Maine Real Estate - The Beat Goes ON!
We have plenty of reasons to expect the real estate market in Maine to have taken a breather from its recent string of success. There had been constant chatter for more than a year predicting a real estate slow down in advance of the Presidential election. Despite some uncertainty, there seemed to be little, if any, impact before, during and after the election of 2012. There are continued concerns about the effects of the changes in the tax code including a new 3.8% capital gains tax emanating from the Health Care Reform Act (see article and video "The Truth About the 3.8% Tax" below) and expectations of a reduction in the tax deductibility of mortgage interest. Uncertainty is never a helpful backdrop to any financial market and historically the real estate activity would have been adversely impacted. With so many in New York, New Jersey and Connecticut (all among the top markets for Maine) having been without electricity, heat and Internet access, you would have thought one could hear the brakes screeching us to a halt. We should recognize that Maine, like many real estate markets in the US, also tends to feel a post-Halloween seasonal pause, even under the most certain political and economic conditions.
Well, I am pleased to report that "The Beat Goes ON!" It is hard to measure market activity over a short period of time given the inherent time lag (60 +/- days) between properties going "under contract" and properties actually closing. It is also not a perfect measure to use the client activity on our website (www.LegacySIR.com) as a gauge for general interest in the Maine real estate market, but it is not unreasonable to equate web activity with sales activity. Our web statistics compared to the same time period last year (October 15 - November 9) showed a very robust 33% gain in visitors. All of our other metrics demonstrated very strong gains as well with page views up 25% and unique visitors gaining 28%. Our time on site and bounce rate were also moving in the right direction. I must admit I was not expecting to see such a robust improvement given complexities of the moment.
Maine Listings (Maine Real Estate Information System) reported single family home sales for the month of September rose 8.5% compared to last year. Median home sale prices were also 7% stronger in what appears to be a sustainable trend. Although the official data for October will not be released for a week, our analysis indicates another impressive year-over-year gain for both Unit Volume Sold and Median Home Sale Price. We have been enjoying a steady improvement in units sold for well over a year as supply and demand rebalanced. We are confident that the recent trend in median sale price will also continue to press higher. It may not be in a straight line, but the trend seems to have enough momentum to withstand some unforeseen head winds.
With respect to high value homes ($1,000,000 +) in Maine, 2012 should be a better year in terms of unit volume sold, but will likely prove to be lagging a bit in terms of pricing metrics such as "closing price to original list price" and "closing price to most recent list price." In fact, we predict, based on the pending and sold data available, that 2012 will be the best year for high value home sales since 2007. If you recall my comments from a previous newsletter, the Maine real estate market moves from lower prices to higher prices, from south to north and from east to west. All of these trends are at work and speak to a continued recovery in the luxury property market in 2013.
If you share our passion for Maine Real Estate, I would encourage you to follow us on Facebook (www.facebook.com/legacysir) or Twitter (www.twitter.com/legacysir). We also have a growing visual presence on Pinterest at (www.pinterest.com/legacysir) through which we share our beautiful home and Maine lifestyle photography.
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