Archive for the 'Maine Articles' Category

First-time homebuyers who are taking advantage of the federal government’s economic stimulus programs and bargain home prices are credited for the rise in home sales in Maine. The current trend has created a debate among industry analysts who are wondering whether the market is on its way to recovery or hitting the bottom.

One group of analysts believed that property values in Maine will drop by 10 to 13 percentage points in 2009 as the number of house repo piles up, pulling down home prices.

They predicted that the foreclosure rate will increase in one or two years. They pointed out that for each home foreclosed in a community, the economic damage is estimated to be around $225,000, the average mortgage loan taken out during the peak of the real estate market.

They explained that the foreclosure rate in Maine is relatively lower compared with the national average. But the state will continue to experience a rise in foreclosures even if some states will start to experience foreclosure rate stability. Analysts said that this is because the effects of the subprime mortgage crisis took a long while to manifest in Maine.

They added that home price increases came in more slowly in Maine compared with the pace in populated markets where there were more creative mortgages and money.

But Maine State Housing Authority senior policy analyst Bob King does not believe that the real estate market in the state is facing a bleak future. He said that projected drops in values of properties sound too severe, adding that the economy is rebounding and pulling up home sales and prices.

Some analysts agree with King, noting that the volume of home sales has started to pick up its pace and if demand increases, it follows that prices would stabilize or inch up.

They credited the growing number of first-time homebuyers on the market, driven by incentives, including a federal tax credit of $8,000 and almost $5,500 from the Maine Housing Authority.

Some analysts in Bar Harbor disagree about the projected 13 percent drop in property values, almost three points worse compared with the three largest cities in the state.

They disputed market data about home values in the area, saying that they did not drop precipitously as reported. They said that the housing markets in Bar Harbor and Mount Desert Island are bouncing along the bottom while properties under $200,000 in Ellsworth are going strong.