Archive for May, 2008
Maine Waterfront Property - Local Paper Says the Time to Buy is Now
May 29th, 2008 categories: Observations and Commentary
At the risk of beating the drum once too often, I was reading the local daily, the Portland Press Herald, and on their editorial page they were making note of the recent downward slide in home prices. They seem to see the same silver lining I do. While the lower prices may be a source of consternation for sellers, they are also a source of great opportunity for buyers.
Much is made, the editorial says, about buyers trying to time the market - waiting for the moment the bottom is reached and then jumping in with both feet. As I have opined in a previous post, the editorial says market timing is sheer folly. The editorial ends with these words of wisdom:
“This is likely a good time to buy a home, even if the market hasn’t bottomed out. Sure, maybe in six months you might say you wished you held out a little longer. But then again, maybe not.”
To read the whole editorial click here.
If you think now is the time to start looking for a great Maine lakefront property try our Lakefront Locator. Finding just the right Maine lakefront home has never been easier.
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Maine Lakefront Real Estate Market - Nationally, the Picture is Challenging
May 27th, 2008 categories: Observations and Commentary
In my last blog I passed along some information about the current real estate market that I hoped might shed some light on things here in Maine. Historically, we don’t suffer the severe swings in the market that some other places in the country do. That’s a good thing.
But from the sounds of what the writer below thinks, we still have a ways to go to get back to a more even keel in the national market. It would look like we’re staying in this buyer’s market for another year - at least until there’s some reduction in the inventory.
Remember, though, in the Maine lakefront property market one of the reasons it’s resistant to more national trends is that there is a finite supply, i.e. there’s only so much lakefront real estate. So, my advice, through good times and bad, is to find something you like, negotiate the best price you can get, and go for it.
Use our Lakefront Locator to find just the right lakefront property for you.
Here is the article I promised - not for the faint of heart, but, if you’re a buyer, the real estate world is your oyster.
Do Sharp Cuts In Home Prices Spell Buyer’s Dream Or A Trap?
The latest housing headlines look bleak. The supply of unsold homes hit a 23-year peak last month, the National Association of Realtors said Friday.
Builders have slashed construction, but still-falling sales and a flood of foreclosed homes mean a recovery in prices might be far off.
“We’ve dug ourselves a hole. We just have too many units hanging out there,” said William Wheaton, director of research at MIT’s Center for Real Estate.But there is a bottom somewhere to the housing hole.
Past slumps, especially in hard-hit regional markets, seemed desperate at the time. Still, areas such as California and Texas eventually soared again.
What should prospective real estate investors be watching to catch the inevitable upturn?
Sales and home construction have to stop falling, but that’s only a first step, analysts say. The glut of unsold housing has to come down sharply before prices can bottom. And like the stock market, price is often your best indicator about real estate’s direction.
Real estate slumps are usually local affairs, reflecting natural disasters or regional economic troubles. But the subprime lending crisis has resulted in the first nationwide home-price decline since the Depression by some measures.
States where sales, construction and prices rose most during the lax lending era will take longest to recover, analysts say. Many are located in the West, such as Arizona, Nevada and California. The last time Western states suffered a real estate slump was in the late ’80s and early ’90s after the savings and loan crisis and Federal Reserve rate hikes choked off credit.
In the West, existing-home sales peaked in late 1988 and bottomed in December 1990, with a sluggish, uneven recovery. New housing starts peaked in January 1990 and bottomed in March 1991.
Prices Last To Rise
Prices took far longer to recover. Los Angeles home values didn’t rise year over year until October 1996, according to the widely respected S&P/Case-Shiller index. But they stayed positive for the next decade.
L.A.’s housing revival was slowed by a series of setbacks that included race riots, big aerospace layoffs and the Northridge earthquake.
In the latest boom and bust, U.S. home sales peaked in mid- to late 2005. Unsold homes, after a slow rise, started swelling in mid-2006. That’s when national prices topped, according to the Case-Shiller’s 20-city index.
As of February 2008, home values had fallen 12.7% vs. a year earlier. Monthly price declines have accelerated for the past several months.
