Above: Each coastal town in Delaware has a distinct personalty. Lewes has a historic district with homes dating to the 17th and 18th centuries. Above is the John Penrose Virdin House in Lewes, built in 1888 and currently serving as a B&B. O&A file photo.
By Pam George
By 2013, real estate prices had dropped due to the 2008 housing market collapse. The Pocono vacation home that my husband and I bought in 2005 had lost $30,000 of its value. However, after it sold, we realized that the beach home I’d wanted was within reach.
Using equity in our Wilmington house, we purchased a two-bedroom condo for cash. It was a fixer-upper west of Route 1 — but so close, you could walk to the highway. We paid $170,000. Today, our neighbors are getting $320,000-plus.
To be sure, a lot has changed in the last decade. The plethora of new communities west of Route 1 has made that area more appealing. Mortgage rates have fluctuated, and so have home prices. Since the county’s property taxes are low, New York and New Jersey buyers have joined the usual D.C.-area folk who’ve long bought in Delaware.
“The demand exceeds the supply,” says Compass real estate agent Robin Gordon Bunting.
If your New Year’s goal is to purchase a beach property in 2025, do more than scan Zillow. “The more research you do, the better,” says Lee Ann Wilkinson with Berkshire Hathaway Homeservices.
Ask yourself and the experts some key questions.
Does the Area Matter?
In short, yes. Wilkinson knows sellers who relocated to Sussex County for its low taxes only to learn that the community doesn’t match their lifestyle or needs.
“They came down, looked at three builders’ models and bought something,” she explains. “Two years later, they say, ‘We don’t want to live here. We want to live over there, where our church is and where we spend all our time.’”
Ocean block properties are the most desirable — and priciest. This seven-bedroom contemporary in Dewey Beach is priced at $4,799,000. Photo courtesy Carrie Lingo Team.
Your interests will narrow the focus. For instance, boat owners may want a dock or a nearby marina, while golfers wish to live on or near a course. People with chronic illnesses will want to be close to the hospital. Foodies want access to restaurants and grocery stores.
Moreover, Delaware’s beach towns have distinct personalities. Lewes has a historic downtown and year-round vibe, while many of Fenwick Island’s shops and restaurants are still seasonal. The southern beaches are quiet. Admittedly, Ocean City is just over the state line.
It helps if you’ve spent time in the town. I’d only vacationed in the Lewes-Rehoboth Beach area. So one month in the off-season, I rented a historic home in the Lewes downtown district to learn what living in “Mayberry” was like.
For those who don’t know the area well — or who are open to exploring unfamiliar towns — Bunting suggests spending a day or two with a real estate agent for a tour. Jenn Barrows of Barrows and Associates, part of Monument Sotheby’s International Realty, would agree.
“We call it ‘Welcome to the Neighborhood tour,’” Barrows says. “We introduce them to the towns.”
Although the coast isn’t long, most real estate agents specialize in certain sections. So, if you know where you want to buy, consider using an agent with a lengthy list of listings in that area. Local agents “will know each town or community intimately, and through getting to know you and what you desire, they will be able to help identify the right fit,” says Shawn McDonnell on the Carrie Lingo Team at Jack Lingo Realtor in Lewes.
He recommends staying in several towns at different times of the year — summer and winter. And don’t be afraid to talk to locals and ask questions.
Should I Buy East or West of Coastal Highway?
East of Route 1 is prime real estate because it’s closer to the shoreline, and many of Wilkinson’s clients look here first. But those unfamiliar with housing prices may experience a reality check. Moreover, there is a long section from just south of Kings Highway in Lewes to Holland Glade Road with no beach access. (Some have bike trails.) That’s also true of several neighborhoods north of Lewes. These residents must use Route 1 to reach Cape Henlopen or Rehoboth Beach.
Bayfront at Rehoboth on the Rehoboth Bay boasts an abundance of amenities. This five-bedroom property at 1370 Marsh Island Ave. is listed at 1,175,000.
