August is shaping up to be a lackluster month for stocks as the DJIA continues to gyrate around the 10,000 mark giving up 4%. Oil prices have moderated into the low $70's per barrel, keeping retail gasoline and oil prices at affordable levels. The 10-year Treasury note at 2.50%, while very good for mortgage rates, is making it more difficult for investors looking to actually earn a return on their investments. The dollar seems to be in an acceptable range for continued interest from international buyers with the Pound near $1.55, Canadian Dollar at 94 cents and the Swiss Franc at $0.98 per US dollar. 

If you have been reading the national real estate headlines, you have seen some staggering numbers in terms of sales volumes. Maine was not immune to the downdraft, reporting July sales volumes down more than 30% compared to last July. Although Maine did show a modest 4% increase in median home prices, it was still not a great month for overall real estate sales volumes. If one does not look past the aggregate number, one could be lead to believe that the sky really may be falling.

Needless to say, I think the aggregated current data does not tell an accurate story.We are clearly in the midst of a very significant "pause" in the market following the expiration of the "first time home buyer" tax incentive plan.It appears that this pause is almost exclusively affecting the lower priced property segments (under $300,000).The emerging theme in Maine real estate is a very strong resurgence in market interest in the middle market and luxury property segments in recent months. If one looks at the Maine "under contract" data (Chart below), properties valued at more than $500,000 have increased 71%,while all pending properties over $300,000 have increased 28%.This is in stark contrast to the segment directly impacted by the government tax credits.

All Maine Single Family Homes $500,000 and higher:

71% Gain vs. July 2009