Archive for the 'Maine' Category (Chronologically Listed)

Maine Home Loan Lending Bill Introduced

Across the state, Maine mortgage holders are caught in a trap, finding it harder to stay on top of their payments (and keep) their homes.

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Posted by Richard Barber on May 02 2007 under Maine





Maine Mortgage Holders Caught in a Trap

Maine mortgage holders are finding it harder to keep their homes, as many people become squeezed between loans they cannot repay and lenders who are offering fewer financing options.

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Posted by Jed Moss on Apr 24 2007 under Maine





Maine Realtors Predict Busy Spring Season

Raymond Labonte knew the house he built on spec would sell. What the Maine resident didn’t expect was how quickly the $779,900 property would go.

“It’s got to be a desirable location, the house has to be different from the norm. When you do that, you’re going to get people looking,” said Labonte, owner of Raymond Labonte of Winding Brook Associates in Scarborough to the Portland Press Herald.

“But selling it on the first open house was a surprise for us.”

That’s because there’s a nationwide slump in home sales. Last year, the median price of a single-family home in Maine rose $2,000 to $193,000, compared with 2005, and the number of units sold dropped by more than 1,000, from 14,672 in 2005 to 13,489 - the first drop since 2000.

Nationally, the number of single-family and condo sales fell from 7.07 million in 2005 to 6.5 million in 2006, according to the National Association of Realtors. Recent grim forecasts among home builders and a growing number of high-risk mortgage loan holders struggling to make payments also are raising concerns nationwide.

Conventional wisdom holds that most of Maine, including Cumberland County, has been and remain a buyers’ market. But with the traditionally active spring real estate season, Realtors reportthat the balance may be shifting somewhat.

David Banks, broker and owner of RE/MAX By the Bay in Portland, said he’s getting multiple offers for property listings, while biggest concern that he hears from buyers who don’t think there’s enough inventory.

In Maine, the median sales price for homes rose steadily after 1998, with large jumps in the first half of this decade. Powered by low Maine mortgage rates, it increased by $17,000 in 2005 compared to 2004, hitting $191,000.

Today, the market is not so blistering.

New England was one of the first regions to go into a housing slump, back in late 2004 and early 2005. The primary reason for New England’s entrance onto that list was the high job losses, particularly in the Boston area during 2000-2002.

Nevertheless, historically low mortgage rates fueled a frenzy of speculative buying and sparked double-digit price increases throughout the region.

Some experts predict that foreclosures on homes carrying subprime mortgages in southern Maine will accelerate in coming years, and that the widespread bad credit mortgage woes gripping much of the country will also slow Maine.

Tougher lending standards are expected to remove 100,000-250,000 potential buyers from the housing market during the next two years, estimated David Lereah, chief economist for the National Association of Realtors.

That by itself could decrease home sales by up to 3 percent, and it’s unlikely the Maine housing market would be immune from any drastic change such as this.

“It’s problematic but not catastrophic,” said Lereah.

He is counting on still-low mortgage rates and a strong labor market to help soften the blow from subprime and Alt-A mortgage problems.

SOURCE: Portland Press Herald




Posted by Richard Barber on Apr 04 2007 under Maine





Maine Mortgage Broker: Source of Problem More Complex

We’ve talked at great length about the surge in bad credit home loan lending over the past five years and the problems coming home to roost now.



But Ed Jurenas, president of the Maine Association of Mortgage Brokers, is taking issue with the recent media coverage in the state insinuating that mortgage brokers are the prime perpetrators of abusive lending practices in Maine. This is not the case, he urges.

The predominance of predatory lending in Maine, he says, has been conducted by out-of-state, non-bank telemarketers - not mortgage brokers.

Lawsuits against Household and Beneficial Finance entered into by various states resulted in the return of $1.6 million to Maine consumers in 2003.

A settlement of $295 million in 2006, again with Maine participating, was garnered from Ameriquest, the nation’s largest direct subprime, or bad credit mortgage lender.

Both of these companies are based outside of our state and have no ties to any Maine mortgage brokers. Yet, a Portland Press Herald editorial cited “predatory mortgage brokers” as the source of predatory lending in Maine.

Is this to say that no Maine mortgage broker has ever participated in abusive practices? Not likely. However, the exceptions hardly prove the rule.

The ranks of U.S. mortgage brokers have grown dramatically in the past 20 years. Today, over half of all residential mortgages annually originated in the nation are from home mortgage brokers, because they generally offer a greater number of mortgage products and services than are available at local banks.

