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Old 01-01-2008, 12:08 PM
 
Location: Gorham, Maine
1,648 posts, read 2,599,561 times
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Default Real Estate - Some good news from Maine?

This is from the blog I wrote this morning on a popular, public real estate website:

Prices for single family, existing homes increased 1.62% in November 2007 compared to November 2006. In figures reported yesterday by MREIS (Maine Real Estate Information System, Inc.), REALTORS reported 891 sales in Maine in November, compared to 997 sales during November 2006, a drop of 10.63 percent. The median sales price for such a home was 188,000 in November, up from 185,000 in November 2006. The median sales price is defined as the figure where 50% of the homes sold for more and 50% sold for less. While this might seem as bad news to some, Maine is holding up remarkably well when compared to the rest of the country and the region. It is important to note that all figures are for existing single family homes and do not include new construction.

Nationally the National Association of REALTORS reported that sales of single family existing homes dropped 19.9% in November 2007 as compared to November 2006. The national median existing single family home price dropped 3.7% in October to 208,700.

Regionally in the Northeast, sales were down 19.4 percent, and the regional median sales price decreased to 258,300, a loss of 3.2%.

Each day the media is reporting about the crash in the real estate market and buyers are on the fence afraid to jump in, fearing their home will lose value as soon as they close on it. The numbers in Maine point to a different scenario. While units sold are down year over year (at about half the national average), prices are relatively flat. With interest rates at close to historic lows, it might never be a better time to buy that home now, particularly if you plan to stay for some time.



I am quoting statewide statistics here, please reply if you'd like me to quote individual counties. For example, the median price of an existing single family home in Aroostook County was up 14.6% in the quarter ending November 30, 2007 compared with the quarter ending on November 30, 2006. Another one to note, there were just 10 existing single family homes in Washington County (3.33 per month!) compared with 20 in 2006, a drop of 50%.
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Old 01-01-2008, 12:41 PM
 
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Good info. Thank you. In terms of home prices, do you have any historical data or experience concerning whether Maine lags or leads the rest of the nation in real estate trends? For example, is the increase in median home sales prices part of a trendline up or down in price increases? And does the traditional impact of waterfront property, which almost always keeps going up no matter what the rest of the market is doing, have a moderating effect on the numbers?

Aroostook County's increase is very surprising. Does this reflect an increase in new residents moving to the County, perhaps as retirees or the increased number of border and immigration agents?
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Old 01-01-2008, 01:00 PM
 
Location: Gorham, Maine
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Hello Coaster. I'll know more when the annual figures are published, but this monthly reporting has been pretty consistent with what's been reported all year, sales down, but prices relatively flat or decreasing slightly. Inventory and Days on Market is up significantly, and there are membership in the Maine Association of REALTORS is down 8% year over year.

Aroostook's numbers have been all over the map this year, up some months and down in others. I do know that the Median Sales Price is less than half of Cumberland County, at well under 100,000 while Cumberland's is close to 250,000. I would defer to somebody who knows that market better than I do.
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Old 01-03-2008, 09:15 PM
 
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Thank you whofanme for the updated report. What is the foreclosure rate looking like in the state? Which county has the highest rate? How are commercial properties doing??
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Old 01-03-2008, 10:07 PM
 
Location: Gorham, Maine
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Hi moughie, thanks for reading. Unfortunately the Maine Association of REALTORS does not track foreclosures. What we are seeing and expect to see more of is short sales, the step before foreclosure where the proceeds from a sale will not pay off the debt on the property and the lienholder must approve the agreement made between the buyer and seller.

I also don't work in the commercial space, so I don't have a feel for that. Perhaps mainebrokerman does???
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Old 01-04-2008, 06:39 AM
 
Location: Northern Maine
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The median price of home sales is up because those buying homes are able to afford them. When the median price is up and numbers of sales down it is not a good sign for the economy.

Banks are very cautious about lending. There are a few categories of buyers who banks are seeking out. They are buyers with substantial down payments and military personnel. Their incomes are assured and banks have very low risk with them.

In the month of October, 30% of the scheduled home closings in Maine did not occur. The buyers were qualified for a loan; the sellers were willing; title work was OK. The problem was that the lenders simply did not have the money to lend. Americans as a group no longer save. We are withdrawing our savings to buy food, fuel and toys. Banks are required to have certain amounts in reserve to lend money. If their reserves are too low, they can't lend.

The picture can be understood best if we look at one transaction. The bank could not loan the money. The buyers are sitting there with a loaded U-haul van out front expecting to move in to their new house that day. The sellers have already moved out and their household goods are headed for South Carolina in a van. What can these people do? Each transaction involves two families so the magnitude of the crisis is not just 30% of the tranactions. It is actually has double the apparent effect.

A caution to buyers and sellers: Make darn sure the lender is a solid institution. A qualification letter is no longer good assurance that the buyer can actually buy the property.
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Old 01-04-2008, 07:55 AM
 
Location: Forests of Maine
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Quote:
Originally Posted by WhoFanMe View Post
Hi moughie, thanks for reading. Unfortunately the Maine Association of REALTORS does not track foreclosures. What we are seeing and expect to see more of is short sales, the step before foreclosure where the proceeds from a sale will not pay off the debt on the property and the lienholder must approve the agreement made between the buyer and seller.
I thought that a 'short sale' is when the lienholder agrees to a sale where the sale price is less than the outstanding principle. The lienholder agrees the lesser amount will pay off the debt.

When the sale has been completed no further debt exists.

A property with an outstanding principle of $100,000, but whose market value is $80,000; for example, the lienholder must agree to accept $80,000 to absolve the $100,000 debt.

Granted they get far more for their note in this manner as compared to when mortgage brokers sell notes among themselves. My father does that, he buys notes from mortgage brokers, usually between 30% to 50% of the note's face value.

When a mortgage company wants to dump a note, a short sale may often get more for the note than marketing the same note through the mortgage brokers [assuming that the outstanding face value of the note is anywhere close to that property's market value].
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Old 01-04-2008, 09:37 AM
 
Location: Eastport, Maine
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Thanks for the information! These are great posts. I feel much better having closed on a home in Maine Oct 31st. The owner did reduce the price significantly. The house had been on the market all through the summer and maybe he wanted to move the house before winter set in. Here in Florida, we have nothing positive going on. Prices are down, sales are flat. No real hope for at least a year. They are hoping that spring will find the usual people here who have the cash to buy homes. Everyone is sort of hunkered down during the storm.

Once again, great posts everyone!
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Old 01-04-2008, 09:46 AM
 
Location: maine/alabama
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WFM and NMLM.........excellent informative posts. is it possible to get an understanding of the trends regarding coastal lots (lot only, no structures) in midcoast maine?
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Old 01-04-2008, 10:26 AM
 
2,294 posts, read 3,772,461 times
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The problem I am having with purchasing a foreclosure is that the company selling the piece doesn't have a clear title.
There are two gaps in the chain of custody where a mortgage holder sold the title to another company but never recorded the deed with the registry.
I guess these companies hope and pray that the buyer won't perform a title search and discover the discrepancies.
Buyer beware.
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