Unemployment DOWN in Portland, Maine, Mortgage Rates rising

OK I admit it has been way too long since I have written on this blog. That's what happens when one gets busy with work and life! Time to make time to communicate my observations on the real estate market in Portland, Maine.



This has been a fabulous year for my group (http://www.wesellmaine.com/), and I attiribute that to a combination of the now defunct tax credit and hard work. Now we are heading into a new year and a new market and I ask, "Where are the buyers?"



To cut to the chase, we hear all sorts of whining about the 9 plus percentage unemployment in the US as a whole. But that is a red herring when it comes to Portland, Maine.



Recently named one of four markets in the USA where the value of real estate is rising (Today Show), one need only look at an adjusted unemployment rate of 5.5% in Cumberland County ( OCT ME DOL stats online)to realize that we are NOT in the dire straits of the rest of the country. In fact, since its high of 7.3% in February of this year, Portland, Maine has knocked off almost 2 % from its unemployment rate. My guess is that unless you have a government job, which may see some attrition this year, you are probably OK job wise.



What stirred me to write this blog today is that CNBC just noted that mortgage rates are now over 5% on 30 year conventionals. This is a jump from the 4.3% rates seen this summer. We are back to rates seen early this year and they aren't coming back down........we have seen the bottom!



What does this mean for you as a potential homebuyer? Job security is looking pretty good compared to the rest of the country, housing prices are starting to rise and rates are going up and are NOT COMING BACK DOWN!



Buy now, potential buyer! Buy now!

Interest rates will rise

Yup....you are hearing it here, but did you know that as economies improve the Fed will be forced to increase interest rates? Used as part of the "toolbox" available to market regulators, interest rates tend to increase when inflation is on the rise. Inflation occurs when there is too much money chasing too few goods.(It is actually more convoluted than that...) People are afraid that the Fed has put too much money out there for the volume of goods being produced.
However, unemployment is still high, so the Fed is artificially keeping rates low for the time being, in an effort to assist businesses in getting affordable credit to create jobs. If people go back to work, more goods are produced and consumer demand increases......well, you get the general picture.

Eventually, rates will need to increase, or be increased, to remove money from the system. The hard part for homebuyers is that mortgage rates will increase , also, as the rates are tied to long term treasuries. For every quarter point of a rate increase, the homebuyer's monthly payment increases. This can limit the price of a house one can afford.

Why wait?? House prices are LOW, mortgage rates are LOW! A buyer can get the best deal seen probably since...........this writer doesn't know when!

NOW IS THE TIME!!!

Update on MSHA program

I have done a little more research and have talked to a lender who is as familiar with the program as can be at this point. It is actually a credit of UP TO $5000 but no more than 4% of the loan amount. The borrower must contribute 1% of the loan amount. Under programs such as MSHA/FHA this can be a gift. The program ends November 30, 2009. Hope that is more clear!

I strongly encourage any borrower to consult with a loan officer regarding whether or not this makes sense.

There are income limits ,also, that apply!

Maine State Housing Offers $5000 to 1st Time Buyers

I just learned today that MSHA (Maine State Housing) has finally launched their "Gift of Green" program. This program offers $5000 that can be put towards closing costs, down payment, or escrow funds. There are also coupons for up to $500 for energy audits. The money is limited to approximately 500 buyers. There are upper income linits. This is in addititon to the $8000 tax credit being offered by the Feds. For more information go to www.mainehousing.org.

Where did the time go or Tempus Fugit!

I have been extraordinarily busy with first time homebuyers in the past week. They are all smart as heck to be out there looking and putting houses under contract while the sun is shining and the rates are still low. My little Wall Street prognosticator friends say all signs point to higher rates, sooner rather than later as the economy bumps and jolts out of its latest swoon.

As I have repeated frequently, there is $8000 out there waiting for you if you have not owned a house in three years. Why not take advantage of that? If you need to work out the credit blues, get hooked up with folks who can help you raise the scores. Believe it or not, you can get a 100% loan with a 640 score through RD guaranteed. Find someone who knows how to find out if you qualify!

The sun is out. Summer is around the corner........the time is NOW!

Who is working for you?

When teaching first time buyer classes, I am frequently asked "How do I find a broker?" The search is simple.

Get the names:

1) Ask other people whose opinion you value whom they would recommend. Make sure their recommendation is based on their own experience!
2) Attend open houses and check out the agents holding them Ask anyone of interest if you can make an appointment to interview them. After all you are looking for someone to hire!
3) Go online and check out websites.

Got the names? Then interview your choices. Any agent worth their salt will be happy to arrange a time for an interview. If not, scratch them from the list!

At the interview, ask the agent how many transactions they have closed in the last twelve months. You want someone with transactional experience in this market! If they don't close at least one deal a month, I would want to know why not?

Another critical factor is their knowledge of the financing options out there. If they have no experience with the intricacies of FHA, don't know about spot financing, or have no clue about how short sales work, move on!!

Finally, how well do you "click"? You will be entrusting this person with one of the largest financial transactions you will ever make. Are they up to the task?

