Real Estate: Trends in 2020

By Lisa DiBiase

Real Estate Trend #1: Home Prices Are Still Rising Despite a Short Pause in our Spring Market

Through the first nine months of 2020, sales of existing single-family homes were running 2.6% ahead of last year’s record pace. With historically low interest rates, and more buyers than sellers, sales of single-family existing homes increased 22.78 percent comparing September 2020 to September 2019. According to statistics released by Maine Listings, the median sales price (MSP) for homes sold in September 2020 rose 19.56 percent to $273,500, compared to September 2019. With more buyers than sellers in most local markets, we are seeing strong competition, faster sales and increasing pricing. Even with the pause, the state has seen 347 more homes sold through the first nine months of this year over last year.

Real Estate Trend #2: Mortgage Interest Rates Remain Extremely Low

Mortgage interest rates have been trending down—even before the pandemic. Economists think interest rates will continue to stay low until the economy is close to normal again. But interest rates probably won’t hit rock bottom as lenders still have such a high demand from current homeowners to refinance their mortgages into lower terms and rates. 86 percent of recent buyers financed their home purchase. Real estate experts suggest the current low rates are worth capitalizing on. While they may dip lower, there’s a risk to waiting too. Mortgage rates could shoot up overnight if, for example, scientists make speedy work with developing a vaccine that could point to the end of the outbreak. On the other hand, interest rates could further fluctuate if the economy worsens. Given the increase in mortgage applications, prospective buyers should act quickly to get in line to lock in the low rate.

Borrowers should anticipate waiting about eight to 10 days longer than average to close on their loans. This could result in up to 55 days or more to close a loan.

Real Estate Trend #3: Millennial Home Buyers Are the Majority

According to NAR, millennials took the lead as the largest group (38 percent) of home buyers last year. Older Millennials at 25 percent and Younger Millennials at 13 percent of the share of home buyers. 86 percent of Younger Millennials and 52 percent of Older Millennials were first-time home buyers, more than other age groups. Older Millennials had the highest share of married couples (67 percent), while Younger Millennials had the highest share of unmarried couples (21 percent) buying homes. Older Millennials were the most educated age group, with 79 percent holding at least a bachelor’s degree, followed by Younger Millennials. They were most likely to purchase a previously owned home and a townhouse. Convenience to their job and commuting costs were both more important to this group, and they were most likely to find their home online and to use the internet in their home search.

Real Estate Trend #4: Out-of-State Buyers Are Coming to Maine

The allure of Maine’s quality of life and response to COVID-19 from across the country has added to the puzzle of our Maine real estate market. Typically, about 25 percent of home purchases in Maine are made by out-of-state buyers, and we are now seeing that percentage increase to around 33 percent. In September of 2019, Maine had 445 single family homes purchased by out of state buyers. In September 2020, that number was 735.

What if I’m Not Buying or Selling a Home This Year?

Everyone can take a deep breath. From what we can see, the real estate market is not going to crash anytime soon. While low mortgage rates are motivating buyers to enter the market, this increases demand. But there’s still a record-low supply of home listings. This is keeping home buying somewhat competitive and allowing home price growth to stay steady. Regardless of where you are located here in Maine, buyers remain interested. As we continue through 2020 homeowners’ equity is here to stay. <

This article provided by Lisa DiBiase, Owner of Landing Real Estate located in Portland and Windham. Call 207-653-0823.

Real Estate: Winter well preparation an essential component for homeowners

By Kam Berry

As winter approaches in Maine, well owners across the state are recovering from a dry summer, with many dug wells running dry. The dry weather also affected some drilled wells, which are providing irrigation water at a higher demand. As summer winds down and we prepare for winter, it is a great time to think about seasonal well upkeep, as well as regular testing after a busy summer. We are seeing many recent real estate transactions expose water conditions that have gone undetected, so we stress the importance of testing.

Many dug wells across the state had water production issues all summer, and some even went totally dry- even if the homeowners did nothing wrong. The water table was so low due to the lack of rain, lowering water below the pump intakes. We took many calls at the end of the summer for dry dug wells, and unfortunately not much could be done in many cases. Well drilling contractors across the state can provide estimates on well drilling, which is a much more reliable water source.  A drilled well will not be as affected by lack of rain.

Winter preparation for a well system is very important, in many regards. Knowing where your well is located is highly important, since many wells are out of sight once the snow falls. A small reflective stake can help, or even a photo to reference if we have to dig to find it in the winter. It sounds funny, but I have gone around many yards with a metal detector and shovel!!! Well pumps have an estimated lifespan of 15 to 20 years, but that lifespan can be cut way short if a defective pressure tank, defective pump or wiring issue to the pump appears. When a pump fails, pump replacement involves accessing the well, typically with a truck using a special tool to pull the pump out of the well and wind up the pipe and wire. Difficulty locating the well makes the process take longer than required.

