Local real estate: A mixed bag for near future

Houlton Pioneer Times Photo/Elna Seabrooks
REASON TO SMILE — Becky Day, First Choice Real Estate owner, looks at photos of properties her company sold in 2010.
By Elna Seabrooks
Staff Writer
    HOULTON —  To some degree, the state of the local real estate market may depend on who you are, where you are and what you want to do.
    It’s no secret that homebuyers have the catbird seat. “We have some good sales out there, some good buyers, and some good deals. It’s a great time to buy and there are some great interest rates,” said Becky Day, owner of First Choice Real Estate. She added that since so many properties have come onto the sluggish housing market, further depressing home sales and prices, one of her clients has picked up three properties as rental units.
    According to Day, in the greater Houlton area during 2009, 86 properties were sold; that number actually went up in 2010 to 90 closings despite a weak national economy and tighter lending restrictions. She said at presstime, 18 more sales were under contract and pending.
    Kevin Tingley, Houlton’s code enforcement officer stated that he doesn’t see this area affected as much as the rest of the state. “New housing is down a little compared to last year. Nothing catastrophic. We seem to be steadier up here. We don’t see the big peaks or the big lows.” Tingley added that permits for renovations have been fairly stable and, thanks to the Houlton Band of Maliseets, “there have been some pretty good size projects with their six-unit and eight-unit housing jobs in addition to their health care facility construction job.”
    Sam Henderson, owner of Northern Maine Realty said he projects 2011 to be similar to 2010 with Houlton sales more localized. “We’re not getting the influx of out-of-state traffic that we were getting. Until this economy turns to the point where unemployment starts going down, I think it’s probably going to stay at this climate condition. Overall, I felt pretty positive about 2010. There are a lot of properties on the market, but we moved a lot.”
    Henderson explained that due to unemployment and fear of unemployment sales of second homes are down. “We had a lot of lake buyers, camp buyers and people buying land. And, people lost money in the stock market. They don’t have the cash flow. I’ve heard that a lot. And, obviously, banks are being tougher which is probably a good thing.”
Troubling signs
    When looking at the underbelly of the lingering recession, a darker picture emerges revealing the reason behind some of those “For Sale” signs trying to catch the eye of prospective buyers. It’s the side of the real estate picture more closely tied to the malaise in the national economy.
    Day said she is seeing short sales “frequently” and something she didn’t see two to four years ago. “The foreclosures are in rough condition because the owner didn’t have money for upkeep. They’re fixer-uppers.” 
    Broker Donna Maher who owns Maher Real Estate and covers all of Aroostook County said she is doing “a lot of broker price opinions. Some are on refinancing. But, I would say now about 80 percent are on foreclosed houses in all of Aroostook County. I go south and I go north.” The homes have gone into or are going into foreclosure. Or, they are owned by a bank or a finance company that wants to know what the property would sell for if it becomes available. “So, I don’t think the economy looks good in the area.”
    Maher said she was busy this past summer. “I would not be surprised if there are 40-50 houses under foreclosure in southern Aroostook. They are everywhere.”
Houses as ATMs
    According to Maher one reason houses are underwater is owners have taken out too much equity. “In my opinion, the reason we are having all these problems, is because people have refinanced and have not put the money back into their homes,” she stated. “They are using their homes to take trips and buy toys. People have overextended themselves and gotten into trouble with second mortgages and home equity loans.” She also pointed a finger at out-of-state lenders that charge high interest rates pushing some owners up against a wall with little or no way out of debt or foreclosure.
    Even with deep price cuts, according to Maher, there are not a lot of prospects out there. “Years ago things were a lot cheaper than they are now. After 9-11, things really went crazy here and prices went up. Border Patrol agents came in and they were paying high prices for homes. They could afford it. Prices went up and I saw it happen.”
    Without those well-paid government officials or other buyers in stable financial positions, local brokers generally agree there is and will be a lot of lower-priced competition.
    Interestingly, though, some homebuyers are adding onto existing homes or they are actually buying to trade up to bigger, better homes in the area. Day said even some empty-nesters want more space to accommodate visiting children, extended family members and grandchildren.
Hopeful outlook
    Henderson is steadfast in his positive outlook for the future. “Right now everything is price driven. Be competitive with your price so that when you are up against similar type listings, yours is the best price.  That’s the key right now. We are going to have sales. We just have to hang in there and keep our noses to the grindstone and the nation will recover as a whole.”