In spring, ‘For Sale’ signs typically spring up like tulips, with home sellers handing over the keys to buyers as both parties move on to their next stage of life.
But with low inventory and high mortgage interest rates, the residential real estate market remains in a wintery chill. Nationwide home sales in March ticked down 2.4% compared to the same month a year ago. In the First State, sales inched up 1.5% compared to last year, according to the Delaware Association of Realtors.
The protracted sellers’ market dates to the COVID pandemic in 2020. But while COVID has subsided from its heights, residential real estate has yet to return to robust health. Would-be buyers are frustrated by prices that continue to climb and too few homes to choose from.
Tyler Leitzke and his wife Lindsay began their quest in December, when they were pre-approved for a mortgage, the first step for prospective buyers. Delaware natives, they were renting in Philadelphia, where it sometimes took 40 minutes to find a parking space within walking distance of their apartment.
They took a three-pronged approach: harness artificial intelligence to research crime rates and market trends; team with a real estate professional with a proven track record; and put in lots of shoe leather, getting a feel for neighborhoods in Wilmington, their target area.
“We walked around the city: Midtown Brandywine, Trolley Square, Cool Spring, Happy Valley,” Leitzke recalls. “We want to be able to go to a coffee shop, go a restaurant, without getting in a car.”
They were smitten by an updated vintage home in Cool Spring. The only drawback was previous problems with a wet basement, revealed in the sellers’ disclosure.
“We weren’t the only people who loved the house. They got 12 offers,” he says.
Their agent, Brian Ferreira of Berkshire Hathaway in Greenville, advised them to go in with a strong bid but not to waive inspection if they had misgivings.
“We went $20,000 over asking but we didn’t want to waive inspection,” Leitzke says. “We didn’t get the house.”
“A tweet could go out at any time that would send the market into a spiral. We thought it was wiser to lock in now.”Tyler Leitzke, Delaware native and potential homebuyer.
After another month of looking, they found a townhouse in Midtown replete with engaging features: an en suite bath, second-floor laundry room, original hardwood floors, roof deck, and finished basement, “really nice, move-in ready.”
They made an offer, again going $20,000 above the list price. This time, they prevailed. The happy couple moved in this month.
Like most other buyers, the Leitzkes weren’t enthusiastic about the high cost of borrowing, currently 6.76% for a 30-year, fixed-rate mortgage. But the international tizzy over President Trump’s proposed tariffs made them nervous about the economy.
“A tweet could go out at any time that would send the market into a spiral,” Leitzke says. “We thought it was wiser to lock in now.”
Would-be buyers who have been holding off on looking for a home in hopes borrowing rates will fall are likely to be disappointed in 2025.
“The average 30-year fixed mortgage rate will spend most of the year in the 6s, with a short-lived spike above 7%, but never getting below 6%,” Greg McBride, chief financial analyst for Bankrate, said in a statement. “Continued economic growth and worries about inflation and government debt will keep mortgage rates elevated.”
Listings in New Castle County continue to move briskly, a median of 34 days listed compared with the March national median of 53 days on the market. Around 560 homes were newly listed on the market in March, an 11.1% increase from 504 new listings in March 2024. In Kent County, the median days on the market is 59; in Sussex County, it’s 56 days. The median price in the First State is $380,333, up 3.02% from 2024, for properties that include single-family houses, townhomes and condominiums.
Here’s a look at some recent listings:
In North Wilmington, a stone colonial overlooking a golf course at Du Pont Country Club offers 4,040 square feet of living space, including five bedrooms and five baths. The dated kitchen and baths are ready for the next owner’s personal touch. It’s listed at $895,000.
In Dover, a one-story, 2,510-square-foot three-bedroom, two-bath home has a gourmet kitchen and sumptuous primary bath. Outdoors, there’s a saltwater pool and hot tub. The price tag: $585,000.
In Rehoboth Beach’s North Shores, a recently updated first-floor canal-front condominium has three bedrooms, two baths and a large screened-in porch. All furniture and household goods are included in the $954,900 price.
