The Fortin Team’s Maine Real Estate Blog

The economic stimulus package really favors the first-time buyers.  When passed, it will offer a tax credit of $8000 to first-time homebuyers that purchase a home between January 1 of this year until December 31 of this year.  The home buyers will have to have an income less than $75,000 for singles, and less than $150,000 for couples.  The last definition we saw of “first-time homebuyer” was anyone that hadn’t owned a home before, or for the previous 36 months.  So “first-time” may not really mean what it represents.  Many people find themselves in situations where they do not own a home for 3 years or so, but have owned before.  We’ll have to see if the stimulus package has the same definition.

 In an attempt to do our part here in central Maine to stimulate the local economy, we have partnered with the Auburn and Lewiston adult education programs to teach south and central Maine’s homebuyers the 8-step process of buying a home.  Our first class was last week in Lewiston, at the high school.  It was a success, as first-time buyers left with more knowledge about the home-buying process, and a copy of Gary Keller’s “Your First Home” to read.  We are also offering a FREE Report on the home buying process for Maine residents that live between Portland and Augusta (Our local market service area.)  The report can be requested at

www.buyingyourfirstmainehome.com.

Overall, we believe that the local real estate market, here in central Maine, will see a nice boost in activity due to the pending stimulus package.  It will be a welcomed event, as sales and prices have been slipping for quite some time now.  Of course activity breeds more activity, and anyone that studies these things knows that the real estate market is one of the biggest economic forces in our society.  This positive energy will shift the forces required in our favor.  The American Dream of buying and owning a home will once again bail out the rest of the economy.  Happy house hunting!   

We had a dinner party last weekend that was worthy of a “post” in the real estate world!  Several couples, friends and fellow real estate professionals, came to our house to enjoy conversation, a meal, and some fun.  The theme for the meal was Mexican.  We started the evening off with traditional cocktails and beers(Margaritas, Coronas, etc..), as well as corn chips, salsas and dips.  Everyone chipped in with the evening’s par-takings.  Some brought the apps, others the desert, and so forth.

 We were responsible for the main course.  I had prepared real refried beans(vs canned), spanish rice, and red(beef) and green(chicken) chile enchiladas.  I thought it was all very good tasting, but was a bit disappointed with the texture of the enchiladas.  It seems I let them sit in too much chile sauce before cooking, so they were a bit soggy.  Okay, maybe more than a bit.  Oh well - full of flavor!  The desert was incredible!  I don’t know exactly what it was, but the name included the word “Sex.”  It was a multi-layered, chocolately-caramel, nutty, creamy, crunchy, parfait-like medley that was awesome!

Enough about the food, this is a real estate blog!  So, once the meal had concluded we commenced playing Cashflow 101.  For those of you unfamiliar, google Robert Kiyosaki.  It is a Monopoly-like game that teaches the value of “assets,” as well as the burdens of “liabilities.”  Everyone picks a “profession” card that determines their monthly cash flow to start.  Everyone starts in the rat race, and does not escape it until their passive income is greater than their expenses.  Way too real!  The goal is to reach one’s goal - which is located on the “fast track,” outside of the rat race.  Only half of the crowd had ever seen or played the game before, so we were a bit slow in having anyone get out of the rat race.  I have played the game several times.  I’ve only seen someone escape the rat race once - after many hours of play.

A couple of hours into the game, we were all beginning to get tired.  It was very tiring trying to escape the rat race!  The highlight came around 11:00 pm.  I had just drawn a “little deal” card that said all homes that were 3 bedroom and 2 baths could be sold for $100,000.  I had purchased 2 such “assets” while in the rat race.  Several others had made similar purchases.  The short story here is that I had purchased both of my homes for under $50,000, so I made a profit of $105,000 in an instant!  I immediately became debt-free, and reduced my expenses to less than a third of my income.  I also had $43,000 left over to now begin making “big deals.”  The other players, that had homes to sell, also profited nicely.  Things were looking real good for us to move out of the rat race, but then it hit us… It was bedtime… We’d have to try escaping the rat race again another day.

Moral of the story, and evening… buy assets.  A 3 bedroom 2 bath home is a good start! 

