Home sales in the Delaware and Maryland Eastern Shore beach communities saw a huge spike in 2020, and real estate agents and buyers alike say it was largely fueled by the pandemic, with buyers, many from the D.C. area, seeking a refuge away from the city but within driving distance of home.
The majority of buyers last year were second-homebuyers, not investors who typically buy at the beach with intent to rent the home to vacationers, according to Long & Foster Real Estate. Most buyers were buying for their own family’s extended use.
“The overwhelming factor that we’ve experienced is the COVID pandemic. The pandemic has made our area hugely desirable because it is just a short drive from you, with buyers coming from the Washington, D.C., metropolitan area and also the Baltimore area,” said Christi Arndt, sales manager at The Leslie Kopp Group with Long and Foster in Bethany Beach, Delaware.
In Delaware’s Rehoboth Beach, there were nearly 1,000 home sales in 2020, a 46% increase from 2019, based on sales data by home listing service Bright MLS. Sales in Bethany Beach and Fenwick Island, Delaware, were up 30%, with 390 closed house and condo sales last year.
There were more than 2,000 sales last year in Maryland’s Ocean City, a 33% increase.
Prices surged as listings declined
Prices were higher as a result of brisk sales, and a shortage of homes for sale.
Online real estate firm Zillow reports the median price in Lewes, Delaware, as of December was almost $419,000, up 6% from a year ago. At the same time, the number of homes for sale was down more than 30%.
The median price of a home listed for sale in Rehoboth Beach in 2020 was almost $600,000, a 15.1% increase from 2019, while the number of homes for sale was down almost 43% from a year earlier, Zillow says.
Ocean City listings in December were down 38% from a year ago, and the median price of more than $347,000 was up 10.1%, according to Zillow.
Those median prices are deceptive since they cover vast swaths of each community, including properties that are farther inland.
Drilling down into oceanfront houses and properties within a few blocks of the beach, listings can easily top $1 million, based on current Trulia listings. There were 133 sales of $1 million-plus homes in Bethany and Fenwick in 2020, according to Bright MLS, a 47% increase from 2019.
The price of entry for oceanfront and beach-walkable condominiums can be less.
Beach community homes sold much faster last year.
“2020 was a strong year for real estate in the Rehoboth Beach and Ocean City areas, with median days on the market cut in half,” said Bright MLS Director Christy Reap. Most homes listed last year sold in 30 days or less.
Vacationers turn into buyers
And the pandemic also turned longtime Delaware and Maryland beach vacationers into buyers.
Arienne and Sean Reilly, of Alexandria, Virginia, toyed with the idea of buying a second home for several years. The pandemic sped up their plans, and last year they purchased a beach home in a quiet area of South Bethany near a canal.
“The pandemic forced us to slow down, rethink our priorities and hunker down as a family. Finance rates were crazy low and having a safe escape for our family and friends was even more important with the pandemic,” Arienne Reilly said.
Michael and Dea O’Hopp, whose primary residence is in Frederick, Maryland, were among beach homebuyers in Delaware last year, purchasing a single-family home with ocean views in Fenwick Island. After renting for 10 years, they say high-end rentals that met their needs became scarce.
“We both work from home, however we believed that long long-term, the trend will be for a more remote workforce, which will make the Delaware shore more attractive and drive up property values,” said Dea O’Hopp.
“Beach properties will only become more scarce.”
The beach communities’ full-time, or at least more than part-time population — those spending much more than just a week or two in town — changed last year because of the pandemic. The reason: Professionals, many from the D.C. area, can work from anywhere.
“I can’t tell you how many times I’ve been showing property, and I look to the left or look to the right and there is someone on their laptop in a screened porch or someone sitting on their deck on a conference call,” said Arndt said, adding that she also saw parents with children who were taking virtual classes or home schooling.
‘It’s a seller’s market’
Sales could be even stronger in lower Delaware and on Maryland’s Eastern Shore, if there were more properties for sale.
“Overall, sales counts turned around in May 2020 and have grown at very high rates since. Total listings have decreased, suggesting that homes are selling at a very fast pace. Listings are coming down quickly due to the speed at which homes are being purchased,” said Dan Handy, an economic data analyst at Zillow.
Joanne Young, a broker with Berkshire Hathaway’s HomeServices Gallo Realty in Bethany Beach who has been representing buyers and sellers in the area for more than 30 years, agrees.
“I can tell you that it is a seller’s market and we do not have enough inventory for our buyers. My last sale closed $30,000 above list (price) with multiple offers, and I think the pandemic has had a bearing on the market,” she said.
Tax-favorable Delaware has made its beach communities popular with retirees, or buyers who are buying now with plans to make that home their main residence when they do retire in a few years.
The winter months are typically when beach community homebuyers start looking. Early indications point to more of the same for strong sales and rising prices in the Delaware and Maryland beach communities this year.
“So far in January there has been no slowing in buyer demand and the continuation of very limited inventory, so prices are still rising,” Arndt said.
The highest price single-family listing in Rehoboth is currently a five-bedroom home on the beach priced at almost $6 million. An eight-bedroom beachfront home in Bethany is on the market for $5.6 million. A bayside home in Ocean City is listed for $2.3 million.
Buyer interest in traditionally vacation home communities in general has risen sharply. Zillow reports page views of for-sale listings in 20 popular vacation and second-home destinations, most of them beach of lake communities, are up almost 50% from last year. Ranked No. 7 on the list is Salisbury, Maryland, which is roughly 30 minutes from the beach.
Pending sales in more than half of vacation-home markets at the end of 2020 were up at least 30% from 2019.