As painfully illustrated in the recent Forbes article ranking the best state in which to do business, the Maine population is not growing in any meaningful way.
Yet nationally this is not true. During the past 10 years the population of the United States has grown nearly 30 million. In today’s economic climate we are not building anywhere near enough homes to accommodate this growth. At some point household formation will accelerate and a level of pent-up demand will be experienced.
Across the county, the statistics in real estate are starting to turn with the inventory of existing homes for sale falling from 3.8 million to 3.3 million from October of last year to October of this year. Yes, there is still a large shadow inventory of homes hanging over the market, but actually we could see a major increase in homes sold next year as banks realize that the homes they are holding (foreclosure and short sale) will sell and they could start releasing their inventory more quickly.
This scenario may not bode well for home prices nationally over the next several months, but clearing out this inventory is essential for the market to turn around and many banks are now rearing properties before they sell them so that their REO inventory does not prove to be as much of a drag upon prices.
As mentioned in our December Newsletter, Maine is not immune from the excess of inventory still available.
Southern Maine Home Inventory
The above graph illustrates the home inventory for Cumberland County. Currently there is 10.6 months of inventory available – compared to 13.4 months a year ago. The improvement of nearly 21% is significant, but still a challenge.
With interest rates forecast to remain low for the foreseeable future, we anticipate a continued move to market stability between supply and demand.
If you are interested in reports for Portland or any other local community, let us know and we can prepare a customized report for you.