Builders have slashed housing starts by 55% from their January 2006 top. Total unsold new properties have fallen. But that’s been overwhelmed by weaker sales and foreclosed homes flooding the market.
Unsold existing homes soared to 11.2 months’ worth at the April sales pace, NAR said. The inventory ratio for single-family homes was the highest since 1985.
“You need to get that down to a five-month range for prices to stabilize,” Wheaton said.
Right now home values, though falling rapidly, are still rich in many markets after their huge run-ups.
Banks are slamming the door after handing out loans like candy on Halloween for most of the decade.
A net 60% of banks tightened standards on prime mortgages, according to the Federal Reserve’s latest loan officer survey. Subprime loans have virtually disappeared.
With prices falling sharply, many credit-worthy borrowers are holding off for a better deal.
Soaring foreclosures are putting downward pressure on prices. That leads to more foreclosures, as borrowers who owe more than their homes are worth walk away.
“Foreclosures aren’t the problem; they’re the symptom. The issue is falling house prices that lead to foreclosure,” said Morris Davis, assistant professor of Real Estate and Urban Land Economics at the University of Wisconsin.
Halting housing’s slide is key to reviving the economy, which has grown at an anemic 0.6% annual rate in each of the last two quarters.
“The fundamental problem for the economy and the financial system is declining home prices. Until prices hit bottom, the economy and financial system will be very unsettled,” said Mark Zandi, chief economist at Moody’s Economy.com.
Prices in some markets have started to stabilize or even pick up a bit. The markets include parts of North Carolina, Texas, Oklahoma, Kansas and New York. But those areas didn’t experience huge gains in the boom.
Southern California sales shot up 22% in April vs. March as prices fell, according to DataQuick. Gains were strongest in hard-hit Riverside County, where overbuilding led to soaring foreclosures and a glut of homes.
But the overall picture is gloomy. MIT’s Wheaton sees prices falling 20% nationally from the peak and maybe 30%-40% in boom areas such as Arizona, Florida and California.
Economy.com sees U.S. prices falling 25% peak to trough.
Both say prices are only halfway to their lows. So many are looking for government help to speed recovery.
“It is critical to stimulate housing demand by inducing fence-sitters back into the market,” said Lawrence Yun, chief economist for the National Association of Realtors.
Regulators have eased capital requirements on government-backed mortgage finance giants Freddie Mac and Fannie Mae. They responded in April with their biggest loan-buying binge in years.The Senate Banking Committee last week OK’d a bill to guarantee refinanced loans when current loan holders agree to lower the principal.The legislation still needs to clear the House and Senate. It’s also not clear if President Bush will sign it.But supporters say that by giving owners equity in their homes again, they’ll be less likely to default.“Government action to encourage homebuying will do a lot to ease the pain and speed up the recovery process,” said Bernard Markstein, senior economist and director of forecasting at the National Association of Home Builders.
Economy.com’s Zandi agrees.
“If policymakers get a bit more aggressive and help with loan modifications, I think that foreclosures could top out by the end of this year and the market could bottom by the spring of ‘09,” he said.
Yet calling a bottom is difficult. The NAR has had to lower its forecasts virtually ever month.
“This boom is not like the previous two or three that we have on record, so the risk is that the correction period will look different,” Davis said.
BY SCOTT STODDARD
Posted 5/23/2008
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Maine Lakefront Real Estate Market - Bouncing Off the Bottom?
May 23rd, 2008 categories: Observations and Commentary
I get emailed a lot of information from, and about, the financial markets. Earlier this week I received an email from one service that talked about the recent stock market gyrations and offered an opinion about what was currently driving the market. Here’s what it said, in part:
“For now, stocks seem focussed on the last crisis – that of the financial/housing mess – which seems to be pretty much over with. At least, almost every week we get more positive news about it.
Recently, we heard from Toll Brothers, the home building company. While the company’s numbers were not brilliant, the Chairman spoke positively about lower cancellation rates and pent up demand for housing. And why should he not? After all, real estate is the one hard asset that has not risen along with commodities. It’s due to have a turn. Besides, once the mortgage rate falls below the inflation rate, buying a home is a no-brainer investment.
