Dear Friends,
One cannot pick up a newspaper, read a blog or watch a television news program without hearing about the strength of the real estate recovery nationwide. The National Association of Realtors reported a 9.1% increase in units sold in March compared to a year ago. A more encouraging sign was a strong 12.1% improvement in the national median sales price to $185,100. We have seen a consistent trend towards increased volume in recent months, but prices have been considerably more stubborn on the way up than they were on the way down.
The Northeast Region, which enjoys a significantly higher median home sale price of $237,000, experienced an annual price increase of 3% versus March of 2012. Unit volume grew at a more sustainable rate of 6.8%. These broad market numbers do not tell the whole story. We are hearing from our Sotheby’s International Realty counterparts, in the Greater Boston area and surrounding suburbs, that business is booming. They are reporting there has been a clear shift from the “Buyers Market” of the past several years to the early stages of a “Sellers Market.” We are hearing about inventory shortages and bidding wars for homes that may have sat on the market for a year or more in 2010. The trend is more than anecdotal as we enter the peak of the spring market.
Maine feels the benefits when the rest of the country is doing well. Our real estate market is particularly closely tied to the New England states with Massachusetts and Connecticut leading the way as a feeder market for both primary and summer vacation homes. The Maine Association of Realtors reported a year over year gain of more than 8% in single family unit sales combined with a 6.25% increase in the median home sale price for March.
While we seem to be heading into a market with more froth and activity around new “well priced” listings, the shifting trends are not uniform. Not every Maine market has felt the impact of the general market recovery. But evidence abounds in both the aggregate numbers and selected areas. I look at “Pending Home Sales” as the best snapshot of what is actually happening today as sold data sadly lags more than 60 days from when a transaction is consummated. As evidence, review the “Pending” data in the chart below which highlights a 21% increase in “Pending” properties from March 2012 to March 2013. It is even more interesting to note that it exceeds peak 2006 levels. It is clear evidence that the market in 2013 is enjoying a significant boost in buyer activity and confidence.
Along with this activity there is a growing sense of fear on the part of the buyer that the market is slipping away from their grip. While it may selectively seem that way, there are still plenty of terrific buying opportunities out there. It may just be a bit more crowded at the offering table. As sellers had to adjust their expectations for many recent years, the buyers are going to have to have strong representation and an aggressive acquisition strategy to secure the best new listings as they come to market.
In Maine, there are four trends at work, all moving simultaneously but at different speeds, which define the spread of the recovering real estate market conditions. The pattern should advance as follows:
- Areas of High Density and Population will lead when compared to more Rural areas
- Strength moves from the South to the North and
- From the Eastern Atlantic Coastline to the Western Lakes, Mountains and Farms
- Homes offering best relative value will sell quickly while overpriced properties may not sell without a price adjustment
We were very clear in our definition of a “Buyers Market” which is an extended period fueled by declining demand, shrinking unit volume sales, overwhelming inventory, and most significantly declining prices. While I recognize that many will not agree with me (surprise!?), it seems clear to me that we are in the “early stages” of a “Sellers Market” driven by an improvement in all of the aforementioned factors. And while both prices and sales volumes are increasing, we are still a long way from the market peak 7 years ago. The only factor with which we cannot yet be comfortable is the “extended period” of time. Suffice to say the trend this spring is moving to the side of the seller with a quality property at a current market price. At the moment, I do not see this strengthening trend threatened for some period of time.
With the above criteria, it is no surprise that York County was the only Maine county to achieve double digit improvements in both Median Sale Price (11%) and Unit Sales Volume (16%) for single family homes over the past 12 months. Maine has a heavy reliance on buyers coming from out of state, particularly when it comes to summer homes, ski condos or just a second home getaway from the hustle and bustle. The significant improvements in real estate activity in Massachusetts, Connecticut, New York, New Jersey and Washington DC have been a pivotal part of the recovery in Maine.
In closing, we want to let our families, friends, colleagues and clients in Massachusetts know that our thoughts are with them. We have a special kindred spirit and connection with so many in the Greater Boston area. We know the physical and emotional impact of such a tragedy can stay with you forever, but we are so proud of the incredible resources and personal strength that so many brought to Boston in its time of need. Please know we at Legacy Properties Sotheby’s International Realty are here for you, as are many, many other Mainers.