Well water testing should be done on an annual basis, according to the National Groundwater Association. The importance of water testing has become more publicized in recent years, and it is great for the health of the community. We have seen many cases of elevated Radon, Uranium, and Arsenic in local areas through testing, but these contaminates have likely been present for years. A frequent question we are asked is regarding any obligation to treat the water if a test fails, and there is no obligation if the test is done for personal information.

When it comes to purchasing a home on a well, it is important to consider all of the aspects. Is the well location known? Is the pump at the age where failure is imminent, or showing high amp draw? In regards to water testing, it is very important to make sure the water passes an independent lab test, since even innocent enough issues like a low PH can corrode piping and cause leaks. If you are listing your home with one of our great local real estate agents, there are things that can be done to avoid surprises in the transaction. A sanitary well cap without any cracks can prevent unnecessary bacteria concerns, as
well as having annual service performed on existing water treatment systems to make sure they are functioning properly.

Throughout the winter months, an accessible well will assist in quick repair, while preventative care and regular testing can avoid surprises while selling your home. Preventative care also provides the opportunity to ask around to find the best pricing and practices, without an emergency situation adding pressure. Many local well contractors also provide well inspection services, which is a great tool if buying a home on a well. <

Kam Berry is the owner and operator of Berry Water Solutions, Inc. Call him for all of your water system needs at 207-383-5153 or visit BerryWaterSolutions.com

Real Estate: Opportunity abounds in Windham

By Larry Eliason

Years of experience in the Commercial Real Estate Brokerage field has provided me with insight to the lack of commercial inventory and opportunities that are available to commercial real estate developers, builders and investors in Windham today.

In the Windham Marketplace today, there is a lack of commercial/light industrial warehouse building inventory and that, ladies and gentlemen, is where I see an opportunity for Commercial Real Estate Developers and Commercial Real Estate Investors to provide new inventory to meet the current demand and, to capture an opportunity for building a commercial investment portfolio and/or developing buildings for immediate sale and profit.

Some Southern Maine towns like Scarborough and Saco have Business Parks specifically designed and developed for the 1,200 square feet to 3,000 square feet commercial users.  These business parks provide easy access to highway systems, may have access to sewer and also provide a professional

looking business park setting for a wide variety of professional, sales and/or service businesses.

In a couple of these developments that I have seen myself, the projects have been designed and developed as commercial condominiums so that small business owners can own and occupy these commercial warehouse units.   The price points can range from $ 125,000 to $ 250,000 depending on size, configuration and amenities.   A typical commercial condominium has a warehouse space, office(s) and ADA bathroom.

Windham has commercial land available in a variety of zones such as C1 Commercial, C2 Commercial, C3 Commercial, Enterprise Development District and the Industrial Zone that could accommodate new Business Parks for Commercial Warehouses.

Unfortunately, Windham does not have commercial warehouse inventory available or very little is available to meet the immediate needs of the commercial side of a fast-growing community.

To fill the void, I feel that we as a town should encourage commercial real estate developers, builders and investors to recognize this void and to plan and develop some new commercial business parks in Windham in partnership to overcome the lack of inventory.

Windham town leaders should look for ways to offer incentives to develop new commercial real estate inventory to help attract and accommodate new commercial construction to fill the void and to also help off-set the amount of new residential development by adding to the commercial real estate tax base.

New impacts fees recently adopted by Windham Town Council were surely done with good intentions for the town’s growing needs for a bigger Town Office, New Police and Fire Station in the future, however, these added impact fees along with the high costs of new construction accomplish the opposite.  

A new Town Office and a New Police and Fire Station should be funded by first developing a needs analysis, project design and develop a realistic budget and then bring it to the taxpayers for their blessing.  Adding impact fees to fund such projects are in my opinion, just another tax and send the wrong message when you are trying to attract new commercial development for growing the commercial tax base.  I wish to encourage the Windham Town Council to revisit this matter and to reconsider the magnitude of these costly impact fees.

In any event, it all comes down to the numbers.  Land costs, building design and site design, local, state
and federal approvals, building costs and yes, impact fees, all roll up into the price tag for a new project.  A Developer needs to recognize an opportunity, evaluate the rewards and risks, and make a judgement call on whether to develop and hold as investment or development and sell such as the commercial warehouse condo concept.

The bottom line here is I really think developers interested in investing in Windham have a niche opportunity to develop new commercial warehouse inventory and at the same time, contribute to the commercial tax base such as the commercial warehouse condominium business park format. 

I also feel that our town leaders need to look at this as an opportunity and as a partnership and not as a cash cow for adding fees to fund town projects. <

This article was brought to you by Larry Eliason. Commercial Broker with Butts Commercial Brokers in Raymond, He can be reached at 207-415-2112. 

