Properties/Sotheby's International Real Estate discusses luxury home sales.
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“Prices at the high end have become more realistic, which appeals to people who have cash and want perceived value,” Mottola says. “We are also seeing people taking cash out of the stock market and putting it into real estate.”
Sellers who had been holding out for top dollar are adjusting to the realities of today’s post-bust market, says Ashlee Reed Hidell of the Debbie Reed Team, a ReMAX agency in Rehoboth Beach.
“People are tired of putting their lives on hold,” she says. “They know buyers are educated and they appreciate sellers who are realistic.”
There’s lots of inventory available. In the 19807 zip code, which encompasses Greenville and Centerville, there are 14 listings in the million-plus range, according to Trulia, a real estate sales and information website. Delaware beaches are awash in high-end homes, with 84 listings at $1 million or above in Rehoboth Beach, 56 in Bethany Beach and 26 in Lewes.
Here is a look behind the For Sale signs:
- Located on 61 sylvan acres in Greenville, an 12,550-square-foot brick manor house built in 1939 is on the National Registry of Historic Homes. It’s appointed with random-width hardwood floors, antique hardware and a wood-paneled formal living room and library. In addition to nine bedrooms, eight full baths and a playroom, there are specialized spaces such as a designated pressing room. The estate also includes a farmhouse, tenant house, 24-stall barn with office and tack room, plus a pool, pool house and cobblestone courtyard. Priced at $6 million.
- Laurel, the only home in the First State designed by renowned architect Frank Lloyd Wright is on the market for the first time since it was built in 1959. The prince of prairie style was in his 90s when he designed an elegant, one-story home in North Wilmington for a DuPont engineer. The house, the original furnishings designed by Wright and its seven-acre grounds, are listed for $1.35 million.
- In Dover, a 6,000-square-foot Tudor-style manse in the fashionable Pennwood development boasts a sweeping, curved staircase and massive wood beams in the family room. The property is accessed through wrought iron gates and encompasses a pool, koi pond, English-style gardens and a waterfront gazebo. The listing price is $1.3 million.
- In Rehoboth Beach, a recently renovated 1927 cottage and separate guest quarters is three houses from the beach with views of Silver Lake. Its charms include a deck with hot tub, a fireplace flanked by custom, built-in bookcases, a billiards room and a kitchen super-sized to accommodate caterers and tricked out with wine storage and a built-in beer tap. The magic number? $2.575 million.
- In Milford, a 5,200-square-foot contemporary-style bayfront house on a double lot has heated marble floors, an elevator, an artist’s studio and a private walkway to Prime Hook Beach. The price is $1.59 million.
Across the board, prices are inching back up. In July, the median sale price in New Castle County is $185,000, compared to $174,000 for the same period a year ago. Homes aren’t sitting on the market as long, either. The average length of time has shrunk two full weeks, from 55 days last year to 41 days.
That said, F. Scott Fitzgerald was right. The rich are different — especially when it comes to houses. The list of amenities is longer, with an emphasis on fine finishes.
So, what makes a million-dollar home?
“It’s sex appeal,” says Bob Weir, CEO, New Castle County Board of Realtors. “When you drive up to a property, does it do something for you or not?”
The typical must-have list for high-end buyers includes such niceties as an in-ground sprinkler system, a security system and zoned HVAC systems, the better to keep all that square footage appropriately heated and cooled.
“Upper-end buyers migrate toward brick and stone and away from stucco,” Mottola says. “They want wonderful landscaping with uplighting outside and hardwood floors, lots of built-ins and incredible moldings inside.”
Among the recent sales is 12 Red Oak Road, a 1912 mansion that faces Rockford Park in Wilmington with such vintage features as coffered ceilings, sleeping porches, a bell system to summon servants and a chauffeur’s quarters over the garage. Originally listed at $1.3 million, the home went under contract at $970,000 within three weeks.
“The new owners plan to put $1 million into bringing the house up to its full glory,” Mottola says. “They will be wonderful stewards of a very important property.”
Weir says older homes in the city are gaining in popularity, reversing the trend toward large luxury homes in bucolic settings.
“Urban locations now have a lot more appeal because they are close to work, school and cultural centers,” Weir says. “People thought they would enjoy the time they spent commuting to their jobs and their kids’ activities from the country. In reality, you can’t take your time back.”
The upscale market started to perk up in May, when four New Castle County properties in the million-plus range went to settlement.
“Last year, there were none that month,” Weir says.
But not every seller makes a profit, he says. Owners who bought their homes in recent years likely took a ding on price. One of the May closings was on a 4,700-square-foot colonial-style home situated on an acre in Greenville. The price was $1.025 million, $205,000 less than the sellers paid for the property in 2009.
In July, the Debbie Reed Team sold a 10-bedroom, 12,000-square-foot waterfront compound in Rehoboth for $4.137 million, originally listed in 2008 for $6.5 million.
“We were the fifth listing agent and we listed it at $4.75 million, in keeping with the market,” Hidell says.
With far fewer comps at the high end, setting a price can be a delicate balance. That is especially true for unique properties, says George Hobbs, broker-owner of Brandywine Fine Properties Southey’s International, which listed the Frank Lloyd Wright house.
“For homes like this you have to take into account the historic significance,” he says.
Realtors note that decisive drops in prices are the norm rather than the exception. The owners of a Rehoboth Beach mansion with a bell tower and rooftop deck offering views of the ocean and bay trimmed $400,000 off their original $7.9 million list price. The property is still on the market.
For buyers who aren’t paying cash, the cost of financing jumbo mortgages -- defined as $417,000 and above — is getting more expensive. After historic lows, rates are now hovering at about 5.5 percent.
“If interest rates are going up, bonds are going down,” Weir says. “So, are buyers pulling out of bonds and buying real estate? Investors are always looking for opportunity.”
