How High Is Up?

 Posted by at 2:12 pm
Jan 042010

One of my “Mooseprint” subscribers sent me an email that included this headline from a recent Maine Association of Realtors press release:

Maine Home Sales Up 48.55% in November 2009

He added that he was quite sure I’d be explaining this in my next newsletter. Given his penchant for satire, I replied that 48% of nothing is still nothing but pledged to do some further analysis and post it on my blog. Rather than write a lengthy editorial, here’s a few “brain leaks” on the topic.

  1. My attempt at satire has a thread of truth in it… it’s important to remember that the economy was taking some of its hits a year ago—in essence we are comparing this bad year to a horrible year.
  2. Yes, there are signs of some general improvement. One of the things that makes statistics such as these challenging is the very nature of real estate. Markets (and properties) are unique and local. Some markets are improving; some are not.
  3. In smaller print the same press release notes the state wide median sales price is down 4.88% for the same period. So as previously noted, the low end market is where the action is–in general.
  4. Our state-wide statistics are dramatically affected by York and Cumberland Counties. For the rolling quarter (September, October, November) these two counties account for 41% of the sales. What happens in these two counties will dramatically affect “state wide” statistics.
  5. In the interest focusing a bit on local markets, the rolling quarter statistics show that Piscataquis County hasn’t fared so well with a 5.13% increase in unit sales and a 5.26% decrease in median price. Somerset County, however, shows a 48.65% increase in unit sales with a slight increase in median price.

Personally, I think it’s too early to predict what the impact of the expanded tax credit will mean… but, as noted above, there are some indications that activity is increasing. At the same time, however, interest rates continue to creep up—not a good sign.

Occasionally when folks ask me about listing property they end observing that I’m not very encouraging. I do think it’s important to have a realistic outlook and remember that your property and your situation is uniquely yours. Statistics and my “editorials” can perhaps make you think, but in the end it’s about a specific buyer and a specific seller. “In the history of mankind,” Tom Peters once observed, “a market has never bought anything. People buy things.”