New Castle County police say the shooting started before 1 a.m. Sunday outside of a home on Louis Court in the Salem Woods development.
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Police say a 22-year-old man was shot and killed. He has not been identified.
The shooting also injured a 17-year-old male and a 19-year-old male. Both victims remain hospitalized in stable condition.
Neighbors describe hearing shots like fireworks and seeing more than 100 kids run out of the house.
One neighbor reportedly used a shirt as a tourniquet for one of the victims.
The gunfire rang out throughout the block -- one of the bullets went through a neighbor's house and into her stairwell. She says she's lucky to be alive.
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"My granddaughter is the one who came running to me and said, 'Mom-mom, that was gunshots,'" recalled Donna Votta.
One neighbor counted at least six bullet holes in his car. Another neighbor had one in her house.
Votta saw the victims get carried away.
"It was very frightening. This is a quiet neighborhood and this was very unnerving," she said.
Neighbors say there are parties at the house nearly every weekend, but they've never turned violent before.
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"This is the first time something like this happened. It's been nice; I've been here 24 years and nothing like this ever happened," said Pete Sierra.
New Castle County police are interviewing witnesses and reviewing surveillance video.
Anyone with additional information is asked to contact Detective Michael McNasby at 302-395-8110.