Extraordinarily sluggish home sales and slowly declining home prices are preventing Maine housing markets from making a full-fledged recovery, but cities and towns throughout the state are hardly experiencing a major drop in home values either.
Maine is turning out to be one of the safest bets so far in the fallout of the U.S. real estate collapse. A slim volume of sales is hand-cuffing the markets and are expected to chill the region’s home sales at a slow pace through 2012.
National headlines over the foreclosure crisis and falling home values have hurt Maine housing markets more than anything else. Housing sales in most of the state have been sluggish but have remained consistent through the U.S. downturn – just not many sales compared to most other regions of the country. Less than 1,000 homes sell in an average month statewide.
While sales move at a snails pace, the number of homes being sold monthly are creeping up as prices decline only marginally. However, home sales are projected to increase in Portland as new home buyers take advantage of record low mortgage interest rates. The influx of retirees to the region is also helping to boost the market. But home values are forecast to drop slight during the year averaging 2.6% less.
In Bangor sales are so slow for any given month of second home and vacation resort condos that some homeowners have offered their own incentives to sweeten the pot and attract a buyer like throwing in washers, dryers and extra furnishings.
Sales should experience the same sort of pace as home shoppers grow accustomed to a smaller number of transactions on deflation of 3.4% by years end.
In Lewiston the volume of sales is hardly changing as prices drop and homeowners hold on to their homes if they can afford to in the current economy. The U.S. foreclosure crisis is hardly effecting the housing market in Lewiston, which is experiencing few foreclosures as a result of little subprime lending during the real estate bubble.
Like most other areas of Maine, Lewiston will sustain the real estate collapse with little major fallout, and is forecast to see home prices decline only an additional 2.8% for the year.