The Maine housing market, aided by federal tax credits for first time buyers has seen home sales rise. But those who work the market wonder if it was just a temporary shot in the arm to push markets forward.
Maine home sales rose as a result of government efforts, but have already begun to show signs of weakening as consequences of the financial crisis impact markets all over one of America’s most scenic states. However, the scenery in Maine is changing as business closures drag on the economy and the financial crisis makes its impact.
Portland saw home sales rise as buyers scrambled to close transactions before the tax credit deadline only to see Congress extend and expand the program to move-up buyers. Whether the new expansionary program will act to improve sales in Maine is doubtful since home prices are still declining in most areas and many owners won’t be able to sell their homes for enough to be move-up buyers.
Fewer foreclosures have kept the market in Portland more restrained from the falling home prices elsewhere. But home values are declining in Portland, just at a slighter pace. Portland should keep a flow of sales in the early part of 2010 as government efforts knock some buyers off the fence to buy homes. Housing Predictor forecasts Portland housing prices to decline just 6.6% for the year.
The economic crisis has been hard for lobster fishermen in Maine, who have had to settle for some of the lowest prices ever for their catch. The downturn in Bangor has been tough to handle as more homeowners chose to walk away from their homes as a result of falling prices. The average slump in housing has lasted just two years before in the market, and this housing bust is already passing that juncture. Bangor home prices are forecast to deflate an average of 5.7% in 2010.
As home prices fell in Lewiston buyers took advantage of the growing inventory of homes to choose from. But as more homeowners lose jobs the economy is in for a longer rough patch before making strides towards stabilizing. Bargain hunters will be back in the market in the coming year even as home values decline at a forecast 5.8%.
In Maine’s premiere second home market, Bar Harbor is having a tough time conquering the obstacles of the financial crisis. Condos are selling for less than what they first sold for new in upscale communities along the Atlantic Ocean. The once growing vacation market has been rattled by the downturn and may take several years to over come.
Now rentals are going for much less in Bar Harbor, and owners are getting anxious about uncertain economic times as fewer vacationers make the trek to the scenic vacation paradise. The downturn may be too much for some new homeowners to wait out, especially those who bought second homes with little down. Bar Harbor will sustain forecast housing deflation of 9.0% in 2010.