Happy New Years!

     Sometimes as I'm sitting at my desk great ideas just come to me.  Many, many great ideas.  Sitting here trying to decide what to write for New Years and I just had another one.  This one is so good I expect it to be widely copied.  You watch, by tomorrow all of the bigger media outlets will be doing this, but remember, you saw it here first.

My great idea is, a Top Ten list! I've compiled a list of our top ten blog posts from 2008 based on how many readers came onto the sight either right after a particular post went up or searched for that post later or commented on it either on the sight or with an email to us.  This has proven to be a very humbling experience since very few of my pithy insights about the real estate market made the list.  But, don't think I'm going to let that stop me, you can count on this site for all of the mid coast Maine real estate information you need and then some!

   So, starting at the bottom, our Top Ten posts for 2008 are:

10. Moose on the Loose ( April 9, these pictures were even seen on New England Cable News)

9. Marking Time in Mid Coast Maine (October 28, a short post about a hike I took with my daughter that I thought no one would read)

8. Pemaquid Areas Best Swimming Holes (August 15, Kathy's one post of the year comes in at #8 and she says she doesn't like to write?)

7. The Running of the Alewives (May 20, People must have thought this was about beer drinking, married marathoners)

6. Subprime Derivatives, part 2 (January 30, a hilarious video, back when we could still laugh about the subprime mess)

5. Moon over The Mills (Feb. 19, a great photo!)

4. Damariscotta Pumpkin Fest (Oct. 10, The Pumpkin Fest is becoming HUGE and we're looking forward to next year already)

3. Don't You Want to Sell Your Home? (Sept. 5, Hey, one that I wrote!  Thanks, Mom)

2. The View from my Office (June 13, I will never again underestimate the power of a good picture)

And our number one post of the year, by far, I even got phone calls from all over the country thanks to this post from July 11:  Boothbay Harbor Fire on the Damariscotta River.

It's been an interesting and very challenging year.  We hope you have enjoyed our blog and since so many now read us on a regular basis we must be doing something right.  Have a great New Years and we'll see you all right back here in 2009!

Peace,

Jim Cosgrove, for Tom and Kathy and Debby and all the rest of the Associates here at Newcastle Square Realty

Pemaquid Peninsula Heat Wave

   It's two days before the New Year and we're enjoying some fine weather here in Damariscotta.

Merry Christmas from Maine

"The Sky is Falling..."

     My intention this morning was to put up a nice Christmas type post and get out of here early to spend some quality time with family and friends.  But since last night the mainstream media has bombarded me and I assume you with (drum-roll)  breaking news, the fact that sales of new homes were down in November! so let's deal with that and then get on to more important stuff!

   Apparently, the A teams at all of the various networks and news organizations are off for the holiday and so once some cub reporter filed this story the rest of them picked it up and ran with it.  Had anyone bothered to check the facts and give this a little thought it may have occurred to them that sales of homes are not like retail sales.  That is, one does not pick up a home, take it to a cash register and buy it.  It takes on average, 60 to 90 days to close a home sale. 

  After a home goes "under contract" there are inspections to be performed, a title to be checked and financing to be arranged, in most cases. Since this report is talking about new homes there may even be work still to be performed and finish details that need to be added. In other words,the vast majority of home sales that actually closed in November were probably from contracts written in September or October.

   Does anyone remember what was happening in September and October?  Do the words Lehman Brothers, AIG and Government Bailout ring a bell?  September and October were basically one piece of bad news after another.  John McCain suspended his campaign to fly back to Washington, Treasury Secretary Paulson got more face time on the evening news than Barrack Obama and Ben and Jennifer combined. They were horrible months and it's true, hardly anybody bought anything. 

   The other salient point is that this statistic, breathlessly reported over and over is for new homes.  Of course the new home market is dead.  There market is flooded with existing homes.  There is so much inventory in existing homes that new homes with their higher labor and material costs simply can't compete.  

   The moral of this story is don't believe everything you hear on the evening news or read in the morning paper or on your favorite internet site (unless it's mainecoastproperties blog).  Since approximately November 4 we have seen some (slight) increase in sales of existing homes at least here in mid coast Maine.  We have seen a marked increase in calls and appointments for showings from prospective buyers. People seem to be realizing that low interest rates, high inventory levels and prices that are on average 20-30% lower than at the peak of the market make this an excellent time to buy.

   Yes our economy has problems.  But since the beginning of recored (economic) history what has gone down has come back up.   The same people who once predicted a "soft landing" for the economy and later, that oil would hit $500 per barrel are the ones now saying that housing has a lot further to go downward.

   I hope when times were good you put something away for a rainy day.  I hope you didn't lock in to a ridiculously high oil contract and I hope that if you are in the market for a home you will call one of our brokers right after the holidays!

