Maine Home Prices Continue to Defy National Slump

The following are excerpts from an article published in the Portland Press Herald on January 17, 2008, written by Tux Turkel:

"Nationally, home sales are falling and so are prices.

"It's a one-two punch that has staggered the U.S. housing market. Hardly a day passes without a gloomy headline about real estate on the ropes.

"But that's not been happening in Maine, where the sale price of most homes has been rising.

"The trend highlights a disconnect in Maine: over the past year, the number of homes sold has declined by double digits nearly every month. Despite that, median prices continue to edge up, or remain flat.

"Several factors have been supporting prices in Maine, including the fact that that this market isn't prone to the speculative building and boom-and-bust economic growth of some other states.

"Other major markets, plagued by price speculation, overbuilding and high job losses, helped drag down average home values nationwide. They are also areas most likely to generate national headlines.

"Even regionally, Maine is doing better than those New England locations - such as Boston - that are most likely to make the national news.

"Another reason Maine is holding up is because the statewide economy is in better shape than that of some other states. Maine's unemployment rate is 4.8%, on par with the national average and much healthier than in hard-hit locales. That translates into fewer homeowners who are desparate to sell because of job losses or credit problems.

Other factors:

"Prices didn't soar as high here during the boom, so they don't have as far to drop.

"Maine saw comparatively little overbuilding and speculative buying, so there isn't a glut of unsold homes going at bargain prices.

"The area hasn't been as hard hit by foreclosures.

Charles Colgan, a former state economist who chairs Maine's economic forecasting committee, said he expects Maine to follow the nation into a recession. But Colgan, who regularly studies federal data and other home price indexes, said the national decline appears to be bottoming out. Unless the country enters a deep recession, Maine home values may not have much further to slide.

"We may have escaped the worst of it", he said...""