Maine Listings is the source of data, its accuracy cannot be guaranteed.
F E A T U R E D C U R R E N T L I S T I N G S
Click on the office name to view all the listings for each office.
Kennebunk | Portland | Brunswick | Camden
F E A T U R E D R E N T A L S 
Legacy Properties Sotheby’s International Realty is pleased to welcome Janet Moore and Carroll Fernald as Senior Vice Presidents to our team! Both Carroll and Jan are well known and well respected for their real estate expertise in the Mount Desert Island markets. They specialize in high value property sales in Hancock County along with Marc Perry, former town assessor for the Town of Bar Harbor, and Christina Deetjen based in Blue Hill. Their addition gives us the critical mass and Local Expertise to service this terrific Maine location.
A 30-year resident of Mount Desert Island, Carroll Fernald has been practicing real estate for more than 15 years. She holds several real estate designations including Accredited Buyer Representative (ABR), Certified Residential Specialist (CRS), and a designation from the Graduate Realtor Institute (GRI). Carroll’s background in marketing and design has been a great asset for her buyer and selling clients.
A real estate veteran with 30-years experience as a top producing agent in the Mount Desert Island communities, Jan Moore has extensive experience in all aspects of real estate. Trained as a licensed appraiser, Jan expanded her real estate career as a broker, owner, vacation rental business partner, and luxury coastal property specialist. She holds several real estate designations including Accredited Buyer Representative (ABR), Certified Residential Specialist (CRS), and a designation from the Graduate Realtor Institute (GRI). Jan’s experience and professionalism makes her a perfect choice for representing either buyers or sellers in a Maine real estate transaction.
Carroll’s extensive involvement in leadership positions in Maine real estate has included roles as President of Acadia Council of Realtors, Director of Maine Association of Realtors and Mid-Coast Board of Realtors, and the legislative committee of Maine Association of Realtors. She has been recognized by her peers with several awards. Carroll was named Acadia Council Realtor of the year for both 2007 and 2012. Most recently she was named “REALTOR of the YEAR – 2012″ for the State of Maine.
Jan has been extensively involved in the local community. She is currently on the Board of Directors for the Seal Harbor Library and a Director of the Mount Desert Nursing Association. She is also an active member of Seal Harbor Yacht Club, Kinfolk Paddle Tennis, and The Causeway Club. Jan shares a deep affection, along with her friends and clients, for the natural beauty and endless outdoor opportunities available on Mount Desert Island.
The “Local” nature of real estate and the vast statewide, regional, national and international resources available to agents of Legacy Properties Sotheby’s International Realty make for a perfect combination for our clients. Marc, Jan, Carroll and Christina offer our clients a unique perspective from Maine Leading Luxury Property Company. We are very pleased to have such a terrific team of professionals servicing this important market for Maine Real Estate.
- The Real World -
Observations from 2500 Listings and/or Sale
Effective Pricing – Revisited
* Very few properties sell Below market value.
* Very few properties sell Below market value.
* Buyers compete for competitively priced properties. It is more likely buyers will bid over listing price to secure a desirable property than submit an offer on a listing deemed to be above market value.
* Buyers tend to want what other Buyers want. When you price a property competitively, you do not need to leave room for much negotiation.
* Overpriced listings tend to invite Underpriced offers.
* Explain the pricing rationale to satisfy a neutral third party. This is more likely to generate an acceptable offer that a priced based on “Non-Market” related factors such as replacement cost, insurance appraisal, town assessment, outstanding mortgage balance or cost basis.
* Buyers do not value the sellers personal emotional history or attachment to a property. They are looking to create their own, but they are starting anew with a “zero” value placed on its past.
* What a seller “Need to Net” or a “Buyer Can Afford to Pay” are not measures of Market Value.
* Very few properties sell Above market value.
George Ballantyne is a Senior Vice President with Legacy Properties Sotheby’s International Realty specializing is High Value and Hard to Value Maine Real Estate
Bar Harbor, Maine (April 8, 2013)—