Ask for references if need be then decide who will be the best fit for you! And, importantly, don't let anyone sign you into anything before you are ready. It is ok to ask to get back to them later. A high pressure sales person is probably NOT the best choice for an buyer agent. You want the choice of house to be something you are comfortable with, NOT something you felt pressured to buy.

Good luck! By the way, we specialize in first time homebuyers and would be pleased to interview with you for this job!

Letter to Senator Collins

Here is a letter I sent to Senator Collins. She needs to be complimented for not taking a partisan stand!!Senator Collins:



I want to personally thank you for taking a courageous stand in the face of your own party to get the Economic Recovery Plan out of the gate. I think that to do nothing would have been horrific. You and Senator Snowe truly represent what is best about Maine!



I am writing today as a person who absolutely believes in the principles of abundance and prosperity. Even though the real estate market has seen better days (!!), I continue to thrive and do well albeit it is like slogging through mud at times! I spend money when it makes sense and remind myself every time I pay my bills that I am increasing the prosperity of those around me. If I were to sit on my money, someone else will lose their job or go hungry or what ever…..



This brings me them to a recurring thought I have had regarding the so-called hoarding that is occurring with the banks and other financial institutions. I understand that they are offsetting losses on the balance sheets, but can’t something be done to get this situation reversed where there is a reward for putting the money back out in the system? After all, money is really a symbol for time, effort, power, values. It really belongs to the universe, not to individuals or entities. It can be such a force for good. It doesn’t do anyone any good figuratively sitting in a vault somewhere.



Along those same lines, has any thought been given to requiring that those entities who are benefiting from the taxpayers’ money, whether they be students receiving subsidized loans or financial institutions receiving TARP funds, give back to the country in time and effort assisting those less fortunate? ….or assisting communities or states with needs that are going unaddressed? It’s just a thought.



Thanks for listening. Maybe I am a pie eyed idealist, but I truly believe that together we all achieve more.



Keep up the good work !



Warmly,



Jean-Marie Caterina



Find out what's selling in YOUR neighborhood!

Free report at www.wesellmaine.com . Scroll down to "What's Sold" icon at bottom of page.



Jean-Marie Caterina, Broker

Caterina MacLean Group

Keller Williams Realty

50 Sewall Street, Second Floor

Portland, Maine 04102

(207)553-2606

Fax-(207)879-9801

jcat@kw.com

www.wesellmaine.com

www.catscomments.com (Blog)





We are NEVER too busy for your referrals!

Maine Home Sales 2008

MREIS PRESS RELEASE - HOME SALES IN 2008: Single-family existing home sales in Maine fell 15.8% in December 2008 and 20.9% for all of 2008. According to MREIS, 9,502 homes sold last year, compared to 12,014 in 2007. The median sales price decreased 12.63% in December and was down 7.22% for all of 2008. The median sales price indicates that half of the homes were sold for more and half sold for less. The statewide median sales price in Maine was $99,990 in 1998. The statewide median sales price is $180,000 for 2008 - showing considerable long-term strength. Nationally, sales of single-family existing homes dipped 1.4% in December 2008. According to NAR nationwide sales for all of 2008 dropped 11.9%. In the Northeast, home sales decreased by 14.3%. The complete press release is posted at http://mainerealtors.com.

Seven Months Inventory- Portland, Me

Did an absorption rate for my clients yesterday and learned that in the 150 thousand to 200 thousand dollar range, there is a seven months supply of houses. Man.......that means it will take seven months to clear out the current inventory IF no other houses come on the market.

Well.....guess that means that the buyers should come off the fence and get going as interest rates have ticked upwards a bit since two to three weeks ago.

Buyers ask me, will I lose money? My answer...no, honey!! Buy now and live in your house for more than three years. You will see the equity increase over time. It always does!

For those of you with money burning a hole in your pocket.......get investing. You buy when it is low and sell when it is high! Guess what!!!? It is time to buy.

Have to sell??? Get a good and ethical broker to help. Get someone with loads of experience. (Like me! Mike and I did 36 deals last year) Do NOT entrust your house to an agent who is part time or dabbling. This market is NOT for the faint hearted.

There is only today! Go and make the most of it.

Is There Blood On The Street ???

I believe that it was Rockefeller who said that one should buy when there was blood on the street (Wall Street). Warren Buffet believes the same. In other words, buy when things are low, sell when they are high. Hello..........it is a BUYERS MARKET!! If you have decent credit and a little bit of money saved, why aren't you buying?

This same edict works for sellers. If you have equity and have owned your house for awhile, why not buy the house of your dreams when you can get a great deal on it?

Interest rates are low, banks are lending (believe it or not!), sellers are willing to be creative. The world is NOT coming to an end.

I have posted the most recent stats for the rolling quarter July to September 2007 compared to the same period 2008 in the prior post. While sale numbers have declined and prices have also come down, this means one thing for buyers - housing is becoming more affordable. As we move into the traditionally slower Fall market, the smart buyer is out looking for that perfect house at the perfect price. Watch the absorption rates, as they move closer to 6 months supply demand will begin to pressure prices up and there will be less deals to be made. Watch for my entry on the absorption rates for Portland, Maine!

Buyers--------get out there!!!!!