Tuesday, April 3, 2007
BUYING/SELLING TIPS
HOME BUYING TIPS Make sure your credit rating is at its best. Figure out how much house you can afford. Decide what features you want in a home. Look for a home in a good neighborhood with good schools. Hire a professional real estate agent. Shop for a loan by comparing interest rates, down payments and points. Get pre-approved for the housing loan. Get an inspection of the home you want to buy. Make an offer.Sources: www.hud.gov/buying; www.cnnmoney.com Make sure your house is clean. Remove all clutter and excess furniture. Have closets organized. Turn on lights and open curtains. Make sure windows are clean. Have an inviting aroma in the house such as the smell of coffee brewing or cookies baking. Have the lawn mowed and flowers and plantings maintained. Make sure your front door is in good shape and entryways are clear.
HOME SELLING TIPS
Sources: www.hud.gov/buying; www.cnnmoney.com
Raymond Labonte knew the house he built on speculation was going to sell.
The French cottage-theme house is one of three he's building on Lancaster Lane on the east side of Scarborough, a sought-after neighborhood. The 4,500-square-foot home has a lot of built-ins, custom work, decorative gables, shingle siding. It's not a cookie-cutter home.
What he didn't expect was how quickly the $779,900 home would go.
"It's got to be a desirable location, the house has to be something 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. "But selling it on the first open house was a surprise for us."
That's because there's a nationwide real estate slump. Last year, the median price of a single-family home in Maine rose only $2,000 to $193,000 statewide, 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, apartment condos and co-ops sold dropped from 7.07 million in 2005 to 6.5 million in 2006, according to the National Association of Realtors. Recent gloomy forecasts among home builders and a growing number of high-risk borrowers struggling to make payments also are raising concerns nationwide.
"It's going to be a weak spring," said Steven Cochrane, a senior economist with Moody's Economy.com.
Conventional wisdom holds that most parts of Maine, including Cumberland County, have been and remain buyers' markets. But with the traditionally active spring real estate season here, area Realtors are reporting that the balance may be shifting. Labonte's experience with the open house is an example.
"We're seeing attractive, well-presented properties selling in a very short period of time, with multiple offers in certain price points," said Marie Flaherty, an owner of Tim Flaherty Real Estate in Westbrook, who handled Labonte's house in Scarborough.
David Banks, broker and owner of RE/MAX By the Bay in Portland, said "we are just very, very busy looking at a number of homes that are going on the market."
"We are definitely seeing a lot of people looking to sell, and there's a lot of buyers out there motivated to buy," said Banks. "I think it's going to be another fantastic year."
Banks said he's getting multiple offers for property listings, too. The biggest concern that he hears from buyers, Banks said, is that they don't think there's enough inventory on the market. People have taken their homes off the market for the winter, Banks said, and haven't relisted their properties.
Banks said he's seeing a lot of activity in the $400,000 to $800,000 price ranges.
'BUYERS CAN TAKE LONGER'
John Hatcher, lead agent of the Hatcher Group of Keller Williams Realty in Portland, said he's had multiple offers on four different properties in the last six weeks.
A buyer's agent in his group has clients coming in from out of town who don't want to rush, and they picked 15 properties to get more information on, said Hatcher. A week later, four of those properties were under contract, he said. The properties are in the $250,000 to $300,000 range.
In 2003, 2004 and 2005, multiple offers were common, said Hatcher.
In Maine, the median sales price for homes rose steadily after 1998, with large jumps in the first half of this decade. It increased by $17,000 in 2005 compared to 2004, hitting $191,000.
Today, the market is not so blistering.
"Buyers can take longer to look as a rule, there's not so much as a frenzy as we once had," said Hatcher. "But many buyers are surprised at how swift the market can be."
According to the most recent data from the Maine Real Estate Information System Inc., a multiple listing service subsidiary of the Maine Association of Realtors, the statewide median sales price increased 1.05 percent for the quarter ended Feb. 28, compared with the same quarter a year ago. The number of units sold statewide in that period dropped 3.64 percent.
The experience among coastal counties was mixed.
In Cumberland County, the number of units sold during the quarter increased 7.87 percent; median sales price increased 1.47 percent. York County, meanwhile, saw a 7.64 percent drop in the number of units sold and a 2.08 percent decrease in the median sales price.
New England was one of the first regions to go into a housing slump, slowing in late 2004 and early 2005, according to Lawrence Yun, National Association of Realtors Senior Economist.
The primary reason for New England's early entrance was the high job losses, particularly in the Boston area during 2000, 2001 and 2002, Yun said.
"With such a major market in that region suffering, it sort of naturally spread to the nearby regions of Rhode Island, Maine, New Hampshire," said Yun.
Valarie Lamont, director of the Center for Real Estate Education at the University of Southern Maine, said what the Portland area has really seen is a slowdown of price appreciation.
"Until consumer confidence starts to climb back up, we'll continue to feel effects of the housing slowdown for a little more time," said Lamont.
Yun said there are positive things going on in the Northeast. One is statistical. Because the region went into the slump early, the likely trend is for some positive year-over-year increases in sales and prices.
But the second, he said, is more fundamental.
"The job market appears to be coming around nicely, particularly in the Boston region. It gained 100,000 jobs since the low point three years ago, and that momentum appears to be gaining," said Yun. "That combination will begin to lift home buyers' confidence."
Regionally, existing-home sales in the Northeast increased 14.2 percent to 1.21 million in February, a 3.4 percent increase over February 2006, according to NAR. Sales were flat in January over December, regionally, but were almost 6 percent higher than January 2005.
Yun did say that the collapse of the subprime mortgage market will prolong the slump nationally.
Subprime mortgages are riskier loans made to borrowers with poor credit scores, low income for the size of the loan or spotty payment histories. The mortgages carry higher interest rates and are often more complex, with features such as variable-rate loans that start with low initial interest rates that balloon after a few years, interest-only mortgages that leave the principal undiminished for several years or high penalty charges for early payoffs.
SUBPRIME WORRIES
Some experts predict that foreclosures on homes carrying subprime mortgages in southern Maine will accelerate in coming years. The Center for Responsible Lending projects that 17.8 percent of subprime loans taken out last year in the Portland-Biddeford region will end in foreclosure, with the lender selling off the home. Those foreclosures will add housing stock to the market, potentially further depressing prices.
Flaherty, the Westbrook Realtor, said she's seen pre-foreclosure activity across a range of home prices. That activity represents clients trying to sell their houses before foreclosure.
"I would advise those people that are involved with the subprime mortgage and can't get themselves out, to contact a local Realtor and get advice on getting the home on the market at the right price -- someone experienced with working with lenders to negotiate a successful sale," said Flaherty.
The situation also could affect the market because, pressured by federal regulators, subprime lenders have turned off their spigots.
Tougher lending standards are expected to remove 100,000 to 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.
"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 subprime blow.
The Associated Press contributed to this story.
Staff Writer Matt Wickenheiser can be contacted at 791-6316 or at: mwickenheiser@pressherald.com
Reader comments
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The rent to home price ratio, and the income to home price ratio is still completely out of whack in Maine. Now is not the time to buy.report abuse
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