Rehoboth Beach Delaware is called the summer capital of the nation because we are a very common second home and entertainment venue for the powerful and influential people of Washington DC There are few people who earn more than $75,000 a year in DC professions that are not they frequent this area when they need privacy, space, fresh ocean air, and relaxation. It is no longer just the summer that attracts them, they come all year round. And it’s not just Rehoboth Beach anymore, they populate Lewes, Dewey Beach, Bethany Beach, Fenwick Island and all the little towns near the Delaware beaches.
For the last few years, all real estate, especially beachfront property or beach real estate anywhere, has been a phenomenal investment. Rehoboth area increases have been as much as 30-40% per year in the ocean block for the last few years! Part of this increase was just a recovery from nearly a decade of relatively flat rates of appreciation.
While Washington DC, along with many other cities, has seen real estate price increases of 15-30% per year for the past several years. While the rest of the country sees little to no appreciation in real estate values, DC has remained hot this year, though not as hot as last year. Most of the areas of our country have not had an appreciation in prices on average for this year, with the exception of small portions of some metropolitan areas.
The whole economy has cooled down. In general, the real estate sector is not expected to do very well in the coming years. In addition to residential real estate having been hit hard, commercial, commercial and industrial real estate has been languishing for the most part, not selling even at lower prices and even with commercial mortgage rates half what they were a few years ago. years.
This Delaware Resort area and Washington DC are predictably different from anywhere else. DC is where people turn when there is a national emergency or military expansion. We are seeing unprecedented buildups in the military, government, and private sectors as a result of our instant reaction to the attacks and the almost immediate national decision to mount a high-tech global war against terrorists and their allies. This area of Delaware Beach is a part-time bedroom, getaway, business meeting and bar community for Washington’s influential and powerful elite. Here they can get away and privately plan what needs to be done!
The Wall Street Journal published an interesting article “Where Housing Is Headed After the Attacks” on 09/21/2001 by June Fletcher and Danielle Reed about the future of real estate after the attacks. Before the attacks, real estate sales were the main factor keeping the rest of the economy from collapsing more horribly than it has. The attacks have severely shocked the global real estate market. The acquisition of residential, commercial, industrial and even government properties in major cities has been delayed or stopped almost everywhere. Nobody knows how long this will last, of course.
Since the New York, DC Pentagon and Pennsylvania attacks on the World Trade Center, the Pentagon and the attacks on the White House; we have reason to review many things. The general real estate markets around the world have been drastically affected since the war began, and the war may go on for a long time. Some, if not most, of the instant change in the real estate market was due to the banking industry, which was one of the hardest hit of all American businesses. Many of the offices in New York that were destroyed were central banking centers from around the world. We are now beginning to recover from banking difficulties. In fact, our in-house mortgage broker Prosperity Mortgage, using Wells Fargo funds, is up and running at full throttle with no issues. We have the lowest residential mortgage rates in 40 years right now. But the full technical recovery of the banking industry will take time.
The Washington DC real estate market, our feeder community, remains the strongest in the nation. According to Case, Shiller and Weiss, known as CSW; and affirmed by the New York Times as the leading residential real estate analysts in the world; we are moving further into a declining housing market for this country and others, with the exception of Washington DC CSW predicts that DC will appreciate and increase in appreciation more than previously anticipated. This prediction, of course, includes residential areas around the Washington, DC metropolitan area, such as Northern Virginia, Maryland, and, to a lesser degree, parts of Delaware and Pennsylvania. The bedrooms of those who run our national capital stretch a hundred miles from the center of the city. CSW is not forecasting the 20% annual property value increases of recent years, but is forecasting a 4.2% annual increase for the DC-related area now instead of the 3.8% increase they predicted before the horrors and attacks of 9/11. . They predict declines in values elsewhere and deeper declines than before in all other major markets.
CSW acknowledges that tourism in DC will be affected in part by the attacks. Personally, I know that Crystal City has seen increased traffic lately from tourists who have recently come to DC and want to see part of the Pentagon destroyed. Additionally, room rentals are only slightly affected in the Washington DC area, as tourists normally in DC for fall events have been partially replaced by visiting consultants and dignitaries. Along with upgraded appreciation predictions for the DC area housing market, CSW has further lowered its prediction for appreciation rates in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Los Angeles, Miami, Minneapolis, Nashville, New York, Orlando, Philadelphia, Phoenix, Portland, San Diego, San Francisco, and Seattle.
These are my personal predictions, based on over thirty years of property sales here in the tourist areas of Delaware. I also maintain an almost daily connection to developments in the DC real estate markets. Washington DC will experience an influx of highly paid professionals for the defense and research industries, as well as services related to computer security, personal security and warfare.
There will also be a huge increase in each and every internet-related business that services our government personnel and government contractors who will be fighting the new war. Much of this war will be fought with keyboard, mouse and joystick. These new high-tech workers and those already involved will be under increased stress and take pay raises for years to come as we wage a high-tech war on terror. These same factors and more will give greater reasons and funds for more people to visit our beach areas. As always, some of these visitors will decide to shop here. Visitors and new buyers bring others with them and now more of these visits are business related.
Washington DC firms and companies that are financially related to these firms will quickly add highly paid staff and subcontractors. This will require a huge increase in all types of service industry, as well as all relatives of the hotel industry. Higher-paid and more stressed war-related workers will, as always, seek vacation time, relaxation time, and nearby hangouts in Rehoboth, Dewey, Bethany, Fenwick, and Lewes. More and more of these highly paid people will also need to visit us more frequently, for longer periods of time, and increasingly throughout the year for myriad reasons. Many of them will move here and start working here from phones, faxes, laptops, and home computers. We are already seeing it happen. We, as a result, will need to have more and more of our resort infrastructure and more of our businesses open year-round. We will need to employ more and better trained people in all areas here and they will also need housing and services. We are growing up!
We will see an increasing rate of growth for those who telecommute from here on the beach, part time or full time. I already see a large percentage of our prospective clients and buyers now or soon working from home. Those who spend long weekends here in the beach area with a laptop and cell phone to attend to professional responsibilities are a growing group. Kate and I work from home most of the time. Our oceanfront neighbor is a mortgage broker and often she is on her balcony with her laptop and phone doing her business. Kate often works out throughout the day at the end of our pier. We are home workers and every month more of our clients are too. Several of our recent buyers work from home full or part time.
As a result of all these property appreciation factors; I wonder if our real estate in the Delaware Beach and Rehoboth Beach area will really outperform DC real estate appreciation once again.
By www.JodyHudson.com Copyright September 22, 2001