Ferreira notes that even with pent-up demand, some home shoppers are wary of making a commitment. One would-be buyer got cold feet after the stock market plummeted 1,000 points in a single day.
“Our economy, as it sits right now, is unpredictable. Like the stock market, the real estate market does not like uncertainty,” he says.
First-time buyers are the most challenged because they can’t leverage the equity from an existing home. The inventory at their price point is in especially short supply.
“Homes in the $350,000-$400,000 range are selling very quickly,” Ferreira says.
Additionally, first-timers are often saddled with debt, which makes it hard to save money. “They are paying high rent. Many are paying student loans,” he says.
Some buyers are trying to mitigate higher mortgage rates by borrowing less money. But bigger down payments mean it takes longer to save for a home, according to an analysis by Upgraded Points, a credit card and travel site, that crunches numbers from Freddie Mac, the Bureau of Labor Statistics, and Zillow, a real estate website.
“In 2025, the typical American household earning the median income of approximately $82,000 could reasonably afford a mortgage of up to $213,145. With the median home price now at $361,293, this leaves a gap of $148,148 — requiring a down payment of 41%. Assuming the household saves 10% of its income and earns a 5% average return, it would take 12.8 years to save that amount — more than double the time required just a few years ago,” the report says.
In Delaware, it would take an average of 11.8 years to save for a down payment. The toughest market to break into is Los Angeles, at an average of 35.1 years to accumulate the cash for a bigger down payment. That’s a marked contrast to the past decade, when homebuyers could expect to save enough for a down payment in about six years.
Some buyers are getting help from government programs for first-timers, incentives from municipalities, or generous parents. One lucky buyer in suburban New Castle got an unexpected boon from the seller, a man he had never met.
“The seller was a veteran who took an offer that might not have been the best deal but he wanted to help the buyer, who also was a veteran,” Ferreira says. “It’s not always about the money.”
Indeed. Successful strategies include waiving home inspections and scheduling closing for a few months after an offer is accepted to give the sellers more time to relocate. “Or allow them to live in the house 30 days rent free while you pack your things,” he says.
Still, cash is king. The most favored incentive for buyers is sellers who agree to pay both halves of Delaware’s 4% transfer tax, typically split 50/50 between buyer and seller, says Shalini Sawhney of Burns and Ellis in Dover.
Sometimes, buyers will agree to pay the first $5,000 in repairs, or ask the sellers to assume financial responsibilities only for major repairs.
“The little items—a loose valve on the toilet, an electrical outlet—the buyer takes care of. The seller would take care of anything major, like a roof,” she says.
“It’s been on the market for 12 days. Why isn’t it selling? We have the expectation that homes sell in a few days but that isn’t always the case. With interest rates up, people don’t want to put in more money.”Shalini Sawhney, Real Estate Agent for Burns and Ellis in Dover.
Sawhney attributes low inventory to high interest rates.
“Our inventory is suffering because people don’t want to leave a 2.5% interest rate for a 7% mortgage,” she says.
Some buyers are circumventing interest rates by paying cash, as in recent out-of-state buyers who paid $850,000 for a home in Kent County.
So, who is selling? Ferreira and other real estate pros note that estates have become a significant source of inventory as heirs put homes on the market. Sawhney points to recent listings by affluent seniors who are selling homes priced at $700,000 and up and relocating to second homes at the Delaware beaches or Florida.
“They’ve raised their families and now it’s time for a new family to enjoy the house,” she says.
Sawhney sees a more balanced market evolving, with fewer bidding wars. Homes in disrepair or sited in undesirable locations will languish.
“It’s been on the market for 12 days. Why isn’t it selling? We have the expectation that homes sell in a few days but that isn’t always the case,” she says. “With interest rates up, people don’t want to put in more money.”
Her advice to would-be buyers?
“Don’t get discouraged,” she says. “If it’s meant to be, it will be yours.”
