Maine

The housing slump is starting out slowly in Maine, and like many areas of the country that have a slower pace of housing sales they’re just getting a grip on things. The state that gives us those great big Maine Lobsters is seeing its real estate markets bog down after years of consistent appreciation driven by lower interest rates and creative financing.

Despite the slowdown in sales, Maine is actually one of only two states in the northern tier of the U.S. that has gained population in the last year. The increase of 2,297 residents is marginal at best, but it does show that Maine, which has increasingly lost population due to a lack of employers is beginning to change. The younger generation has systematically left for better job opportunities.

An influx of retirees and younger residents attracted to jobs offered by a growing list of new employers has taken up residency. Vermont is the only other state to see population growth in the past year in the rugged cold northern states, which are losing population due to a national movement of people migrating to warmer climates.

In the state’s largest city of Portland the housing market has slowed. New businesses have moved to the area offering jobs. The market hasn’t been through major ups and downs in real estate cycles like more populated areas, but things are changing as slower home sales begin to influence the local economy.

City	Forecast
Bangor	− 3.8%
Portland	− 4.9%
Bar Harbor	− 6.7%
Lewiston	− 3.6%

Portland will see slower home sales during the year, according to the Housing Predictor forecast and net deflation forecast at 4.9% for the first time in years before it gets use to the idea that prices are actually falling.

In Bangor home prices reached their highest level in history before sales began to lag. The average price of a home neared $175,000. The area is forecast to see weakening sales through 2008 on deflation of 3.8%.

In Lewiston it’s a similar case as Maine homeowners adjust to the southerly trend. Homes on the market are taking longer to sell and the inventory of property is growing. Lewiston is forecast to deflate 3.6% on the average home by year’s end.

Maine has been nick-named Vacationland by "Maine-iacs" who make the state their full time home for all of the visitors who frequent the state during spring and summer months.

As a result of a growing vacation market, Bar Harbor in northern Maine has turned into a major second home market brimming with growth during the real estate boom.

Teeming with tourist activity in the summer Bar Harbor is the type of place one can dine on fresh Maine Lobster while taking in the view of the sparkling Atlantic Ocean. But the real estate feast has slowed resulting in a return to a slower pace for the housing market.

Bar Harbor is forecast to sustain the worst deflation in prices in the state at 6.7% on the average home. It’ll be a while yet before Maine comes to grips with its new real estate markets.