Maine’s mortgage brokers comprise a statewide community of over 150 small businesses comprising an effective, competitive delivery channel for residential and commercial mortgage products.

Their efforts are in no small way a contributing factor to Maine having one of the highest rates of home ownership in the nation.

These organizations have long backed efforts to curb abusive lending practices through both federal legislation and consumer education, and continue to do so with current legislative initiatives before Congress.

The problem of predatory lending must be attacked with precision. Predators need to be driven from the mortgage industry, but what is done to protect some consumers should not prevent other home loan borrowers from full and ready access to credit.

Legislation that disproportionately affects one delivery channel (home mortgage brokers), and not others (retail banks, credit unions and non-bank lenders) in effect creates an slanted playing field with the unintended consequence of limiting consumer access to credit.

It is unfair to both mortgage brokers and to the homeowners they serve that any mischaracterization should arise from the predatory lending debate.

In particular, the unintended consequences of legislation should not make getting a Maine mortgage even more expensive for the consumer.

SOURCE: MaineToday.com




Posted by Richard Barber on Feb 28 2007 under Maine, Mortgage Broker





N.H., Maine Housing Markets Seen as Half-Full

After a tough year in the real estate market, professionals along the New Hampshire Seacoast region say several factors have begun to stabilize and they are optimistic about 2007.

According to the Portsmouth Herald, October represented the low of a year characterized nationally and locally as a “roller-coaster ride” in which home sales contracted and rebounded.

But a resurgence in the final two months, thanks in part to favorable mortgage rates and a steady jobs market, suggests the correction may have passed somewhat unceremoniously.

“Values have fallen, in some cases, to what would have to be described as bargain levels. Interest rates, too, are very, very attractive - at near record lows,” said John Rice, chairman of the Seacoast Board of Realtors.

“While values should continue to slightly decline through 2007 as inventory is absorbed, it is likely that we are near the bottom of this correction.”

Sales of existing homes in the the New England region increased 6 percent to a level of 1.06 million in November, but were 4.5 percent below where they were back in November 2005, according to the National Association of Realtors. The median existing home price in the Northeast was $269,000, down 2.2 percent.

In December, 162 single-family homes went under contract in Rockingham and Strafford counties, an encouraging sign, said Sharon Aldrich of Keller Williams Realty. She said housing affordability is at the core, as rapid appreciation pushed many buyers and scared others out of the market.

“There was quite a large group that were discouraged. People who were not able to buy in the past will be able to in 2007,” she said.

Sales of single-family existing homes in the Maine housing market were down by more than 12 percent from November 2005, with median prices down nearly 4 percent, the Maine Association of Realtors reports. Still, the number of units sold in York County in October-November 2006 showed signs of improvement.

“You can’t keep going up forever,” said Mike Kleist, manager of Century 21 Atlantic Realty in York. “It certainly has slowed down a bit, but it’s hard to tell because it’s typically slow now. Once spring comes, we should know better. I don’t think we’ll have a record year, but consistent.”

Kleist said those who complain about the market now should’ve been around in 1982 or 1990. Those were really slow years, he said.

While the Seacoast is certainly affected by national trends, the quality of life and diversity of the New Hampshire housing market always attract buyers.

The price range of 76 single-family homes for sale in Portsmouth starts at $139,000 and tops out at $9.5 million, while the 84 condominium units range from $125,900 to $1.5 million.

Kleist said the market will flourish again once a compromise is reached between buyers and sellers on the state of the real estate market.

“Sellers need to remember that despite a value decline on paper, in most cases, they will still realize a tidy gain, especially if property has been maintained and updated through the years. Property priced to the market does sell in a timely manner,” he said.

Whether you’re looking for a New Hampshire mortgage or get approved for a Maine mortgage, conditions are ripe for securing a great deal. Take advantage of a buyer’s market and make 2007 the year you achieve your home ownership dreams.




Posted by Richard Barber on Jan 10 2007 under Maine, New Hampshire





Maine Home Builders Adapt to Shifting Market

The foundation is in and workers have begun framing the first home in Gray Goose Estates, a new subdivision in Westbrook, Maine. It’s a 1,400-square-foot cape with a base price of $204,000, roughly $50,000 below the median price in Cumberland County.

That price point is no accident, according to the Nashua Telegraph. The builder, Windham-based Custom Built Homes of Maine, initially planned “move-up” homes, with garages, paved driveways, gas fireplaces and other extras that would sell for $270,000 or so.



But as the Maine housing market slowed and potential customers had trouble selling existing homes, the builder redesigned the project to make it more affordable for first-time home buyers.

