Maine Real Estate Update

    Now that the April rains have stopped (a record 5 inches in Newcastle yesterday) and we await the May flowers it seems like a good time to assess where our real estate market appears to be heading here in mid coast Maine.

   The good news is that inventory levels, although still somewhat high, have dropped.  At this time last year we had over 850 homes for sale in our MLS for Lincoln County.  At present there are slightly less than 700.  I expect inventory levels to climb as they always do at this time of year but not to the levels we saw last summer.

   We have had very good activity as far as phone calls and showings go for about the last 6 or 7 weeks or since the winter really started to break.  Again this is normal as we are a seasonal market. We have had a fair number of offers being made and more encouragingly, being accepted. Buyers are always quicker to adjust to a decreasing market than Sellers but at this point everyone knows the score.

   Prices seem to have settled in at about 14% to 18% lower than they were at this time 2 years ago.   Unless inventory levels spike much higher, say over 800 homes on the market, I expect that prices won't drop further.

   Mortgage interest rates remain extremely low.  The Fed meets this week and many expect another quarter point drop in the Federal Funds rate but most bankers I talk to say that probably won't translate into lower mortgage rates.  What it may do is loosen up some of the lending practices at the bigger banks.  We have found that local banks here in town have money to lend to qualified home buyers and are quite willing to do so.  The bigger banks, based outside of our area, who advertise slightly lower rates, paradoxically seem to always find a reason to deny a loan, usually by cutting down the appraisal.  In other words, the guys that got us into this mess have no inclination to help us get out. But why talk to some voice mail system in California or Florida?  I'll be glad to walk you across the street where you can talk with Roger or Ken or up the street to talk with Patricia or Gary.  They are friendly, courteous and professional bankers who live right here and they would very much like to talk with you about doing business.

   The vaunted stimulus package starts to roll out this week. This is the politicians way of trying to convince us that they understand what is going on and can do something about it. I tend to doubt it but we'll see. (Maybe they could have just sent the money right to Exxon/Mobil and saved us the trouble of paying it at the pump). Indeed with the job market remaining strong (less than 4% unemployment among college grads) the biggest problem after the credit crunch is commodity prices, particularly oil and food.

   Summing up, it's not going to be summer of '04 again but neither is it going to be summer '07.  This is a good time to buy and not a bad time to sell.  The market appears to have levelled off. Those homes that come on the market now will for the most part be priced realistically (there's a few dreamers in every market).  All the reasons why folks wanted to live here before (pleasant small towns, low crime, good schools, good health care, etc.) remain in place.

   If you've been thinking of making a move, why not give one of our professional real estate brokers a call and see where your wants and needs fit into todays mid coast Maine real estate market.

Jim Cosgrove

Comments

[Jim Johnson CRS]

Great Blog! I have been selling real estate in Bend Oregon since 1981 and find it refreshing to find a helpful blog like yours! Keep up the good work!

http://www.bendoregonrealestateexpert.com/