Maine Real Estate: It's about Quality of Life Value

A Member Perspective:

In the crazy days of the real estate bubble it became all about the retail value of real estate: quick turn arounds - grab it while you can - it's got no place to go but up - and less about the individuals. No doubt, real estate has a retail value but it is not the best value, I believe.

The real value of real estate is the Quality of Life value.

Where do you want to live; where do you want your children to grow up; are you happy when you drive up to the house after a long day's work? Those values should be the ones we should never forget, and yet it happens every time there is a Seller's Market. Buyers get in a frenzy and purchase just about anything and they expect prices to go up.

People forget that we had another bubble that burst in the early 90's. By mid 90's many believed owners lost about 20% of their value if they purchased in the late 80's - only if they sold. By the late 90's they were either breaking even or actually making money on their home investment. All the while, they were enjoying the quality of life generated by their homes - retail value aside.

I doubt that concentrating on Quality of Life issues would have stopped the latest bubble. However, it would have set the right expectations that the year to year change in retail value is less important than living in and enjoying their homes.

So, let's learn for the last time - single family housing should be about Quality of Life and not necessarily the retail value at any given time.

Submitted by Earl Black (Better Homes and Gardens Real Estate Town & Country, Bangor. Earl is also a past president of the Maine Association of REALTORS.

Countdown Until the $8,000 Tax Credit Ends

Create clock for your site using this link: http://www.oneplusyou.com/bb/countdown

You can use colors that match your site - Change date to November 30, 2009 and use text THE $8000 TAX CREDIT ENDS

Note: You'll need to remove the text (in html) that says "Created by .... " if you don't want that to appear with the clock

Press Conference for "Gift of Green" ...

MAR President Rita Yarnold relays: Last week, a press conference was held at the Greater Portland Board of REALTORS office. Governor John Baldacci and Dale McCormick, Director of Maine Housing, announced the new Gift Of Green Program sponsored by MSHA.

I was honored to introduce Governor Baldacci and thank him on behalf of Maine REALTORS for this incredible program, which we believe is the most innovative approach nationwide for both maximizing the federal homeownership stimulus funds and improving energy efficiency in Maine homes.

After Governor Baldacci announced the Gift Of Green, there was a question and answer period which included Ms. McCormick, Chris Pinkham, President of the Maine Association Of Community Banks and John Murphy, President of the Maine Credit Union League.

Highlights of the Gift Of Green include (see link for more details about program & limits):

It's a grant, a non-payable gift of $5000

The current rate with no points is 5.25

The Borrower must contribute at least 1% to the transaction

The 1% may be a gift from a family member

Still take the Federal $8,000 First Time Home Buyer Tax Credit

Borrower must complete a 10-hour class

Includes a coupon for an energy audit

This is an amazing opportunity for Maine REALTORS® to acquaint their Buyers with the Gift Of Green, to ensure that the we keep Maine's economy on the road to recovery!

Rita Yarnold (Bay Realty Associates, Portland) is the 2009 President of the Maine Association of REALTORS

Gas prices impacting real estate world ...

Thoughts from MAR past president E. Pat Foster:

Gas prices have definitely impacted the real estate world ...

* Attendance is down at broker open houses ... and educational and board meetings
* Some agents are starting to more clearly define their "territories" with buyers, and referring them instead of driving long distances
* Listing agents more inclined to use lockboxes ... and, although typically continue to show their listings … are now starting to embrace the lockbox concept (no driving to get keys)
* Carpooling to meetings/events now being offered more often
* Caravan type schedules for open houses are being coordinated
* Noticing more people walking to the bank and post office ... and starting to notice buyers asking how far a property is to area amenities (buyers considering distance too)
* Traveling distances for state meetings can be quite a stretch; coordinate multiple live meetings/events, offer more webinars, and email voting instead of ‘face to face’ meetings

Coming Soon ...

MAR is finalizing details on our major public relations and social media effort, "Your Piece of Maine", which kicks off April 15. And a new acronym: YPOM. Here's a first look.

Able to buy the house of their dreams ....