Real Estate in Central Maine is making some history!  I recently noticed that there were some 2885 homes for sale in the Androscoggin, Kennebec, and Oxford Counties.  There were 239 homes under contract, and only 146 sales over the past 30 days.  The history making is in the deals available!  These numbers create an absorption rate - the rate at which homes are being sold(absorbed) into the market.  At 146 sales, there was about a 20 month supply of homes available!  If no one else listed their home for sale, it would take at least 20 months to sell the homes currently listed.  Anything over 6 months is considered a “buyer’s market,” so what do we call 20 months?  I call it “Sale Days!”

When a 2-year old home that was originally built and sold for $154,000 expires after 180 days at $115,000, we have an issue.  A good deal would have been a resale at $140,000.  A great deal would have been $125,000.  A steal (Sale Day!) would have been $115,000!  The issue is, an expired listing is one that did NOT Sell!  The home didn’t sell at “Steal Day” prices, so wouldn’t it suggest that the buyers are looking for more than even a steal - they want a high-class steal - one that requires nothing.  No paint, no new carpeting, no repairs, etc., and it must be ideally located, have no basement issues, and have “the right layout.” 

I get asked almost every day…”Is now a good, great, or “the best” time to buy a home in central Maine?”  The answer is obvious and clear.  Most of us have never seen, nor will we likely ever see again, a market so perfect for buying!  The combination of supply, pricing, and historically low interest rates make this “the best” time we may ever see to buy a home in Maine.  The deal is even sweeter for first-time home buyers in Maine, because there are state and federal incentives available to them only.

In summary, the media should help the economy a bit.  Why not suggest the truth - America, and certainly Maine, is for sale at “Sale Day” prices.  Everyone now, go out and buy a home!  In fact, buy a few while you still can!     

Went out to dinner last night at one of Portland Maine’s premier restaraunts - Fore Street.  Had never been before, but have heard many rave reviews.  We went as guests of my inlaws, and were to meet there at 5:30 pm.  Our GPS indicated that it was only 10.5 miles from our home in Cumberland Maine, and 15 minutes away, so we left our house at 5:15.  We made our first pass by the restaraunt at 5:37.  It is a small brick building with absolutely no signange visible from the street, so when Mr. GPS said, “you have reached your destination” we were confused.  We made a couple of trips around the block before realizing we should just stop and start walking.  Now the reason we weren’t in a big hurry to make that decision was because the temperature outside was a balmy 14 degrees.

We parked in a furniture store’s parking lot, and were elated to get out of the car to see the brick building across the street was our destination!  Maybe part of the places’ lure is finding it?  Again, small brick building between some high rises, no signs, no indication of a restaraunt, other than the steamy windows and a waft of amazing aromas.

The hostess seated us.  It was exactly 5:45.  Joan, my mother-in law to be, informed us that she had called in the reservations weeks ago, and that there were only 3 time slots available - at that time!  The one she chose, an 8:15, and a 9:00p.m.  We ordered cocktails and began our typical conversations on the weather, economy, and of course, the current real estate and mortgage crisis in Maine.  It was then that I looked around the room and had “a moment.”  When we really stop to think about everything being said about our current state of affairs, it seems obvious that there is an undermining of sorts going on through the media. 

I have talked to several others about this “bad economy” lately.  They too have had difficulty getting reservations at 4 and 5 star restaurants.  Others find it impossible to get into the typical restaurants at normal hours.  I have to ask, do people eat out more often when they are broke or feeling broke?  Aren’t we supposed to stay home and cook rice and beans in the bad times?  If the wine list, average entre price or waiting list for reservations are ANY indication of the economy, we are in a BOOM - not a bust, and we should get on with life, and with buying and selling real estate!  Turns out the economy, like everything else, is a state of mind.            

I believe what got us here is the same thing that will get us out, and that is CONFIDENCE!  The media needed something to put on the headlines, so they chose real estate a few years back.  Remember, “the Bubble” was about to burst?  Is it any surprise that IT DID???  What we focus on and believe, we achieve - nothing new here.  Having said that, why don’t we all start thinking about what we want, not the opposite?  I mean we can dwell on all of the negatives, the real estate market, economy, stocks, jobs, you name it, they are all “in the toilet” - exactly as we thought them to be.  We allowed the media to have their story, and we believed it.  YUCK!!!

