By Kate Hodgson
So how did we fare in 2011? And where are we going in 2012?

The Greater Portland real estate market recorded the lowest number of sales in over 14 years in 2011. But the news is not all bad. The market continues to stabilize and as sales have declined so too has inventory. The ratio of new listings to properties sold has steadily decreased to 1.85 since a peak of 2.10 in 2008.  Despite the sluggish sales, 2011 ended in a strong position with noticeable improvement in the fourth quarter both locally and nationally.

The Greater Portland market saw an 8% increase in the number of single family homes and Portland condos sold in the fourth quarter from the same quarter last year.

This reflected the positive news being reported nationally.  According to a WSJ online 12/21/11 report, residential construction “surged in November, pushing housing starts to… the highest level in 19 months”. Additionally, the National Association of Realtors, reported that existing home sales rose in November.

As for 2012, the predictions swing in every direction.

Nationally:

Franklin American, in their electronic newsletter, summed up the outlook for 2012:

The New Year is here. Of course, now we are inundated with predictions regarding what will happen in the coming year. If you read 100 predictions, you would get 100 different scenarios. For example, in October Fannie Mae predicted that rates on home loans would fall in the first half of next year, while Freddie Mac forecasted an increase in rates. In addition, Fannie Mae Chief Economist Doug Duncan rated the chance of a recession at 40% next year while Freddie Mac predicts that economic growth will likely strengthen to about 2.5% in 2012. More recently, a survey of 20 top economists conducted by CNN/Money predicted the risk of a recession next year at only 20% next year. This survey expected the fourth quarter growth rate to be the strongest of the year with over a 3.0% growth rate, but grow to slow to an annual rate of 2.4% next year.

Slow growth next year but no new recession? Sounds like a replay of this year. Our advice? Don’t get lost in predictions. Most of the time they are a reflection of what already has happened. Right now we have very positive trends with increased consumer confidence confirmed by the Conference Board’s survey released last week… The real question is, will these trends continue into next year or do we fall back into our ‘starts and stops’ pattern of economic recovery? If you want a clue to that question, watch the employment trends.

Rising rents are forcing renters to outspend home owners on housing costs, according to a recent study. Since 2005, home owners’ housing expenses have climbed from 31.9 percent of their household budget to 33.2 percent. On the other hand, in that same time period, renters’ expenses have jumped from 35.6 percent to 38.4 percent, according to the October CoreLogic U.S. Housing Trends.  Source: RISMedia

The Greater Portland market:

Last year, Housingpredictor.com, an independent real estate news website, touted Portland as one of the top 3 markets for growth nationwide. Sadly, it doesn’t even make the top 25 this year. Their reasons:

“Extraordinarily sluggish home sales and slowly declining home prices are preventing Maine housing markets from making a full-fledged recovery, but cities and towns throughout the state are hardly experiencing a major drop in home values either.

Maine is turning out to be one of the safest bets so far in the fallout of the U.S. real estate collapse. A slim volume of sales is hand-cuffing the markets and are expected to chill the region’s home sales at a slow pace through 2012.

National headlines over the foreclosure crisis and falling home values have hurt Maine housing markets more than anything else. Housing sales in most of the state have been sluggish but have remained consistent through the U.S. downturn – just not many sales compared to most other regions of the country. Less than 1,000 homes sell in an average month statewide.

While sales move at a snails pace, the number of homes being sold monthly are creeping up as prices decline only marginally. However, home sales are projected to increase in Portland as new home buyers take advantage of record low mortgage interest rates. The influx of retirees to the region is also helping to boost the market. But home values are forecast to drop slight during the year averaging 2.6% less.”

On the other hand, CNN Money, which tracks 384 markets throughout the US, predicts a 4.5% increase in home prices for the Greater Portland market.

My own opinion is that 2012 will be much like 2011. Sales will continue to be sluggish until the end of the year. Distress sales will keep prices from gaining real traction although I predict they will appreciate slightly as buyers seize the opportunity of low interest rates and sense an end to the bottom of the market. Low interest rates will continue to fuel buyer interest although mortgages will remain bridled by strict lending practices.

Unless we hit a snag (i.e. consumer confidence lags, employment rate stalls, or we experience an environmental disaster), 2012 will remain slow but steady. However, with continued stabilization, we will start to see appreciable change in late 2012 or 2013.

Portland’s Chandlers Wharf condominiums offer a rare opportunity to live downtown directly on the waterfront and feature excellent views of Casco Bay. Units are approximately 1750 sq ft laid out in a ranch or townhouse style floor plan. Chandlers Wharf condos feature modern amenities in the charming Old Port area of Portland.  Portland Condos at Chandlers Wharf range price from 300K – 900K, with a median price of $429K.