So it makes sense that housing starts rose last week. More significantly, housing permits – a leading indicator for not just the housing sector but the economy as a whole – climbed for the first time in quite a while. We also heard from many brokers that the worst of the credit crunch has passed.”
Well, it seems as if some folks think we may be finding a bottom. That’s good news for buyers because the bottom is where, ideally, you want to be buying. It’s also good news for sellers because, once the psychology changes about this market, more buyers will start coming into the market, properties will start selling again, and inventories will be reduced.
Have a great - and safe - Memorial Day weekend! Come to Maine and enjoy the fresh air and sunny weather!
Remember, if you’d like to take a look at the entire inventory of Maine lakefront property for sale, use our Lakefront Locator and find a lakefront home of your dreams.
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Maine Waterfront Property - A Hard Asset That’s Easy to Own
May 20th, 2008 categories: Observations and Commentary
There’s an old adage on Wall Street that goes “Sell in May and go away”. What the swells on Wall Street mean is that there’s historically not much going on in the market over the summer; in fact, the market often drifts downward during June, July and August, so it’s best to just cash out for the summer, then get back into the market after Labor Day.
Well, I have a little amendent to that old adage. I say, “Sell in May and go away - to a nice Maine lakefront property”! Perhaps investors should think about the benefits of exchanging the often volatile liquid assets found in a stock portfolio for the hard assets of a piece of lakefront real estate in Maine.
When you look at your computer screen and see your stock holdings displayed in front of you do you also hear a loon calling? Do you hear the wind in the fragrant hemlocks overhead? Do you see a wide vista of clear blue water spread out in front of you, a boat bobbing in the water down by the dock?
If you’re a little uncertain about which way the stock market is headed, maybe it’s time to think about diverting some of those assets into a lakefront property. Historically, lakefront property has been a solid investment and right now is a great time to be a buyer. There’s a lot on the market, buyers are scarce, and interest rates are low.
If you’re concerned about the real estate market going down, take the longer view. Do you think the value of lakefront property will be higher or lower in five years? My guess is higher. Take any five year period in the last fifty years and you’d be hard pressed to find any five year period where lakefront real estate didn’t go up in market value.
So, go ahead and “sell in May”, but think about transferring that cash into something tangible, something you can enjoy, some place where you can go, where you can listen to the loons, smell the balsam-scented breezes, and feel the tug of a fish at the end of your line.
If you’d like to take a look at what Maine lakefront real estate is currently for sale, use our Lakefront Locator and search the entire state for a hard asset that’s easy to own.
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Maine Lakefront Real Estate - Finding it Your Way - Phase III
May 18th, 2008 categories: Maine Waterfront Real Estate News
For folks not familiar with Maine, searching online for lakefront property can be somewhat frustrating. After obtaining search results buyers have pondered “where the heck are these properties and what is their relative position to each other? ”
Until now, displaying your search results using Lakefront Locator meant listing your results in a variety of ways. You can list results by price, high to low or low to high. You can list results from oldest listings to newest or newest to oldest. All good options, but still not totally satisfying.
Last fall, in response to our annual survey of suggested enhancements, we received a number of requests to plot, or map, search results so that one can see where each listing is in relation to each other.
Mr. Lakefront is proud to announce our new display option. All the list options remain as before, but we are releasing a Map It function. Let’s say that the results of your search number 12 homes between $300k and $400k. If you choose to map your results, each listing will appear as a pin on a map. Clicking on a particular pin will give you basic info such as address, price and size. Also, lake info and position on the lake can be selected. For detailed listing info click listing details for additional information. Go to Lakefront Locator and give it a try!!