The strategy is working. Five of the 20 homes in the first phase went under contract quickly.

Cutting amenities is one way southern Maine home builders are weathering the national downturn. They’re also offering incentives to first-time home buyers, writing contracts contingent on the sale of existing homes and lowering prices.

“We’re trying niches that keep us out of the $350,000 to $400,000 market,” said Ron Smith, owner of Custom Built Homes of Maine.

Some home builders say these adjustments really just reflect a correction, a return to a more-stable construction environment. But housing starts for 60 towns in southern Maine show that the brakes have come on hard.

Through the end of October, the number of new building permits dropped 27 percent from the same period last year. At the same time, average prices continued to climb - at least until recently. They’ve risen from roughly $163,000 in 2002 to $225,000 today, as mortgage loans remain affordable.

Real estate markets are notoriously local.

Maine, with its low population growth, rarely sees the overbuilding and speculation common in, say, Florida or Arizona, where investors have been snatching up cheap home mortgages and buying properties like crazy. Those regions helped send the industry into a swoon last month that saw home building fall to its lowest level in six years, down 14.6 percent.

To move inventory, a survey by the National Association of Home Builders found, 55 percent of builders were offering incentives; 42 percent paid closing costs, and 26 percent were picking up points on home loans.

In some parts of the U.S., a large percentage of potential first-time buyers are walking away from contracts when homes don’t sell, leaving builders with a spate of half-finished homes.

The volatile market is requiring a delicate balance. Builders want to be ready if demand picks up in early spring but don’t want to have too much money tied up in speculative building.

The renewed focus on affordable housing seems to be helping modular home builders, who cater largely to first-time home buyers and empty nesters.




Posted by Richard Barber on Dec 23 2006 under Maine





New England Copes With Vast Housing Market Turnaround

Homeowners across New England seemed to have it all in the first half of this decade: rapid jumps in price made homes stellar investments, and if they decided to sell, buyers eagerly paid top dollar.

But 2006 is shaping up to be the year the region turned into a buyer’s market, with a housing slump hitting New England harder than most of the rest of the country, and predicted to stay that way through decade’s end.

The downturn cuts across the housing spectrum, from Maine to Connecticut. Economists predict New England’s historically volatile market will recover more slowly than the nation’s even if home mortgage costs remain low.

The downturn has sellers going to unusual lengths to unload properties.

The Boston Globe reports that in suburban Somerville, just outside of Boston, an area condo developer trying to sell the last of 18 units slashed prices — to $599,000, nearly 17 percent below what a comparable unit sold for three years in the same project.

“In any other market, this would be gone,” said real estate agent John Schwagerl, who has two potential buyers holding off on placing offers until they can unload their current homes. “The phones are ringing less. But when they do ring, there’s more work involved with it.”

In downtown Boston, the developer of a 14-story condo project held a real estate auction — a sales tool rarely used since the housing downturn of the early 1990s.

Bidders at the Folio Boston project’s October auction snapped up 31 luxury units in less than two hours at an average price of $778,000 — about 20 percent below the average asking price before the auction. The head of the firm that ran the event expects the market slump will lead to more such sales in Boston and elsewhere.

New England saw home prices rise by 73 percent from 1995-2004 compared with 44 percent growth nationwide. Gains in some areas were sharper, with prices nearly doubling in Boston.

Now New England is seeing a return to what it experienced at the end of the last century: prices growing faster than the nation’s through most of the ’80s, only to take a dive when boom turned bust in the 1990s. The region is prone to bigger swings than areas such as the Midwest, making both the ups and downs of real estate far more pronounced.

“The downturn here is more severe because the upside was so big,” said Karl Case, an economics professor at Wellesley College.

New England and the Northeast in general are more prone to wide housing market swings because development is more dense, with less available land to build. There are more restrictions on development, so it takes longer for developers in built-up areas to put up new houses.

The New England Economic Partnership projects the region’s home prices will remain flat through 2010 — in part because of price declines across parts of the region this year — and fall short of the U.S. forecast of 2.1 percent growth per year through the decade’s end.

Among New England’s six states, only Connecticut and Vermont are expected to see housing prices rise at rates above national averages through 2010. Massachusetts mortgage demand is projected to drop by 1.8 percent as the Bay State — the region’s most populous — is hit the hardest.

Meanwhile, permits to build new homes are expected to decline in all New England states through 2010 by 6.2 percent. That compares with a slip of just 0.3 percent per year expected for the nation, which is experiencing faster population growth than New England.

