"How's the Market?"

  Oh Oh, Field is linking to the 3 Stooges, I better get something up there that's serious right away.  Based on what I've seen out there in the blogoshpere, when it comes to real estate blogs there must be a rule that they have to be deadly dull because that's exactly what most of them are.  I expect any day to receive a visit from the blog police ordering us to talk more about interest rates and bursting bubbles.

   So, to keep us in the fraternity and to show a little gravitas here is our answer to that question every real estate broker gets at least once a day; "so, how's the market?"

   The market is OK. Remember now, we're in Mid Coast, Maine.  I'm not talking about Boston metro, New York, San Francisco or anywhere else.  The Mid Coast, Maine market is OK.  Not great, nowhere near what it was from say, summer of '03 through about late summer of '05.  But there was never a bubble here, we didn't see a lot of buying on speculation.  We had a strong market with lots of buyers as befits an area so desirable to live in.  Every reason why people wanted to move here last year or the year before is still valid. No major employer has left the area, nothing is really depressing our market with the possible exception that there has been some effect from rising interest rates.  More on that in a bit.

   What has changed is that there may have been some of those negative market factors in areas from which our buyers come.  Fewer of those buyers can sell their homes or those that do realize a lower gain.  That translates into fewer buyers for us.  Fewer buyers equal lower prices.  But, there are still plenty of buyers. Since most of those buyers were just sellers, they have adjusted to the new market.  Based on data from sales this year, prices in our area are running about 10% to 20% lower than where they were 18 months ago. For those sellers that have adjusted to that reality a successful outcome is the result.

   Now a word about interest rates. The Federal Reserve raised interest rates to stave off inflation. They probably could have left things alone, the spike in oil prices took care of inflation. But they can't help themselves, they're regulators, they need to regulate.  At present the consumer price index inflation rate has declined to 2.1%. and the personal consumption expenditure (PCE) core price index has declined to 2.3%. Combine this with a slowdown in the housing market and the Feds should be looking to at least slightly lower rates in the near future.  This should be all the impetus needed to get markets to our south moving a little faster. Albeit at an adjusted price level.

   So, to summarize, this is a good time to sell, as long as you didn't buy in the last 2 or 3 years. If you bought before then and assuming you were prudent at that time, you'll do OK now.  Don't compare your home to what your neighbors home sold for 2 years ago, even though yours is nicer. If you're a buyer, this is a great time to buy, there's plenty of inventory from which to choose. The buyers that get frustrated are those that expect deeper discounts than what the market has adjusted to.

   If you're thinking of buying or selling in the Mid Coast, please feel free to call any of our brokers or myself and we'll be glad to discuss this with you at length.

   Now, to be really serious, Field and I have a disagreement. He's trying to tell me that Curly was the most important of the Stooges.  Of course he's wrong, Moe was the key guy. Without Moe, the whole thing doesn't work. Curly was replaced, Moe never was.  What do you think?

Jim Cosgrove

Comments

[D. Mitchell]

Curly was the greatest Stooge. By far.

[Tom Field]

The Stooges were never the same after Curly left. Schemp? Curly Joe? I don't think so.

I totally agree with your thoughts on the market though. There are a lot of potentially good deals out there for the right buyers.