The convenient location in downtown Portland is within walking distance of all key points in the city, including some of the area’s finest restaurants. The complex offers shared parking for cars – to learn about the specific features and regulations at Chandlers Wharf, and more condo associations in downtown Portland ME contact John Herrigel directly at 207.650.5383 or by email at herrigelgroup@gmail.com

The coastal Maine town of Boothbay Harbor is rich in history and culture. The traditional occupations of lobstering, fishing, and shipbuilding remain popular. Houses for sale in Boothbay Harbor Maine are priced at an average of 327K, with waterfront homes pricing at an average of 588K. Through the past year, homes in Boothbay Harbor have sold at an average of 250K.

Located on a peninsula between the Sheepscot river and Damariscotta river, Boothbay Harbor is known for hospitality, and tourism. The town has a significant summer population and many amenities for tourists enjoying the Boothbay Harbor Region.

If you would like to learn about current real estate listings in Boothbay Harbor ME, or in listings in neighboring towns, visit the Herrigel Group – experts in coastal and southern Maine real estate. Or contact John Herrigel by phone at 207-650-5383 or by email at johnherrigel@gmail.com

13 condos sold in the Portland Maine housing market during November 2011. This was the same number as last year at this time. At an average price of 215K, condos in Portland appreciated year over year by 40%. The average number of days on the market for condos that sold in November in Portland was 41 – about half the number of days for houses sold during the same time period.

To see the historical charm of West End neighborhood in Portland, check out the Victoria Mansion Deck the Halls holiday tour until Jan. 8^th in Portland for a fun and educational look at Victorian era life and Christmas festivities.

For more information on Portland Maine condos for sale, and living in southern Maine, visit the Herrigel group at myMaineProperty.com – we specialize in Portland Maine homes and condos for sale. For the fastest response contact John Herrigel directly by phone at 207-650-5383 or by email at johnherrigel@gmail.com

Chestnut Lofts units feature stylish open concept interior, a rarity in Portland. Each unit has concrete floors, and is customized by owner to include half walls and partitions. Located in Downtown Portland this convenient location is within walking distance of all key points in the city, and it even includes on-site parking. Chestnut Lofts units range in size and price, from the 200’s to 500K.

Chestnut Lofts condos offer a variety of options for your downtown Portland ME home. To learn about the specific features and regulations of condos at Chestnut Lofts, and more condo associations in downtown Portland ME visit the Herrigel Group – mymaineproperty.com today, or contact John Herrigel directly at 207.650.5383 or by email: herrigelgroup@gmail.com

Currently the condo market in Portland Maine has 114 condos currently listed for sale and offered at a median price point of $215,000.  Overall the condo market in Portland continues to improve with multiple  To Be Built luxury Portland condos slated to come on the market in the near future. The baby boomer population continues to propel this market segment forward as with a great downtown within walking distance from  most neighborhood such as the West End or East End parties looking to relocate to Maine can have restaurants, culture and more  at fraction of the cost of similar cities in America.

As of today.. 179 condos have sold in Portland in 2011 at a median sold price point of 217K.  With sold prices matching asking prices.. the market remains very stable and if a condo is priced right it is selling with a few weeks. However, if a property is over priced.. it is not uncommon for it to sit on the market for an extended period of time whilst seeing little buyer interest.

Going forward expect this market segment to improve given the small supply and strong demand for condos in Portland Maine.

Thanks for reading and please reach out anytime for more information on the current housing market.

Happy almost T-day!  As we enter the holiday season the greater Portland Maine real estate markets continue to show stability and resilience with transaction volume up by double digits in all 4 counties we follow..including York, Cumberland,  Sagadahoc and Lincoln.  The brightest spot in the market continues to remain the city of Portland itself and thus the entire greater Portland market.  Year over year prices remained stable with the median price clocking in at 215K.. exactly where is was a year prior.  Unfortunately the mid coastal real estate market continues to see downward pressure on pricing with values down 10% in the 3rd quarter 2011 for Sagadahoc county. View the full Maine housing report here.

3rd Quarter 2011 Maine Housing Results.

View the full Maine Association of  Realtors press release here

By Kate Hodgson

I have compiled the information in this report to help my clients stay informed about market trends and to help them make critical decisions while navigating the Greater Portland real estate market.  Data are gathered from records on the Maine Real Estate Information Service (MREIS) also known as the multiple listing service (MLS).  The report presents information from 1998 forward as records prior to that are less reliable.

The information is consolidated into 4 categories based on market trends: 1. Portland and South Portland single family homes; 2. Cape Elizabeth, Falmouth, Scarborough and Yarmouth single family homes and condos; 3. Gorham, Gray, Westbrook and Windham single family homes and condos; and 4. Portland and South Portland condos.

