Calling All Mainers...

...and those that wish they were.  The Lobster industry has taken a big hit in the economic downturn.  So far there's no word from Washington on a bailout plan so the lobstermen have resorted to doing things the old fashioned way, they have lowered their prices in an effort to stimulate demand.

   Down to the Pemaquid Co Op  the price was just $3.29 per pound and we're talking fresh caught this morning Maine lobster.  That's less than beef or pork and just a little more than chicken from who knows where at the big box grocery store.

   So how about helping the boys out and taking home a few lobsters for dinner tonight?  I know usually it's just something you have when friends and relatives from out of state come to visit but in these times we all have to look out for each other.

   And no, we don't say "lob stuh" or "Main uh". Well, actually we do but we don't write it that way so spare me the emails.

Jim Cosgrove

Marking Time in Mid Coast Maine

 

   A "friend" called the other day and asked,"what does a real estate broker do when the market slows down?"   He was trying to bait me into joining him in the gloom and doom whining that so many people seem to want to participate in these days.   But, I'm not rising to that, I've got better things to do.  I live in the greatest place on earth and if my phone's not going to ring (with productive calls) I've got plenty of enjoyable things to do.

    In this particular case my lovely daughter, Natasha and I took Reggie the Wonder Dog to one of the local hills for a hike in the clear fall air.  From the top of the ridge we could look inland to woods and ponds and east to the ocean and the wide horizon.

   We could have gone for a boat ride on the Damariscotta River or a canoe paddle on Pemaquid Lake.  We could have played golf on one of several decidedly uncrowded golf courses.   

   We could have gone hiking at any of about 20 different state maintained areas or conservation land trust spots within about a half hour drive.

   I have no idea what they do down in the city when things get slow.  I guess they just call folks in Maine!

Jim Cosgrove

Columbus Day in Mid Coast Maine

    Columbus Day weekend was a lot of fun in the Mid coast area of Maine thanks in main part to the Damariscotta Pumpkin Festival.  The weather was absolutely fantastic for most of the weekend and the light drizzle that fell on Monday didn't dampen anyones spirits.  The streets of downtown Damariscotta and Newcastle were lined with giant carved pumpkins and were teeming with folks from all over who came out to see them and to attend such events as the giant Pumpkin Drop on Saturday emceed by comedian Bob Marley, the Pumpkin catapult throw at the Damariscotta River Associations farm on Sunday and of course the Great Pumpkin Regatta on Monday.

   Follow this link for the complete story and video from Channel 6!

Damariscotta Pumpkin Fest

   Late yesterday afternoon Damariscotta was abuzz with activity as the Giant Pumpkins began to arrive.  The minute the business day had ended, the local lumber yard trucks arrived downtown weighted down with giant pumpkins heavier than a load of lumber!  Volunteers worked for several hours delivering pumpkins to their assigned platforms throughout town.

   This morning is a perfect, glorious fall Maine morning and pedestrians are strolling though town admiring the pumpkins which are labeled with the name of the grower, the type of seeds and the weight (397 lbs. in front of Serendipity Shop and The Breakfast Place next to Newcastle Square Realty.)  Later today and tomorrow, artists will be busily painting, carving and sculpting up and down Main St.  What a fun place to live!

Debby Schling

What Now?

    The Emergency Economic Stabilization Act of 2008 has passed the House and the Senate and been signed into law by President Bush. So what happens now to real estate sales in mid coast Maine?  Well, first lets review. 

   Starting in the late 1970's the government decided it would be a good thing to encourage wider home ownership in the population of our country.  On the face of it this was a good thing.  Historically countries with a large and stable middle class are very healthy countries.   Home ownership is a major component of the middle class or the "American Dream".  To accomplish this the quasi government agencies Fannie Mae and Freddi Mac were encouraged to relax lending standards and make it easier for people to qualify for loans from banks. This worked very well for quite some time.  With an expanding base of homeowners real estate prices quite naturally went up.  Builders built more homes, employing more people in the building trades and related fields and everyone was happy (both Democrats and Republicans participated in these government decisions and both parties thought this was a very good thing). 

   Over the years this became more and more sophisticated and the world of finance found more and more ways to make money off of homeownership. Homeowners traded up to bigger and more expensive houses and, if we're honest about things, we all rather enjoyed it, even if you didn't buy a home chances are you had an equity loan and enjoyed all that comes with a strong economy.  However like most good things this couldn't last.  Bubbles can only get so big before they burst.  Eventually builders built too many homes, sellers reached too high in their prices, banks made too many questionable loans and the financial geniuses got too smart for their own good.  All it took was a minor amount of price contraction for the whole house of cards to begin to crumble.

   What was a normal downturn in the business cycle that under normal circumstances could have been managed to a "soft landing" by the central banks, turned into a precipitous decline when over leveraged institutions began to panic and attempt to bail out.  In other words, the guys that got us into this mess, weren't about to stick around and help us get out of it.  Given the way the Investment banks, insurance companies and financial brokerage houses had intertwined themselves (it would take way too long to go into credit swap derivatives here) it only took one to go down before they all started to feel the effect.

    Faced with an economy that was melting down there was only one entity that could possibly stop the carnage and that was the entity that owns the printing press.  Make no mistake, this "bailout bill" is not "good legislation" as Sen. Harry Reid called it.  It is full of junk  like excise tax rebates for the rum industry, extended deprecation timetables for NASCAR, added deductions for the film industry and much more.  But the base proposition of the bill, to keep the credit markets open, was and is necessary.

   In the end the taxpayers will get back much of the money spent on this just as they did when the Savings and Loan industry was bailed out.  The banks, over time, will get back to lending and under more normal lending standards (i.e. if you can't pay you don't get the loan).  There will be more government regulation of the financial industry and this particular crisis will never happen again.  If nothing else we're very good at closing the barn door after the horses are gone.

   As for real estate in mid coast Maine?  In the short term not much will happen.  Prices will remain low.  I have spoken to officers of all of the local banks and they assure me they have money and are eager to lend that money to qualified borrowers.  Right now they have some historically attractive rates, too. We are at the "end of the line" here and many of our home buyers come from other areas, principally states to our south.  We are an attractive area for retiree's and second home owners with a healthy environment, pleasant small towns and beautiful scenery.  But, those buyers generally need to sell real estate before they can buy so we are dependent for our recovery on other areas recovering first. For those buyers who are in a position to buy now there are some excellent opportunities in our marketplace at this time.

   In the long term we will return to normal rates of appreciation in our real estate and todays prices will be seen as real bargains.  We probably will never again see rates of appreciation like we saw in the past few years but we will see values go up and unlike with other investments you can see, touch, feel, live in and enjoy real estate. There is a finite amount of real estate and an ever increasing population that wants to own that real estate.  We happen to think that some of the best real estate in the world is right here in Damariscotta and Newcastle, on the Pemaquid peninsula, in Christmas Cove and on Muscoungus Sound. Call or email one of our brokers and find out more about some of these opportunities.

Jim Cosgrove