By Kevin Ronan
Happy New Year. The cold weather is not cooling down the real estate market in the State of Maine. In 2019 real estate buyers, sellers and investors can anticipate higher interest rates as the Federal Reserve continues to control economic growth. Those of us who have bought or sold real estate in recent years have been spoiled with paying modest interest rates. Now is not time to panic.
Before we discuss some strategies for 2019, I wish to share with you some residential property sales news about our backyard, Cumberland County. In November 2018 it was reported that the number of residential properties sold declined by -1.46% due primarily to lower inventory while the median sales price increased by 8.79% from $279,450 in 2017 to $304,000 in 2018.
Let's now discuss some strategies in 2019 to consider whether you are a buyer or a seller. Higher interest rates may deter some people from entering the market now which may benefit active buyers and sellers since less competition in the local market will create opportunities.
Your Realtor® can assist you in accessing some helpful local market information including foreclosures, short sales, for sale by owner (FISBO) and properties listed on the market for extended periods. Access to some of this information may take some legwork, but it may be worth it.
Recently I viewed an interesting interview with a Wall Street investment guru, Jim Cramer, who suggested to buyers to delay purchasing until they have a sufficient deposit in order to eliminate private mortgage insurance (PMI). Check with local lenders what their requirements are. Let's remember higher interest rates improve certificates of deposit and money market accounts. Don't count them out.
If you are rattled by recent interest rate hikes, one easy step is to start checking mortgage interest rates at local banks and credit unions. Rates change constantly, and many lenders have lock-in rates but once you initiate a mortgage application, it will cost you.
To those of you selling a property, do not despair. As interest rates inch higher, in the short term, inventory levels will continue to remain low in Cumberland County. The demand is expected to remain consistent. Prices will remain strong.
Here are important closing thoughts: With change and uncertainty in the financial markets, consumers can expect change and turmoil to affect their decisions. Real estate in Maine will continue to be desirable and owning a home is still a good financial decision.
Kevin Ronan is an Associate Broker affiliated with Alliance Realty, 290 Bridgeton Road in Westbrook, Maine. He can be contacted at , 207-838-4855.