$1.7 trillion lost in 2010! According to reports that is the total value drop in residential real estate this year, coming after an estimated $1 trillion drop in 2009 and a total of $9 trillion since the market’s peak in 2006. In many ways these number are hard to comprehend, especially as they relate to our own little corner of the world.
As the end of the year approaches, everyone on the national scene has a prediction for the future. In most cases it seems that being the loudest and having the boldest estimate of the future is more important than being right! Talking about negative issues always get more press than insightful comments.
In any case, if you happen to watch the Today’s Show you might be familiar with Barbara Corcoran, the self-appointed national real estate expert. Although her predictions for 2011 are dire, she did mention that several cities in the country were posting increases in selling prices. Portland was one of those cities referenced.
She also mentioned that banks were not lending money. Based on our experience this simply isn’t true in Maine, especially if you are dealing with a local bank, which we highly recommend. In a recent conversation with a local lender, I received this update when discussing this very topic:
I do believe that we are making loans and the media is making it sound worse than it is. If the borrowers have good credit, stable work, saved assets – they are not a problem. We have eliminated loan programs that had been used in the recent past – 100% financing, 80/20 loans, no doc loans, stated income/asset loans……we now require borrowers to qualify for the money they are asking for…..we had a 27% increase in loan volume in 2009 over 2008 – 2010 isn’t over but looks like we will do better in 2010 than 2009…..
Other local banks have much the same to say about the state of loans and lending in Maine.
NBC Today Show
As we have reported previously, units sales in Portland in 2010 are basically comparable to 2009. Through November 30th, 381 single family homes were sold this year compared to 388 in 2010. Barring a radical drop-off in December, this is a much better situation than other parts of the country. As referenced in the video, pricing in Portland is up, albeit marginally. The median price YTD is up 1.4%.
Once December is completed, we will have updated sales statistics posted for all of Maine, but concentrating on the towns and cities of the southern part of the state.
Regarding employment, it was interesting to see that Maine’s unemployment rate dropped a tenth of a percent in November to 7.3%, representing the fourth consecutive month of decline. At this time last year the rate was 8.1%. From our own personal experience many of our clients continue to be people relocating to the state.
The purpose of this information is not to artificially raise confidence just to make people feel better – because in the end there is still a lot of competition in the market if you are trying to sell. However, it is important to create a transparency around everything that’s happening in the market, thus ensuring that consumers have confidence that what they hear is indeed accurate.