The nearby Atlantic Ocean is sparkling like a jewel, but Maine real estate is looking rather dismal by comparison. Despite rising rates of home sales under $200,000 in cities such as Portland, housing values are predicted to deflate anywhere from 10 to nearly 13 percent. The following article from Housing Predictor explains.
Struggling with foreclosures and a stressed economy, Maine housing markets are on the up-swing with first time buyers taking advantage of the federal government's tax credit. But bracing for the first time buyers program's expiration on December 1st, residents of towns all over Maine are wondering if the renewed interest in real estate is about to run out of gas.
The tourist economy is the state's strongest single industry along with great big Maine lobster. But the fishermen are taking it on the chin in the recessionary economy getting less than $3.00 a pound for their catch. Spending cuts in education and other sectors are making it tough in Maine. But the state hasn't been devastated like many other areas of the country by unemployment, which hovers above the national average.
Home sales are up Portland, especially for homes priced under $200,000, the prime territory for first time buyers. But the excess inventory of properties on the market above that level are a drag on the marketplace, producing sluggish sales.
In Portland like most of Maine the transition back to a healthier housing market will take a while longer as the area adjusts to fall-out from the financial crisis, and lower home prices. Portland home sales are projected to be sluggish through the remainder of the year with the market forecast by Housing Predictor to deflate average home values at 11.1% in 2009.
Local Maine Housing Markets at a Glance:
| City |
Forecast |
| Bangor |
-10.2% |
| Portland |
-11.1% |
| Bar Harbor |
-12.9% |
| Lewiston |
-11.3% |
Fewer foreclosures than many other areas of the country have kept the housing market more stable in Bangor, despite some foreclosures and short sales. Maine ranks as one of the lower states in terms of foreclosures, at least partially insulated from the fall-out of the financial crisis because there was much less lending by major national lenders in the state than other more populated areas. The downturn in housing values has been something that homeowners in Bangor have been adjusting to and may take a while to cope with. Bangor housing values are forecast to deflate 10.2% on average in 2009.
As bargain hunters turned out, home sales picked-up in Lewiston from an over supply of inventory. The supply has been cut by bargain hunters, who saw a ripe market for the taking as more homeowners defaulted on their mortgages. But the market should make inroads towards stabilizing over the next few quarters with forecast housing deflation for 2009 to average 11.3%.
Upstate in the resort community of Bar Harbor, where the Atlantic Ocean sparkles like a jewel in the morning, the hammers of tradesmen have come to a halt from fall out of the national recession. Bar Harbor saw growth like it never had before during the real estate boom before it came crashing down.
Now the resort community has an abundance of condominiums to rent for vacationers. The second home market has always attracted the elite, including many retirees who don't mind the slower pace. But the housing market is projected to be hit hard by the downturn in the economy, and is forecast to suffer average housing deflation of 12.9% in 2009, the highest anywhere in the state. Good old Bar Harbor will recover from the economic mess in due time.
The following article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate forecasting site.