Please note: for simplicity I will refer to the second quarter as Q3 and so on

General trends in Q3 2011:

Sales are down and new listings are steady; this has brought modest improvement in the balance between inventory and sales for Q3 of 2011.

Prices are down 7% overall from last year but have remained steady, or shown improvement, in some of the towns observed.

A note of caution: the sales figures for 2010 were skewed by the $8000 tax credit incentive which expired April 30 of that year. This pulled much of the year’s activity forward into the first 2 quarters.  Comparing the figures for this year to last year is fraught with pitfalls because we don’t know how many of those sales would have taken place later in the year, if at all, if the tax credit incentive had not been in place.  A more significant indication of trends is found by comparing 2011 figures with 2008 and 2009.

1. Inventory and 2. Sales:

Compared with Q3 of 2010, the number of new listings declined in all areas observed but the number of units sold was up 16% (probably due to last year’s tax credit acceleration).  The number of units sold is still lower than it has been for over 10 years.

In Portland and South Portland the number of single family homes sold increased 17% from Q3 last year.  More significantly, inventory decreased to 1.32 new listings for every property sold; the lowest Q3 ratio in 4 years and below the average for the 14 year period, indicating a healthier balance between supply and demand.

In Cape Elizabeth, Falmouth, Scarborough, and Yarmouth, the number of properties sold increased 15% from last year but was in line with Q3 of 2007 and 2009.  There were 1.41 new listings for every property sold, down substantially from last year, below the 14 year average, and the lowest Q3 ratio in 7 years.

In Gorham, Gray, Westbrook, and Windham the ratio was 1.82 new listings for every property sold in Q3 2011, in line with the figures from 2007 and 2008. The number of properties sold declined to the lowest level in the 14 year period.

3. Prices:

Prices have continued to show unpredictable fluctuations but at a more modest pace than recent years.  The average sale price increased 3% in Portland and South Portland and increased 2% in Windham, Westbrook, Gorham and Gray, but decreased 4% in Yarmouth, Falmouth, Cape Elizabeth and Scarborough.

Perhaps more significantly, sellers appear to be more realistic than recent years as the sales prices have been more closely aligned with the list prices at the time of sale.

The average sale price for all of these towns was $264,692 and the median price was $237,000.  The lowest sale for the quarter was $40,000 and the highest was $2,000,000, ironically both in Scarborough.

The lowest low price:

Again, the latest figures show that we are bumping along the bottom of the market.  The last quarter had the lowest list price, at the time of sale, in over 5 years which is holding steady around $45,000.  Highlights indicate the peaks and troughs for the 5 years shown.

4. Days on Market (DOM):

The average number of days it is taking for a property to sell decreased in Portland, South Portland, Cape Elizabeth, Falmouth, Scarborough and Yarmouth, but increased in Gorham, Gray, Westbrook and Windham. This may be due in part to short sales becoming more streamlined and taking less time than in recent years.

Snapshot of the real estate market in individual towns:

The table below shows activity for individual towns in the Greater Portland area.  As a general rule I have regarded a market as active, with a healthy rate of turnover, when 20%-25% of the inventory is under contract (column in bold).  Percentages above that indicate a hotter market.  Information in the last 2 columns, on current inventory in relation to recent sales figures, also provides a good snapshot of supply and demand for these areas.

There are two interesting, and conflicting, features to this quarter:

1. There are fewer towns above 20% under contract than usual

2. There are no towns below the 10% mark

D, NG, NoY, P* = Durham, New Gloucester, North Yarmouth, Pownal

Condos (Portland Maine  and South Portland):

The Portland condo market remained largely unchanged from Q3 of 2010. The number of new listings was down slightly and the number of units sold was almost the same. There were 1.6 new listings for every unit sold.

The number of days it is taking condos to sell increased slightly and the average sale price was down 2% over last year.

On October 18, 2011 there were 189 condos currently on the market in Portland and South Portland and 26 under contract, or 12% of total inventory. There were 3.16 condos on the market for every condo that sold in the third quarter of 2011, indicating a lackluster market.

Multi-units (2-4 unit properties in Portland, South Portland, Westbrook):

By comparison the Maine multi-unit market appears fairly robust.  The number of new listings was down slightly from last year but the number of units sold jumped 48%. Forty nine 2-4 unit properties sold in Q3 of 2011, the highest number since 2005 and slightly lower than the average for the 14 year period.

As of October 18, 2011 there are 111 2-4 unit properties on the market in Portland, South Portland, and Westbrook, with 26 of those under contract, or 23% of current inventory.  There were 2.36 listings for every unit that sold in Q3 2011.

