My New Blog

Greetings from Maine

It is fair to say we have all endured a lot during the past months. The tumult following the financial meltdown from October 2008 through March of 2009 has had a lasting impact on the Global economy as well as Maine Real Estate. It does not seem possible that just a bit over one year ago, the Dow Jones Index traded below 6,500. The stock market had to rally more than 60% from the March 2009 lows to finish the year (2009) near 20% below all time highs. Maine Real Estate did not share in the wild swings of the stock market, and it seems to be settling to a more comfortable and stable dynamic, consistent with the net returns of the stock market. Whether that is simply a coincidence, or the efficiencies of the "invisible hand" adjusting to the new economic conditions is a topic for lively discussion. At the moment, we welcome the stability.

I have been saying for some time that the market volumes hit the lows of this downward cycle about a year ago. Maine Association of Realtors reports that "January (2010) marks the eighth month of positive gains in Maine's existing home sales market." Despite significant double digit increases in Volume, home prices continued to fall for most all of 2009. The December numbers revealed a small reversal in this trend, with the median home sale price improving 1.5%. The January median sales price increased more than 5% from January 2009 levels. Although the sales price improvements are measured against very weak market conditions last year, it seems prices have ceased their persistent decline.

Spring 2010 has a very different look and feel than just a year ago. The table below highlights a few of the changes:

I continue to be encouraged by virtually all of the positive signs for the spring market with low interest rates, government-led buyer incentives, re-priced inventory better reflecting current market conditions, mild weather and generally active buyer inquiry at most price points. Unlike most of the Eastern seaboard, coastal Maine had a mild, nearly snow free winter which already has golf courses opening, spring skiing conditions, and daffodils popping. The California real estate marketplace has done a complete and welcomed turn around which is beginning to also happen here in Maine. The average number of competing offers in California was recently reported to be five!

If I can help you find some good deals, call me (207) 687-2102 or send me an e-mail at mrt@larrycilley.com