Check out this article featured in today’s Cape Gazette:
Developer says local housing market is down but not out
Schell optimistic despite ugly figures
by Tom Walsh
The housing crisis that has gripped the nation hit home this winter in Sussex County, leaving developers and construction companies with gloomy sales figures and a high stock of unsold inventory.
Despite the market being in the doldrums and a degree of uncertainty surrounding the industry, however, one local developer is still optimistic about the future of housing in Sussex.
Speaking in front of 150 Realtors at a winter expo held in early February at Independence clubhouse, Schell Bros. President Chris Schell outlined the problems and successes the industry has faced in previous months.
Stating that the current situation is worse than that of the Great Depression as it pertains to the housing market, Schell said that at first glance, the bad news might seem overwhelming.
“The housing decline we are living through right now is the worst in recorded history,” he said. “For people outside the industry, it’s hard to understand just how bad it is.”
Comparing statistics with that of the auto industry, Schell said the effect on the housing market has been hideously ugly. “For some perspective, the auto industry experiences a 30 percent decline in sales over the period of several months and they need to seek government assistance. Housing [new home sales] has seen a 76 percent decline in sales over a period of three and a half years. I can’t remember the last time I heard of a major industry experiencing a sales decline that large,” he said.
Schell said that usually a 20 percent decline is considered catastrophic. In Sussex County, he explained, figures are not much better than nationwide averages. Although Sussex is supported in large part by tourism, Schell said a healthy housing industry is also an important revenue producer. Right now, said Schell, anything that helps housing will help Sussex.
“Many people don’t realize how many jobs and industries are tied to housing,” said Schell. “Much of our unemployed labor force in Sussex is composed of people who lost housing related jobs.”
Clouds lined with silver
After reporting the negative trends, Schell was quick to say the figures may not be as bad as they seem.
He said that since November, when new-home sales reached a record low, the market was fortunate to sustain periods of growth. Nationwide, December showed an unexpected increase of 6.5 percent in home sales, with Sussex also seeing promising figures.
Additionally, he said, the economic stimulus bill passed in mid-February might boost sales in Sussex. He explained that the passage of the bill was much needed not only to restore confidence but also to stop a demand spiral in which potential homebuyers sit on the sidelines waiting for home prices to reach their lowest point.
If market stability is indeed on the horizon, Schell surmises Sussex County will be poised for a surprising rebound. He said low property taxes and a central location between Maryland and New Jersey will draw many retirees seeking a more relaxed lifestyle with a lower cost of living.
Unfortunately, until the economy recovers, he said, that potential market is essentially stuck. Once the market starts to loosen up though, he said, Realtors can expect to see a wave of retirees buying homes in Sussex.
“I think home sales are due to rise regardless,” said Schell. Traditionally, a rise in home sales is one of the first economic indicators to start showing a positive trend during recessions, he added. “I can’t say exactly when [the housing market will rebound] as there are too many unknowns, but assuming plans put in place by our government are well received by the public, I think we could see housing bottom very soon.”
Visit Schell Brothers at: www.schellbrothers.com