Personally, I’ve had enough already!  I’ll start right here.  Let’s create a POSITIVE movement to correct this mess!  All that we have to do is think it so.  If we believe it is improving, guess what?  It will improve!  Let the media catch up, let’s get this show back on the road!  People everywhere deserve lives of passion and fulfillment.  This can only be found when our thoughts are leading the way.  We do not need to allow this to continue ANY longer…by the way, what are YOUR thoughts about all this?  Please blog on to my blog and tell me your thoughts.  Don’t you think this same philosophy is why we have made history in choosing our new president? 

I BELIEVE that the real estate market in Maine is improving!  There, I said it!  CONFIDENCE is building… 

Many people have written about or have discussed the benefits of buying a home(owning) versus renting.  There are many arguments for sure, however, one study that really sticks out to me, is the Survey of Consumer Finances published by the U.S. Federal Reserve Board.  It showed that home owners had an average net worth of $184,400, while renters’ net worth was just $4,000!  The $180,400 difference is more than the average price of a home here in Androscoggin County, Maine! 

Home ownership is an “accidental investment” that seems to be most American’s best chance for wealth accumulation.  I’m not saying that $184,400 is wealth by any means, but it is a start.  Repeating the process of buying a home say 5 or 6 times, now that is wealth.  It should at least be a mortgage-free residence.

Home buyers want to make sure the timing is right.  I say the time is ALWAYS right to buy, but better now than it has been in our lifetimes!  Prices are down, interest rates are at historic lows, and the government is offering tax incentives again.  WOW!  Is there any reason why a renter wouldn’t want to buy right now? 

The Lewiston and Auburn area of Maine is ripe for picking a first home.  We have record inventory levels, a good supply of low-cost money available, and the first-time home buyer tax credit until June.  We are doing our part to help by offering a course through the adult education programs to teach first-time homebuyers the steps involved.  We also have a website offering a FREE Report - “8 Steps to buying your First Home in Maine” available at www.buyingyourfirstmainehome.com

First-time homebuyers are now ideally suited to be “in the real estate market” today.  In the markets that we serve in Maine, Auburn, Lewiston, Cumberland, New Gloucester, Turner, Minot, Poland, Sabattus, Lisbon, North Yarmouth, Gray, Greene, Leeds, and Durham, average home prices are at 2002 levels, and there is over a year’s supply of inventory!  In addition to selection, the homes that are available are in much better shape than they used to have to be.  Sellers are making the necessary repairs, improvements, and upgrades prior to listing.  They are also staging their homes, which typically includes cleaning and painting, so many of the homes that are available are in move-in condition for the buyers that are able to “make a deal.”  This alone can save buyers thousands of dollars! 

Along with low prices, and move-in ready conditions, the economy has given us record low interest rates for mortgages.  Interest rates play a huge role in purchasing a home.  A thirty-year mortgage at 5% costs $5.37 per thousand, versus, say an 8% loan that costs $7.34 per thousand.  On a typical $150,000 mortgage the payment difference between 5% and 8% is a whopping $295.50 a month!

To top all of that off, the government is offering first-time buyers a $7,500 tax credit until June of this year.  These factors add up to a whole lot of savings and incentives, and they won’t last long.  Those who think things will only get better for buying will miss out.  Everyone gets a turn in life, the same rule applies to buying a home.  If you are a first-time buyer, get busy buying!

We are so excited for first-timers that we are teaching a course (For FREE - however, the adult ed programs may have a charge) on it at the adult-ed programs in Lewiston and Auburn, Maine.  One can register at  either www.lewistonadulted.org, or www.auburn.maineadulted.org We are also offering a FREE Report ”8-steps to buying your first home in Maine”.  The report can be found at www.buyingyourfirstmainehome.com, or by going to our website - under Buyer Resources, www.thefortinteam.com     

Welcome to Dan Fortin’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Auburn.