Links, notes and the news:

The good news:

According to a recent report by Franklin American, construction spending and service sector spending are both up and the manufacturing sector is expanding.

The bad news:

The number of jobs added doesn’t come close to the number lost since the recession started in December of 2007.

Let’s wait:

Buyers:

Recent Bankrate.com surveys show that first-time home buyers are now favoring homes that are in move-in condition and are shying away from fixer-uppers.

According to Apartments.com, 20% of the respondents who are looking for apartments this year are current home owners; 28.8% of respondents said they were relocating for a job, up from 10.4% last year.  Even these respondents are being choosy; most said they are 5 months or more away from selecting a rental.

Sellers:

The WSJ also notes there is a “lack of attractive inventory” as voluntary sellers are withdrawing from the market, foreclosures are stalled because of irregularities, and the lack of demand is keeping prices soft.

Refinances currently account for 85% of loan origination and it takes around 3 years to recover the associated fees indicating that sellers intend to stay put that much longer. Additionally, permits for remodeling jumped 24% in July, according to Buildfax, signaling that potential sellers intend to make due for the time being.

National Trends:

The Census Bureau reported last week that the rate of home ownership dropped the largest amount since the great depression in the last decade yet the percentage of Americans who own their homes remains the second-highest on record.

At the same time, 30 Year fixed rate loans fell below 4% for the first time according to a Freddie Mac surve

Interesting links:

Refinancing Chills Demand for U.S. Home Purchases Amid Economic ‘Squeeze’

Bloomberg.com, by Kathleen Howley, Oct 14

http://www.bloomberg.com/news/2011-10-14/refinancing-chills-demand-for-u-s-home-purchases-amid-economic-squeeze-.html

Economist stirs controversy with sunny housing forecast

Boston.com, by Scott Van Voorhis, Oct 14

http://www.boston.com/realestate/news/blogs/renow/2011/10/economist_stirs.html

Slim Pickings are Latest Headache for Home Sales

WSJ.com, by Nick Timiraos, Oct 17

http://online.wsj.com/article/SB10001424052970204774604576631381117760982.html

If you would like to discuss how this information can better inform questions you may have about buying or selling in your particular situation, please contact me: (207)807-1140 or katehodgson@yahoo.com.  You can also find me on twitter.com where I post trivia questions about Greater Portland history.

It seems no home buyer’s wants to pull the trigger as of late here in the greater Portland Maine real estate marketplace.   Be it uncertainty about the national economy, uncertainty over one’s job situation, the inability to sell ones home in another region of the country…etc etc…BUMMER!

Lots of lookers thankfully to keep us Realtors busy ,  but very few active buyers.. thus the question is..when will this switch flip and the flood gates reopen?  With rates enabling one to buy for less then they can rent..I am truly amazed as a real estate professional that more parties are not snapping up the incredible deals..condos for 100K to 125K and many multi units for 50K or less a unit in up and coming areas such as Bayside.

Thankfully the overall vibe in Portland continues to be strong and thus our marketplace I feel is way better off than the national average, but if I had one word to describe the current conditions.. it would be “Challenging”.  However… prices are fairly stable thankfully, perhaps drifting down a few percentage points in some neighborhoods, but also rising a few % points in markets such as the East End single family home real estate market.

Thanks for reading and happy rainy Monday!

John

Posted by Kate Hodgson – The Herrigel Group – Green Tree Realty

July was marked by sluggish sales and a sharp rise in new listings. This created the greatest imbalance in July figures for the 14 year period I observe.

227 properties sold in the Greater Portland real estate market in July 2011, compared with:
186 in 2010 (skewed by the tax credit incentive)
245 in 2009
236 in 2008
267 in 2007
229 in 2006.

There were 1.37 new listings for every property sold in July 2011, well above the monthly average of .92. However, the ratio was also down significantly from previous months this year.

The average sale price rose in greater Portland rose slightly and the average Days on Market (DOM) fell slightly.

The advantage is clearly on the buyer’s side with low interest rates, low prices, and a large inventory.

In national real estate news:
Interest rates have fallen to historically low levels once again, dipping below 4%.

Realty Trac has reported that foreclosure activity has fallen to its lowest level since November of 2007 although the Wall Street Journal reported on 8/23 that the number of households falling behind on their mortgages increased slightly in the second quarter or 2011.

Despite the sluggish Maine sales.. the Portland home and Portland Maine condo markets continue to fare quite well.  We here at the Herrigel Group also just created a sweet new web page to provide in depth analysis on condominium associations in Portland Maine thus please do check it out or feel free to look at one of our great neighborhood pages on either homes for sale on the West End or check our East End Real Estate overview.