PLEASE NOTE: For the next few months it might be advisable to list your results prior to mapping them. Older listings in the MLS still have no street addresses assigned to them so they can’t be mapped. As older listings fall from the MLS they will be replaced with new listings that have addresses that can be mapped. For example in the example above where 12 homes are found between $300k and $400k only 9 pins might appear on the map meaning that 3 older listings have no street address assigned to them.
p.s. I was recently asked by a competitor why the team at Mr Lakefront continues to strive to make it easier for lakefront buyers to find property on-line. “Aren’t you guys working yourself out of a job?” he inquired. My answer is, “absolutely not.”
Making it difficult for lakefront buyers to find property doesn’t increase our value. We believe that buyers need to know what’s out there in order to make an educated buying decision. Our value to the lakefront buyer goes far beyond simply finding possible properties that meet a client’s criteria.
When it comes time to look at property we believe buyers will take advantage of our expertise and contact us. Our participation in the buying process, although very valuable indeed, actually costs the buyer nothing since commission dollars are paid by the seller.
Strange, but true!
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Maine Waterfront Real Estate - In Maine, it’s Not Always About the Money
May 16th, 2008 categories: Observations and Commentary
Visitors to our fair state often never get beyond the idyll of Lobster, Lighthouses, Moose, Loons and Blueberries. A gorgeous coastline, crystal clear lakes, wondrous mountains, wild rivers, cathedral pines and hemlock all make for a pretty wonderful place.
However, a part of Maine few visitors ever get to witness is the one experienced by the average Mainer - high taxes, limited opportunities and few high paying manufacturing jobs. Only the most ardent free trader would say that NAFTA is good for Maine. Could H. Ross Perot have had it right after all?
Folks who choose to live here understand that there’s more to life than making a buck. It’s not always about the money. While folks “from away” buy up the beautiful lakefront property, many locals live in substandard housing down dusty dirt roads. Do Mainers resent “flatlanders” or folks ‘from away’? Maybe - sometimes - on occasion, but I seldom, if ever, see it. Pretty remarkable, I think.
Over the years, however, I have encountered poverty first hand. About 10 years ago while still in the corporate world, I visited Jacobsen, the turf equipment people in Racine, Wisconsin. The plant was in a run-down part of town. I stopped into a grocery for a cup of coffee and witnessed a down-on-his-luck guy buying a single cigarette for ten cents. The clerk behind the counter had an open pack of cigarettes and sold cigarettes to folks one at a time. The shopkeeper new what his customers could afford and made an effort to serve them.
I remembered that incident this past week. As Mr Lakefront, I have the pleasure of traveling to a lot of small towns all over Maine. Passing through Buckfield the other day, I stopped into the local grocery/convenience store. At that store in Buckfield one can buy a ham and cheese sandwich, a bag of chips and a 12 ounce can of soda all for $1.99. Now there’s a merchant who knows that even the less fortunate among us deserve an affordable lunch. I will always stop and buy something at that store.
On the other hand, one of my favorite convenience stores, a local store here in the Sebago Lake region, has changed hands recently, the new owners determining that city life and corporate jobs are no match for the simpler life in Maine.
I stopped in the store the other day and was greeted by bright lights and a renovated interior. The store was no longer dark inside. In fact it was as bright as any 7-11 you would find in a city. I checked the hot food container for the “to-die-for” chili dogs, but they were no where to be found. I did see a pizza, lazily turning in the hot food container. A bit dissapointed that I would not be enjoying two red dogs with chili, I ordered the next best thing - a slice of pizza.
The clerk said that will be $4.00 please. I said “WHAT???”. I may pay $4.00 for a gallon of gas, but I will never pay $4.00 for a slice of pizza! The clerk said to me, “You don’t understand sir, our slices are one quarter the size of the pizza.” I said, “You don’t understand. I don’t want a quarter of the pizza, I just want a slice.” I walked out empty handed.
I have a feeling that maybe one of the new owners has a degree in Marketing and believes that 1- people spend more money in bright places than in dark places (I’m not sure of that one) and 2- people will spend $4.00 on a slice of pizza, if you ask for it.
While most of the changes to this local convenience store are welcome and long overdue, I think the new owners need to visit the store in Buckfield and learn something they didn’t in Marketing 101. And that is, it’s not always about the money. Sometimes less is more. Especially here in Maine.