Real Estate: Selling a home and buying a home at the same time

By Kristin Piccone

Are you thinking of selling your home, but, afraid to do so because you need to purchase one, too???  I am here to tell you that it can be a daunting task and for this reason, you will absolutely want a competent REALTOR on your side to line up the domino effect for you!  

As a competent REALTOR, I have guided many clients through this very process.  In a perfect world, the home you want to purchase will be actively listed prior to you having to put your home on the market with so much uncertainty, right?  All the what ifs running through your head; What if my home doesn’t sell?  What if I never find a house to buy?  Well. . .what if I told you that sometimes you have to take action (for example, list your house) to get a reaction (for example to find the house you will buy).  Sounds hokey pokey, I know, but its so true!  And guess what, I even have a form that will protect you and allow you to find a home that you will love in order for the sale of your current home to close.  This form is called Seller’s Purchase/Lease of Property Addendum.  Effectively, this form becomes a part of the Purchase and Sale Agreement when you receive an offer on your home.  It is a way for all parties to acknowledge and agree that you (as a seller) have a certain and agreed to amount of time to enter into a purchase agreement for your purchase on a new home.  What if the time is getting close and I have not found a property to purchase?  Well, that’s the other part of this form that
protects you from being without a home.  This form has verbiage that allows you (the seller) to declare the Purchase and Sale agreement null and void should you have not entered into any agreements within the amount of time agreed upon.  Of course, we will work our tails off to be sure this does not happen, as the ultimate goal is to create a Win-Win for all parties; Seller wants to sell and Buyer wants to buy!!

Whether you follow the Real Estate industry or not, I think everyone knows how hot the Real Estate industry is right now.  Inventory is low; prices are high; multiple offers after multiple offers and here again, it is very important to have a competent and knowledgeable REALTOR on your side as presentation is key for getting your offer picked; especially when buying a home and selling a home at the same time!  If you have more questions or would like to call and discuss YOUR real estate needs, please always feel free to reach out.  Be well and I look forward to chatting all things Real Estate with you!

A Quick Study on the Market

The State of Maine's residential real estate market is still experiencing very low inventory

Take a look at some of these hot markets:

Gray -- Sales are down, prices are up about 23 percent

New Gloucester -- Sales are down, prices are up about 7 percent

Windham -- Sales are down, prices are up about 5 percent

Westbrook -- Sales are down and prices are up about 24 percent

Overall, Cumberland County is down approximately 5 percent in residential homes sales in a year over year comparison; prices are up about 21 percent.  Want to know about your area? Reach out to me!  I am always happy to help and listen about your home goals!

Don't understand what any of this means? Reach out to me! <

#kprealtor #local #knowledge #trust #betheexpert #landingrealestate #gng #westbrookmaine #windhammaine #realestatemarketupdate

Kristin Piccone is a REALTOR for Landing Real Estate in Windham. Reach her at 207-951-1393 or by email at kpiccone@landinghomesmaine.com

 

Real Estate: Amazing time to sell your home

By Matt Trudel

This market is one of the hottest real estate markets we have seen in several years.  Prices are up, interest rates are down, and inventory is low.  This is a seller’s market and that means it is a great time to sell.  This will mean you are capitalizing on getting the maximum out of your investment.  Supply and demand are part of what is driving this market higher. 

You might be inclined to go buy a For Sale By Owner sign and put it up thinking that is all it takes, but generally that leads to two issues that will cost you time and more importantly, money.  It is a fact that people who sell their home on their own end up accepting less than what the market value of their house really is.  It also takes a lot more time than people realize when selling a house.  This includes scheduling showings, being available, answering calls, emails and questions.  All of that is before you go under contract and then have inspections and more negotiations. So do yourself a favor and hire a professional to assist you through the process.

Another tip is to make sure your house is actually ready to be put on the market to attract the most buyers.  More buyers mean more competition which leads to higher offers.  So you want to fix items that need repair and replace things that are worn or damaged, like flooring or deck boards.  Touching up the walls and ceilings with fresh paint if needed.  Another way to get buyers is to limit the time blocks of when buyers can see your home.  This is more common now with the COVID-19 issues.  This also causes buyers to see other buyers looking at the property and potentially create a competitive feeling of possibly missing out.

In come the offers and after negotiating things like purchase price, earnest money, inspection periods, and a closing date, you need to figure out where you are going.  One option would be to negotiate that into the offer if you are going to buy.  Include that you have 30 days to put a home under contract and will close both transactions on the same day within 30 days of going under contract on your new home.  With interest below 3 percent, it is not a bad time to buy and you should have decent negotiating power as long as your house is under contract.  Another option might be to rent for six months or a year and see what happens with the real estate market next year.  At some point this market will slow down and take a dip.  It always does and with this being an election year it might just happen next year.   This would allow you time to watch the market and perhaps you will have sold at the peak and can buy after the dip in the market.

 This article was written by Matthew Trudel, owner of Five Star Realty, Windham, 207-939-6971