Shopping for a home in coastal Sussex County? If you haven't followed the real estate market for a few years, brace yourself for some serious sticker shock.Prices in and around Delaware's beach towns have skyrocketed over the past four years. Don't even start looking unless you're prepared to spend $300,000 to $500,000. If you want something close to the water, expect prices of $750,000 to $1 million. Oceanfront homes cost even more.
But real estate agents say there are still a few locations where buyers can find relative bargains in the $150,000 to $250,000 range.High on that list is the "back-bay" area, which stretches along the western shores of Rehoboth Bay, Indian River Bay and their tributaries. Accessible from Route. 24, a two-lane road off Route 1 between Lewes and Rehoboth, the back-bay area includes Angola, Long Neck, Oak Orchard and other waterfront communities.
"You get more bang for the buck the farther out you go," says T.J. Redefer of Century 21 Rehoboth Bay Realty Co. His office on Route 24 sees a lot of shoppers who are looking for reasonably priced vacation homes, and Redefer assures them that they're available -- as long as they don't mind driving 12 miles to go to Lewes or Rehoboth.
Here are a few examples of what was recently available or sold in the back-bay area:
* Winding Creek Village -- A brand-new three-bedroom rancher on a wooded half-acre lot just two blocks from Guinea Creek, a tributary of Rehoboth Bay. It features a formal dining room, 2 1/2 baths, hardwood floors, walk-in closets, a two-car garage and many modern amenities. Asking price: $229,900.
* Herring Creek Estates -- A 3-year-old rancher on a half-acre about six lots away from the community's waterfront recreation area on Hopkins Prong, a tributary of Herring Creek. It features three bedrooms, two full baths, a great room with cathedral ceiling, a fireplace, deck, garage and other amenities. Selling price: $177,000.
* Angola-By-The-Bay -- A salt box with cedar siding on a 50-by-100 lot a short walk from the community marina. It features three bedrooms, two full baths, a fireplace, a screened porch and more. Asking price: $138,500.
Though price is a big selling point, these communities (and others, such as Pinewater Farm and Warwick Park) are also popular for their boat ramps and slips, bayside park areas, crabbing piers, swimming pools, and reliable infrastructure such as relatively new roads and water systems. Such amenities may make homes in developments more attractive than similar properties outside developments.
Keep in mind that the "bargain" tag doesn't apply to properties directly on the water, which command prices far higher than those on properties a block or two from the bay. Waterfront properties, usually with exclusive docks and unobstructed water views, can cost $400,000 to $600,000 -- or more.
But properties less than $250,000 have great growth potential, agents say. Just as bayfront homes have risen in value like those in the ocean-coast towns, back-bay bargains are bound to appreciate as demand increases in coastal Sussex.
"We used to see a lot of retirees and people who wanted vacation homes, but now we're seeing more year-round families (in the back-bay area)," says Kathy Lougheed of Burton Realty.
Lougheed, who has sold real estate in the back-bay area since 1985, says increased interest in that area has already caused increased prices, but it's still affordable. She cites Warwick Park as an example. Situated on Indian River, the community features single-family homes on large lots for $150,000 to $250,000, as well as a waterfront park, boat slips, a crabbing pier and wooded picnic areas. "It's definitely a bargain," Lougheed says.
Broadkill Beach
No matter how affordable back-bay properties might be, there will always be buyers who prefer a "beachier" setting. For them, Broadkill Beach is the place to shop.
Situated on the Delaware Bay north of Lewes Beach, Broadkill is heaven for those seeking solitude. But it could be hell if you're looking for nightlife -- or even a grocery store.
Broadkill's isolation is one reason bargains are available. Those willing to drive about five miles off Route 1, through undeveloped countryside and the Primehook National Wildlife Refuge, can find bargains less than $200,000 within walking distance of the beach.
"When people get here, it's not what they expect," says resident and real estate agent Harry Wooding of Re/Max Realty. "It's not just little cottages and fishing huts."
Broadkill does have its share of older, smaller homes, but many modern homes now grace the half-mile wide strip. Some, like Wooding's, are built on pilings, protecting them from flooding and providing gorgeous views of Primehook Refuge's and the Delaware Bay.
But the buying frenzy that affected all coastal markets in the past few years has left few Broadkill properties on the market. In March there were only two, at asking prices of $259,000 and $359,900. Wooding says, however, that buyers will still be able to find bargains for around $150,000 when more properties become available.
Another beachfront bargain area is Primehook Beach, just north of Broadkill. A bit more rustic, Primehook has yet to see the surge in sales that Broadkill has, but Wooding predicts it too will become a mecca for bargain-hunters.
Milton
Although neither beachfront nor bayside, Milton, about 10 minutes inland from Broadkill, is another promising area for sticker-shocked shoppers. Considered by some real estate agents to be the next Lewes -- a once-sleepy fishing town where gentrification has driven property values through the roof -- Milton offers Victorian-style homes for half the price. A five-bedroom, two-bath Victorian built in the late 1800s sold recently for $190,000. A two-bedroom, 1 1/2-bath Victorian went for $110,000. And a renovated three-bedroom, three-bath Victorian, built by a ship captain in 1846, just sold for $99,900.
Though prices have gone up, "You can still get a lot of house for $120,000 -- and no more than $200,000 for a Victorian," Wooding says. "Ten years from now, a lot of people are going to look back and say, 'Why didn't I buy a house in Milton?'"
Other Areas
Beyond the ocean resorts, there are many other locations where buyers might find waterview bargains. Especially throughout the back-bay area, where numerous creeks, prongs, glades and guts meander off the main waterways, buyers can discover hideaways that harken back to an earlier time in both price and atmosphere. It's less expensive and less hectic out there, but just like everywhere else in coastal Sussex, properties sell quickly -- so, like shoppers rushing for the blue-light special, bargain-hunters have to be ready to pounce.
Looking for an even better bargain? How about a stunning two-story colonial with wrap-around porch and plenty of fancy features in a community that includes a golf course, swimming pool, marina and tennis courts -- all for around $250,000? Welcome to Baywood on Long Neck Road.
The catch? You have to pay about $5,000 a year in ground rent.
The concept of leased land is well established in the back-bay area, but it still divides buyers, sellers and real estate agents. Proponents say buyers can buy nicer houses at lower prices, noting that ground rent pays for features only upscale communities offer -- full-time security, lush landscaping and the aforementioned recreational amenities.
Though some agents and buyers are uncomfortable with the idea of placing a $250,000 home on leased land, proponents note that the leases are usually long-term and automatically renewable.
The Pot-Nets communities on Long Neck Road are the granddaddy of the leased-land concept. Starting with the original Pot-Nets in the early 1960s, the Tunnell Companies now manage six Pot-Nets communities. They encompass about 3,200 home siteson the Long Neck peninsula.
Pot-Nets communities feature what used to be called mobile homes. (Now the industry calls them "manufactured homes.") But with its new Baywood development, Tunnell has brought the leased-land concept to the luxury market. Featuring manicured quarter-acre lots with modular homes -- like stick-built homes, but constructed in factories, then trucked to the site -- Baywood, with its white picket fences, brick walkways and old-fashioned street lamps, has the look and feel of a Disneyworld-like "hometown."
Prices for houses range from $150,000 to $290,000. Remember: That doesn't include annual ground rent of $4,200 to $6,600. Some agents and buyers may balk at the leased-land concept, but proponents say ground rent doesn't seem like a big expense to buyers from states where property taxes range up to $5,000 a year.
Roger Smith, who sells homes in Baywood, says buyers like the lower up-front costs that result from not having to pay for a lot. "They can take that money and invest it," he says.