The State of Housing in Delaware

Challenges and opportunities for those who seek them

BY GEORGE THOMASSON

DELAWARE’S HOUSING MARKET has undergone significant changes over the past decade, driven by its advantageous location and evolving economic conditions. Despite relatively low property taxes and proximity to major cities like Philadelphia and Baltimore, Delaware faces notable challenges in affordability, supply, and demographic shifts.

A key issue is the rising cost of homes, especially in desirable areas such as New Castle County and coastal regions in Sussex County. A pandemicera surge in demand for suburban and vacation homes has led to sharp price increases, particularly in places like Rehoboth Beach and Lewes. As of September 2024, the median home price in Delaware is approximately $385,483, according to Bright MLS, up considerably from pre-pandemic levels. These price hikes have intensified affordability concerns for firsttime buyers and lower-income families. Although Delaware’s housing market remains more affordable compared to neighboring states like Maryland and New Jersey, the price gap is narrowing.

The imbalance between housing supply and demand is a primary driver of Delaware’s housing challenges. The state’s growing population has outpaced the housing supply, with new developments largely focused on high-end properties. This trend is particularly evident in Sussex County, where many new homes cater to retirees and vacationers. In contrast, affordable housing development has struggled due to factors such as zoning regulations, rising construction costs, and a lack of incentives for developers to build lower-cost units.

Land-use policies also impact the housing supply. Northern Delaware, primarily New Castle County, is more developed, while central and southern parts of the state remain rural. Efforts to preserve farmland and open spaces, while environmentally beneficial, sometimes limit opportunities for new residential projects. Additionally, local opposition to higher-density housing further constrains supply.

To address these issues, the Delaware state government has implemented several initiatives. The Delaware State Housing Authority (DSHA) offers programs to assist first-time homebuyers with down payments and promotes affordable housing development. The state legislature has also established an Affordable Housing Production Task Force to tackle the housing crisis comprehensively.

Delaware’s housing market illustrates a complex interplay of rising demand, limited supply, and increasing prices. While the state continues to attract new residents due to its tax advantages and strategic location, the lack of affordable housing remains a pressing concern. Addressing these challenges requires coordinated efforts from both government and private sectors to ensure that Delaware remains accessible to residents at all income levels. As REALTORS®, we are committed to supporting buyers, sellers, housing providers, and renters in navigating this evolving market—give us a call when making that next move.

George Thomasson is the 2024 president of the Delaware Association of REALTORS®.

George Thomasson is the 2024 president of the Delaware Association of REALTORS®.