“I ask people: ‘How often do you want to go to the beach?” says Justin Damadio, an agent with Iron Valley Real Estate in Ocean City who represents Sussex County buyers and sellers. Remember that a waterfront view isn’t limited to the ocean. There are bays, marshes and salt ponds sprinkled all along the coast.
You’ll get more bang for the buck if you go west. “Most of my clients decide that 10 to 15 minutes west will work if they can get the home that meets their needs,” Bunting says.
Do I Prefer a New or Existing Home?
While there’s been an explosion of new homes west of Route 1 in Millville, Ocean View and Millsboro, there’s also been a lot of new construction in Lewes, east of Route 1 off New Road and Kings Highway.
New developments appeal to buyers who want a fresh start without having to do renovations. That’s especially true for retirees tired of their 50-year-old Colonial, Wilkinson notes. Moreover, many new neighborhoods have amenities, including pools, clubhouses and tennis courts.
The community may dictate which builder you use. In Showfield and Olde Town in Lewes, you can choose — unless the builder owns the lot, Wilkinson says. You can also select your builder if you buy a tear-down home or a vacant lot in a town.
The Rehoboth Beach Yacht & Country Club appeals to golfers and marine enthusiasts. This home at 12 Blackpool Road sold for $1,200,000.Photo Barrows & Associates.
Remember that most new neighborhoods have homeowner associations, Damadio says. Rules and regulations may dictate the color of your door and whether you can fence a yard for your dog. Read the documents carefully before you buy.
Bunting recommends working with a local agent if you are considering new construction. Barrows agrees. The onsite agent’s primary responsibility is to the builder. “We’ve had to really go to bat for our clients and light a fire under a builder to fix things,” Barrows says.
Wilkinson appreciates Schell Brothers because they respect the buyer’s agent. “When the market was down, Schell Brothers went out of their way to encourage realtors,” she says. “That’s why we like them so much.”
Your representative can help you decipher the model variations, understand utilities and ensure home inspections are complete, Bunting says.
Investment or Private Residence?
A beach investment property is a short- or long-term rental home. Here’s where the homeowner’s association may present an issue: Boards are increasingly restricting the length of stay. (Blame Airbnb.) Damadio knows of one that limits stays to a month.
I can vouch for the community’s concerns. I’m on the board in my development, and our mission is to tackle the issue.
Regardless, many beach home buyers like having the option to rent. While some listings may detail rental income, others do not, and the rental agency might be unwilling to share the information with prospective buyers.
“We go online. We look to see what other rentals charge. We call,” Barrows says. “If it’s never been rented, I get estimates.”
The demand for beach rentals has dipped since the pandemic, Barrow says. Vacationers can fly to Europe for less than the cost of a beach rental. Of course, the pendulum will swing depending on the world economy.
Is a Local Lender Best?
Yes, maintain the experts. “Borrowers can get the same competitive rates plus knowledge of the local community,” says Wm. Jack Riddle, president of Community Bank Delaware.
Many communities have unique characteristics, he adds. For instance, Sussex County has several areas where residents lease the land. Lewes Beach, Pot-Nets and Rehoboth-by-the-Sea are three examples. There are also neighborhoods with manufactured homes, which can be challenging to finance.
“Without this local knowledge, settlements can be delayed, deadlines missed, and sometimes purchases lost,” Riddle says. Too often, issues arise late in the process, which causes stress.
A local lender will also know if comps in a neighboring community don’t apply to the house under contract. “They will know the difference between the beachside of Cedar Avenue and the non-beach side,” Wilkinson says of the street on Lewes Beach. The representative can question an appraiser if the numbers are out of line.
The more you know, the happier you’ll be. For instance, I knew where I wanted to be because of my experience vacationing and writing about the beaches. And having had two houses — and the upkeep that goes with them — I wanted a condo. With two big dogs, I also needed a lot of land. Our community has about 40 acres with trees and landscaping. I may never see the ocean when I visit, but I nearly always see the inside of a fantastic restaurant, from Lewes to Rehoboth. And that’s my priority.
In other words, I have no regrets.