Jim Cosgrove

Bailey the Unknown Reindeer

Ahh, the pure joy of running through fresh snow!!!

Main Street Damariscotta is Rarely Boring

When I offered to ring the bell for the Salvation Army Holiday Drive I never expected it to turn out to be so surreal. I was minding my own business ringing the bell, wishing people a happy holiday and thanking them for their contribution when an older woman brings up a little table and some petitions. I didn't see her sign and thought that whatever the cause was it must be something about more money for stray cat shelters or repealing some tax that offends older women with white hair. Until I saw the sign. I hope I didn't lose any contributors.

  

In any case have a Safe and Happy Holiday.

Tom Field

Fed Rate Down to Zero

     The Federal Reserve reduced its benchmark interest rate effectively to zero today.  The "overnight Federal funds rate" affects the interest rate at which banks lend their reserves to one another.  Demand for interbank loans has been unprecedentedly low as large banks hoard cash and simply refuse to loan.  

   In other words, the guys that got us into this mess aren't going to do anything to get us out of it.  Meanwhile the small local banks, the ones that did everything right and din't use low "teaser" rates and generally followed commons sense lending practices do have money to lend, they do want to make loans and thanks to the Fed they do have incredibly low interest rates.  

   In an article entitled It May Be Time to Think About Buying a House printed in The New York Times last week, the writer called this the "golden age for first time homebuyers".   With high numbers of homes on the market, prices that are in some cases as much as 30% lower than they were 2 or 3 years ago and borrowers having the ability to get 30 year fixed rate mortgages under 6%, it just may be a golden age!

   Since September the Fed has pumped almost $2 trillion dollars into the economy.  Sooner or later that will become inflationary and prices will start to rise.  When that happens they will raise interest rates and I predict they will do so faster than they put them down. They will also begin to remove money from circulation and borrowing will become harder but for other reasons than we have now.  

  I think consumers will have a pretty good opportunity through the first half of 2009, after that the inventory levels (already down 20% in Lincoln County, Maine for 4th quarter '08)  will have declined and the best properties will be gone.  While we are a long way yet from any serious price appreciation in Maine real estate the time for maximum financial opportunity is going to go by fast.

   If your credit is good and you can afford a reasonable down payment, call us today and lets talk about what opportunities the Fed may have created for you today.

Jim Cosgrove 

In Maine, We Laugh

First Snow in Maine

 

   The first "plowable" snow of the year is falling today.  This is coming on the heels of a very cold couple of days so I guess it's time to put away the golf clubs and drag the ski's down out of the attic. 

   One of our local TV stations changes the name of their newscast from "News Center" to " Storm Center" whenever it snows more than an inch and  they have a very catchy tune to go along with it. Plus, the talking heads all wear really nice sweaters.  It's all over with by late March (usually) so unless you live here you miss it.

  

Jim Cosgrove 

Rx for Housing

     The National Association of Realtors has proposed what they are calling a Four Point Plan designed to get the housing market moving again.  While we applaud the governments efforts to unclog the frozen credit markets and we trust that the moves they have made will ultimately do just that, now is the time to start targeting the housing market specifically.   It is important to note that nothing else could be done until credit was available to businesses and individuals.  While the credit situation remains tenuous the government has made it plain that they are willing to do whatever it takes (pump cash into the system) to make the credit markets work. So let's move on to housing.

   The Realtor organization's plan is simple and direct and if implemented swiftly could be just the stimulus needed to jump start the moribund housing market.   The four points are as follows:

   First, Make the $7,500. first time home buyers tax credit available to all buyers and eliminate repayment requirements.  The credits limited availability to only first time buyers and the repayment requirement that in essence make it an interest free loan have severely limited the credits use and effectiveness.  I would go further and say that they need to find a way to make it available at the time of purchase and not on April 15.

   Second; Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent.  New rules for 2009 will reduce them. Now is not the time to limit mortgage affordability.

   Third; Get the Treasury relief program back on track and target more funds to mortgage relief.  The original "bail out" bill envisioned an entity to buy up so called toxic mortgages and hold them until the market turned around.  That money was instead given to banks and soon possibly to the auto makers. The banks are hoarding it and the auto makers will waste it and soon be back for more.  Buying up asset backed mortgages will help the real estate market directly and give the government a mechanism for eventually recovering a large portion of that rescue money.

   Fourth; Permanently bar banks from engaging in real estate brokerage and management. OK this one won't really do much to get real estate moving again but it is a pet peeve of our industry and as the new Presidents Chief of Staff, Rahm Emmanuel says "Never waste a good crisis", so if we're going to work on a bill we should get something.  And really, bankers know as much about real estate as I know about banking. If they were that smart they wouldn't have made some of those "toxic" loans.

Jim Cosgrove