The headlines grabbed you.  "Foreclosure activity in March increases 5% over February and 57% over March of 2007!"

The reality?  Most of the foreclosure activity is taking place in Nevada, California, and Florida.  These are the states that had the fastest increase in home prices and the highest use of both Subprime loans and Option ARM loans, both made at very high loan to values.

How's Delaware doing?  Delaware ranks 34th in foreclosure activity among the 50 states and most of that activity is concentrated in the Wilmington area.  There were 192 foreclosure filings in Delaware in March according to RealtyTrac.  This includes about 140 NFS filings - Notice of Foreclosure - and 51 REO filings - Real Estate Owned - when a property is foreclosed on and repurchased by a bank.

Those 192 filings represent 1 foreclosure filing per 1,994 households in Delware compared to 1 per 538 households nationwide.  March also saw a 15.8% REDUCTION in filings compared to February, but it was a 34% increase over March 2007.

Foreclosures are a hard thing for the homeowner involved, especially someone's primary home, but we need to remember that Delaware is holding up pretty well in this housing crunch.

Potential Increase in the Transfer Tax Rate? 

Our legislators in Dover are pondering an increase in the Transfer Tax from 3% to 3.28% to help fund the Community College Infrastructure Fund for capital construction at all four (4) Delaware Technical and Community College Campuses.  Not only does Delaware have one of the highest real estate transfer taxes in the nation at 3%, but this foolish idea comes at at time when the market does not need another barrier to selling or purchasing a home.  Some thoughts from the Delaware Association of Realtors . . .

Real estate transfer taxes and fees have a negative impact on housing costs and, therefore, economic development.

Real Estate Taxes are regressive because the tax burden is higher for lower income households.

A household that moves frequently, for whatever reason, does not derive additional benefits or place additional burdens on public services (except for minimal administrative costs) as compared to someone who does not move, and should therefore pay similar taxes.

Using the proposed increase in the real estate transfer tax on a home selling for $150,000 the increase in tax would be an additional $420; on a home of $250,000 it would be an additional $700; at $350,000 another $980 and $1,260 for a home sold for $450,000.

Contact your representative in Dover to express your opinion:

Senate Democrat Offices: (302) 744-4286.   Senate Republican Offices: (302) 744-4048.
House Republican Offices: (302) 744-4171.   House Democrat Offices: (302) 744-4351.