Every state in the region except New Hampshire ranked among the nation’s bottom 10 in housing starts from 2000-2004, the Federal Reserve Bank of Boston reported.

Yet as those interested in buying and selling continue to jockey for position across the New England region, industry officials are reminding area customers that most homes will likely yield some healthy investment returns — provided the owner holds onto the property for a few years.

“People who buy now will come out just fine. People who have a little guts and act now can expect prices will eventually get better,” said Fred Meyer, of University Real Estate in Cambridge.




Posted by Richard Barber on Dec 11 2006 under Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont





New Hampshire, Maine Homeowners Struggle to Sell Homes

The slowing Maine housing market is creating a dilemma for people who want to buy houses at low prices but are having trouble selling their own homes.

Looking to downsize, Cindy Benjamin of Maine bought a three-bedroom Cape last spring for $255,000, or $14,000 less than the asking price. Seven months later, she still can’t sell her four-bedroom colonial, despite lowering the asking price significantly from $425,000 to $378,900.

Area real estate agents say the situation isn’t uncommon.

While this is a good time to buy a house, it’s also a challenging time to sell one.

“I bought at the right time, but I’m trying to sell at the wrong time,” Benjamin told the Concord Monitor.

Sales and prices have been falling in New England and nationwide. Housing prices fell in September by nearly 10 percent across the U.S. compared to the previous year, the biggest decline in 35 years. Massachusetts home loan demand has fallen the most drastically, having boomed so much in the 2000-2005 time period.

• The median price drop in Maine over the past 12 months was just over 1 percent, but the number of houses sold in the state in September plunged nearly 19 percent.
• Many homeowners are finding out the hard way that in order to buy a new house, they need to sell their old homes first — and that’s a catch-22 when buyers won’t bite.

With many analysts predicting no end in sight to the market slump, some people need a reality check, says Cathy Manchester at Keller Williams Realty in Gray, Me.

Start with price, by reviewing the current inventory of homes on the market, how many are in your price range and how long they’re taking to sell, on average.

“You have to know what you’re up against for competition,” Manchester said.

Unless they can handle two home mortgage loans for a while, people need to unload their current home before they can afford to put a new house under contract.

When the real estate market was hot, sellers might agree to a contingency sale in the contract, making the purchase contingent on the buyer selling their house in a set amount of time. But with sales slow and plenty of inventory, that practice has fallen out of favor.

“Sellers now realize that’s a waste of time,” said Leonard Scott, owner of Assist-2-Sell in Falmouth, Me.

In today’s market, he said, a good strategy for people who can handle the hassle is to sell their home and find short-term rental housing. That will give them time to locate the right real estate at the best value, and there should be plenty of options to choose from this winter.




Posted by Richard Barber on Nov 10 2006 under Maine, New Hampshire





Maine Housing Market Raises Questions Over Property Assessments

The cooling real estate market has prompted the city of Ellsworth to delay releasing new property values until late January, the Portland Press Herald reports.

Vision Appraisal just finished its revaluation of properties in Ellsworth, on the state’s upper- to mid-coast. City officials had said property owners would learn their new values in October.

Larry Gardner, who heads Ellsworth’s tax assessor, said he is reviewing all the figures. The city will try to find evidence of any “drop in the housing market” before releasing its assessments, he said.

Over the past 12 months, the median sales price of houses has experienced its fastest decline in 36 years, according to recent statistics.

“That’s one thing that we’re really, really concerned about,” Gardner said, calling it unfair to owners for the city to raise property tax rates at a value the market would not bear.

As the affordability of home mortgages continues to be called into question in the Pine Tree State, sales of single-family homes in Hancock County have dropped 11.36 percent this year over the same time period (July 1 to September 30) in 2005, the Maine Real Estate Information System reports.

The median sales price of a Hancock County single-family home dropped 16.87 percent, from $226,750 in 2005 to $188,500. But home sales in the area have yet to exhibit much movement. Gardner anticipates sending out the new assessments in late January.

“Hopefully, by then we’ll have seen enough trending information,” he said.

Area home appraisal officials issued their preliminary figures to the City Council last month, showing significant increases in property values over the last assessment, which took place in 1990.

For example, the median sales price for an acre of nonwaterfront land in Ellsworth is $35,000, a 300 percent increase. Nonwaterfront residential properties exhibited 91 percent appreciation to an average sale price of $156,500. Gardner said Ellsworth has plenty of time for review, as the property tax bills based on the assessments aren’t mailed until August.




Posted by Richard Barber on Nov 10 2006 under Home Prices, Maine