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Katahdin Stands Guard Over Beautiful Maine Waterfront Property
May 14th, 2008 categories: Observations and Commentary
An exciting wilderness adventure awaits anyone who visits this area no matter the time of year. The Katahdin Region offers a fantastic family experience whether its for the wildlife and wilderness enthusiast or the sporting adventurer. There are miles and miles of terrain to be explored by any hiker, hunter, or fisherman.
The lakes, rivers and streams are considered among the best in the world for kayakers, canoeists, and whitewater thrillseekers. In the winter season snowmobilers will find hundreds of miles of groomed trails offering spectacular scenery.
Located just an hour’s drive from Bangor and easily accessible from the Interstate, the Katahdin region is home to Baxter State Park and Maine’s tallest peak, Mt. Katahdin. Baxter State Park is a wilderness area of over 200,000 acres, intersected by more than 175 miles of hiking trails including the eastern end of the Appalachian Trail.
Despite its remoteness, the Katahdin Region offers its visitors and residents a high quality of life. The school systems in the Millinocket area are outstanding and offer students a wide variety of extracurricular activities. First quality health care services and facilities are found at the Millinocket Regional Hospital and there are two medical centers in East Millinocket. The community recreation resources include swimming pools, tennis courts, baseball and soccer fields, basketball courts, a golf course, and launch ramps for boats.
Boaters, fishermen and lakefront property buyers know that most lakes and ponds are found in the southern end of this region. Find here Schoodic Lake, Seboeis Lake, North and South Twin Lake, Upper, Middle and Lower Jo-Mary Lake, Millinocket Lake, and Dolby Pond. In the upper end of the region are Caribou Lake, Chesuncook Lake, and Telos Lake.
Whether you’re a fisherman, hiker, snowmobiler, or just a lover of nature and wilderness, this region is for you. Come and enjoy the Appalachian Trail, Gauntlet Falls, Gulf Hagus (called “the Grand Canyon of the East”), and discover the southern edges of Maine’s Allagash Wilderness Waterway. Thrill to wildlife in its natural state, gaze upon the awesome scenery, and ponder a future here - with you in it!
Lakefront Locator will get you to available listings in the Katahdin Region. LakeSmart is a research tool that will give you important information about area lakes.
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Maine Lakefront Real Estate - Jetski Update
May 12th, 2008 categories: Observations and Commentary
In a blog post on April 14 I questioned the timing of a legal action taken by a jetski owner who was challenging the state’s right to prohibit jetskis on a particular lake.
At that time I said that he was kicking a sleeping dog that might just turn around and bite him. I said this because I sensed a change in people’s attitudes ever since last summer’s horrific power boat accident on Long Lake. More and more folks want to do something about wild and reckless behavior on our beautiful lakes and ponds.
Well, this week the Supreme Court for the State of Maine ruled that the state had the right to prohibit jetskis from any lake or great pond. SEE FULL STORY.
I don’t know whether the owner was working alone or whether he was egged on by special interests, but he made a bad miscalculation - a miscalculation that, in a way, affects us all. The result is less personal liberty for all of us because of the wild and reckless actions of a few.
Up here in Maine the Yankee spirit lives on. Rugged individualism, personal liberty, individual responsibility are not dead concepts from dusty history books. These ideas are still alive and well in Maine. But, less so today than yesterday.
Most folks are tolerant of jetskis. The attitude is “live and let live“. The prevailing feeling has been “there’s nothing we can do about it anyway“. UNTIL NOW.
The fact that here in Maine communities could petition the state to actually outlaw jetskis was not widely known. Now, due to the press coverage this case received, I predict that folks who have begrudgingly “put up“ with jetskis in the past might decide to work towards their prohibition on their particular lake or pond. Is this a good thing?
Mr Lakefront’s attitude is the same as Rodney King’s “Can’t we all just get along?“
Snowmobile clubs in Maine have done a great job “going mainstream,“ becoming good and solid citizens by being responsible and sensitive to others. Jetski owners should take note and follow their example. Otherwise they’ll be fewer lakes and ponds that welcome them in the future.
