Fewer new homes will be constructed in Maine in 2009 than at any time since the 1980's. The downturn in home building ripples through the economy, affecting everything from retailers selling building products to appliances and furniture. The gloomy housing forecast is just part of the troubled Maine economy, which will see fewer tourists flock to its state as the fall out of the credit crunch spreads.
In Maine, spending cuts in education triggered by the national economic meltdown have school officials struggling to try and figure out where to make cuts from athletic programs to regular school classes. Some lobster fishermen have been selling their catch out of trucks for as low as $3.99 a pound, prices that haven't been seen in years.
As the virus from the credit crunch spreads like an epidemic with no cure, officials from Kittery to Fort Kent are looking for options to save programs and where to make cuts. Even at the bargain basement prices, many can't afford to buy lobster, a staple of the Maine economy.
The sales of homes are falling in Portland, once seen as a boom town during the real estate frenzy. But in Portland like most of Maine the housing boom didn't explode with double-digit appreciation, which theoretically should act to support the market from rampant housing deflation. Still, Portland home sales are off in double digits as values decline in the overall market, which is forecast by Housing Predictor to see average values drop 13.3% in 2009.
 |
| City |
Forecast |
| Bangor |
− 12.8% |
| Portland |
− 13.3% |
| Bar Harbor |
− 14.2% |
| Lewiston |
− 13.2% |
The abundance of foreclosed homes and an increasing inventory of properties listed for sale are pressuring the market in Bangor, where home prices reached their highest level in history during the boom before the market stalled. The downturn may be especially difficult for Bangor, which depends on tourism for so much of its economy. Bangor housing values are forecast to deflate 12.8% on average in 2009.
In Lewiston, a growing selection of foreclosures is giving bargain hunters a healthy supply to choose from. Homes are taking more time to sell as the inventory swells. Lewiston is projected to see its inventory nearly double through 2009 as more and more homeowners default on their mortgages, and is forecast to witness housing deflation of 13.2 in 2009.
A growing resort market produced record home and condo sales in Bar Harbor in the northern reaches of Maine. Vacation and second home buyers flocked to the scenic area for its gorgeous Atlantic sea views. Now, the housing market has slowed after the stock market crashed and many investors are unable to buy property. The fall out has left a surplus inventory of homes and condos on the market as foreclosures climb. The second home market to a large extent is composed of baby-boomers and retirees, who no longer have the extra money to make purchases in the current economic climate. Bar Harbor is forecast to sustain average housing deflation of 14.2% in 2009 before the market turns.
