[caption id="attachment_36138" align="alignleft" width="1000"] Photo courtesy of Realtor Mary Ann Benyo[/caption]

By Pam George
Special to Delaware Business Times

In the 1980s, Mary Ann Benyo and her partner wanted to open a bed-and-breakfast in Lewes or Rehoboth Beach. They met with a real estate agent, who gave them a reality check. "We saw the prices of the properties, and said, "˜Oh,'" Benyo recalled.

The agent suggested Milton, which is about 13 miles from Rehoboth Beach. The women successfully ran their B&B in Milton until 2000. Over that time, Milton became known as beach-area real estate.

Today, Benyo has moved to the new beach frontier: Millsboro, which is about 20 miles from Rehoboth. "I used to think it was the middle of nowhere," said Benyo, who is now a real estate agent. "Now that I live here, I feel quite happy about it. It's central to everything."

Benyo isn't alone. Millsboro has the highest growth rate - 12 percent - of any municipality in inland Sussex County, according to U.S. Census Bureau statistics, and the second-highest number of residential building permits of any city in Delaware.

That's not to say construction has slowed along the coast. For proof, take a stroll around Rehoboth, where new homes priced at $1 million and up are replacing older homes.

Meanwhile, Showfield is one of several new upscale communities along the Gills Neck Road corridor outside downtown Lewes.

In the resort towns and inland areas, builders and developers are addressing the finite amount of available land and the increasing demand for new homes.

Fitting the new with the old

During the Recession, new construction in Sussex County ground to a halt. Over the past five years, it's regained momentum.

"New construction - across the board, both in-town and outside of town - is a very active segment of the market," said Shaun Tull, a real estate agent specializing in Rehoboth. "Most buyers we work with prefer new construction if they have a choice.

Because land is a premium in the city of Rehoboth, developers are tearing down old properties and building on spec.

"It's sad to see something old with Rehoboth charm go," said real estate agent Carrie Lingo. "At the same time, the old house may need an entirely new HVAC or something of that nature."

Old homes on multiple lots attract developers who can put up more than one house, Tull said. Most of these are custom homes. "Some of the homes are selling prior to completion. Some have even sold prior to construction," he said.

Lee Ann Wilkinson, a Realtor specializing in the Lewes area, said a different scenario is playing out in that city. Tear-downs are not an option in the historic district. Nevertheless, some buyers don't want an old Victorian. "There are so many people who want to be in the town, but they don't want an old house," she said.

Consequently, developers are jumping on available lots for new projects. Consider Mariners Retreat off Fourth Street, which is between the historic area and Pilottown Village, a residential community just inside the city limits.

"When we're finished with that project it will be some of the most valuable non-waterfront real estate in historic Lewes," said Randy Burton, owner of Burton Builders, which specializes in both restoration and new construction.

Most of the new construction near Lewes is along Gills Neck Road. Governors, which will have townhomes and single-family homes, sold more than 20 homes before the launch party, Wilkinson said.

Showfield is being built on 132 acres formerly owned by Otis Smith, a former Lewes mayor. He also owned the long-gone menhaden fisheries that once fueled the town's economy.

Showfield requires no builder tie-in or timeline. "It's an anomaly right now," Lingo said of the approach. "But Showfield is the more premier project on the Gills Neck corridor."

Of the remaining 166 lots, the prices range from $324,900 to $499,900. "We are almost 70 percent sold out," said Lingo.

High-end markets

Farther south, Fenwick Island and Bethany Beach are on slender strips of land. Development by default is moving up Del. 54 and Del. 26.

Not all of the homes in these areas are in the $200,000 to $300,000 price range, which is a sweet spot for younger buyers and retirees on fixed incomes. Take a three-bedroom home for $409,900 in Ocean View, for instance. Another is listed for $579,000.

Even inland, a water view makes a difference, regardless of whether it's a bay or tributary, Tull said.

In The Peninsula in Millsboro, located on the Indian River Bay, new single-family homes start at $520,900. Like many inland developments, The Peninsula is packed with amenities. The bayside community has a Jack Nicklaus golf course, a water park and a clubhouse.

"It's niche market," Tull said of the resort mentality in a gated community. "You really have to buy into that lifestyle."

In Benyo's real estate experience, inland buyers are happy with their choice to locate miles from the beach.

"The people who already live in the inland area and want to move for whatever reason - they need a bigger house or smaller house - want to stay inland," she concluded. "They want to move from Millsboro to Frankford or Dagsboro. They don't want to move near the beach. There's too much traffic. It's too expensive."

Like Benyo, they're learning that they can get more bang for the buck by just looking west.