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Maine Waterfront Property - Land Prices Reflect Quality of Water They’re On
May 8th, 2008 categories: Sebago Lakes Region
I had a customer recently who inquired about a waterfront land listing on the west shore of Kezar Lake in Lovell. This property is 1.96 acres with 438 feet of shore frontage and lists for $625,000.
After I sent him the listing information he sent me back an email that said, “What makes this, less than 2 acre, plot so expensive? At over $600K for 2 acres, I would expect a house, etc. on the property.” Indeed.
I told him that there were two key factors at play here. One is that there aren’t many nice private, buildable lakefront lots out there for sale. The second is that Kezar Lake is one of the most desireable lakes in the area. That combination keeps the price on the high side.
Now, while I don’t think there is a line of people ready with full price offers beating down the door of the local real estate office, this asking price is probably not too far off the mark. In fact, there’s another lot right beside this one that is 1.13 acres with 150 feet on the water that’s listing for $675,000! Last year a lot on Thompson Lake in Poland that had 600 feet on the water sold for over $1 million. Kezar and Thompson are two very sought after lakes.
Take those same lots and move them to smaller bodies of water and the price goes down. Move them to bodies of water further north in the state and the price will also go down. Yes, it’s the old “location, location, location” song that the real estate market sings. Generally speaking, the smaller the body of water the smaller the price for the land around it - relatively speaking, of course. Go up north and the price goes down, too.
In the same town that Kezar Lake is in, Lovell, there’s another body of water called Bradley Pond. It’s probably not 50 acres in size. There’s nothing wrong with it - it’s just small, that’s all. There’s a land listing with shore frontage on that pond - 6.5 acres and 665 feet of frontage. The asking price? $187,500.
Now there are, of course, other mitigating factors on these land values besides 1)buildable lakefront land scarcity and 2)the lake they’re located on. For instance, what’s the slope to the lot, will the soils condition allow a septic system, what’s the entry to the water like, how good is the water view, is it private, what’s the vegetation, and are there accessability issues.
But desireability of the lake and the size of the lake play a big role in the price of the land that touches it’s waters. One of the keys to knowing lakefront land value is to know your lake.
To take a closer look at the land listings referenced in this blog posting by using these hotlinks:
Lovell - Kezar Lake - 1.96 acres - 438 feet of frontage - $625k.
Lovell - Kezar Lake - 1.13 acres - 150 feet of frontage - $675k.
Lovell - Bradley Pond - 6.5 acres - 665 feet of frontage - $187,500.
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Bangor is Central to Central Maine Waterfront Property
May 6th, 2008 categories: Maine Waterfront Living
The Bangor Region is centrally located - and some would say, ideally located - in the state of Maine as it serves as the gateway to the Katahdin/Baxter State Park area to the north and the Bar Harbor/Acadia National Park to the south.
The area is surrounded by all the natural beauty that Maine is famous for - our rugged ocean coastline, majestic mountains, a mighty river - the Penobscot, and many beautiful, clean, scenic lakes and ponds.
Bangor, central Maine’s queen city, was once the lumber capital of the world. Now it has a more cosmopolitan flavor, featuring many fine restaurants, interesting shops, and much in the way of cultural events and performing arts.
The Maine Turnpike bisects this region, providing easy access to all its lakes and ponds. From Dover-Foxcroft, Milo, and Howland in the north to Bucksport and Unity in the south, the Bangor Region features many small towns and many attractive lakes and ponds as well.
The larger ones to look for are Sebec Lake, Sebasticook Lake, Pushaw Lake, and Branch Lake. Some of the popular smaller lakes and ponds are Phillips Lake, Green Lake, Lake Winnecook, and Cold Stream Pond. These area lakes and ponds have been enjoyed by locals for generations and are now becoming discovered by people “from away” as places to retreat to while providing a jumping off place to discover the natural wonders of Maine that lie within easy driving distance.
Lakefront Locator will get you to available listings in the Bangor Region. LakeSmart is a research tool that will give you important information about area lakes.
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Tom - MrLakefront