This from an article in the Kennebec Journal (3/27/08):

"Thanks to a drop in prices, favorable interest rates and a glut of houses to pick from, the Hamels were able to buy the house of their dreams. Their offer was accepted a few weeks ago, and they will be moving in soon.

'We found a deal,' Wendy Hamel said.

For buyers who felt shut out by the booming housing market for most of this decade -- and who can still obtain loans in this time of tightening credit requirements -- the downturn in the economy has presented new opportunities.

That's one bright spot to be found in the slowdown. And despite the parade of bad news making headlines recently, there are others."

Maine named Second Safest State

In its annual State Crime Survey, CQ Press, a division of Congressional Quarterly, has ranked Maine as the second safest state in the nation. This is the fifteenth year in a row that Maine has been reported in the top three safest states. New Hamsphire ranked first, and Nevada last.

Alicia, if you love the house, buy it

MAR President Patti Lawton moderated the real estate economic panel at the 2008 New England REALTORS Regional Conference (NERC). Panelists included Lawrence Yun, NAR's Chief Economist and Alicia Sasser, Senior Economist at the Federal Reserve Bank of Boston's New England Public Policy Center.

They reviewed economic and policy issues impacting real estate in New England and provided their outlook. Presentation materials (Powerpoint and printable documents) for both economists are at this link under Presentations. The best quote came during the question and answer period when Alicia Sasser mentioned discussing a home she loved and was considering buying with another Boston-based economist.

His response to her, "Alicia, if you love the house, buy it. What are you waiting for?"

Pictured: Lawrence Yun, Patti Lawton, Alicia Sasser

It's TIME to get serious ...

Time Magazine recently featured a story "Ignore the Headlines" that tells the message: "But let's say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It's time to get serious--before an inevitable rise in interest rates wipes out your advantage. "

NAR President Dick Gaylord gives his thoughts about the article on the NAR President's blog.

Whining is not an option

Best-selling marketing author and blogger Seth Godin posted this advice for real estate agents today:

"If you’re not going to be able to make a living ... by selling houses the way everyone else does, by using the never-ending rise in real estate prices to make sales, then what are you going to do? Whining is not an option. In fact, I think this is an extraordinary opportunity for you. Without a frenzy, without short-term competition, you can actually build assets that will pay off for the long run. I have two in mind ... "

Note: Picture of Seth Godin from NAR Convention in Las Vegas.

The local story isn't quite so bleak ...

These excerpts from a Bangor Daily News OpEd written by Jane Irving: "The national news is replete with stories about low consumer confidence and the subprime mortgage crisis. But the local story isn’t quite so bleak. Last week in "Bangor: Real estate trade ‘fairly stable’ despite dip" (BDN, Jan. 19), the Bangor Daily News correctly reported that the Bangor real estate market is showing evidence of good health in the face of the larger storm . Realtors Earl Black and Jon Dawson referred to stability and opportunity in the market. While I sit in my lender’s chair, I see the root of some of that stability.

As a local bank, we are experiencing consistent growth, and this is an important bellwether of our local economic conditions. Our mortgage lending team is meeting with business and home buyers alike at all hours of the day and night. From coffee before work to phone calls well after hours, Maine people are still looking for mortgages. Fortunately, banks are still very much able to lend, because of a significantly greater stability than many of the mortgage lenders who have had so much trouble this year.

Should Mainers be worried?

Bankers field calls from home buyers who find themselves stuck in "dry closings" because of mortgage lenders who have no money to lend. Though this causes great hardship and inconvenience to people all over the country, many people in Maine are finding that this does not mean that the loan they need is inaccessible.

There are still a variety of stable lending sources and innovative lending products that can help all types of buyers: first-time home buyers, experienced buyers and those looking to refinance.

Because Maine residents have access to stable financing, and we tend to be less susceptible to the swings of the market that are roiling places like Florida, real estate has the potential to be a bright spot in Maine’s economic health. Even as the speculative market continues to contract this year, buyers may find themselves well-positioned for sensible investments …

Despite daily reports of the tough situation around the country, the Maine market is holding its own. At our bank, we are not seeing major foreclosures, and we continue to help new customers with a variety of stable loans and services … "

Note: Jane Irving is a senior vice president at Bangor Savings Bank