Low Downpayment Buyers Note!

 Posted by at 9:59 am
Aug 302011

Occasionally taking what appears to be a minority position has its rewards! Several months ago I posted a plea for some objectivity regarding the proposed Qualified Residential Mortgage Requirements. While much of the industry is predicting doom and gloom over the proposed requirements, there’s much to be said in favor of them.

Well, in an article published by RIS Media, I’m joined by a writer who at least somewhat shares my perspective. He offers an interesting twist, however, by pointing out an impact of the doom and gloom predictions. “It seems the speculation and debate surrounding QRM is causing some low-downpayment home buyers to believe they will not be able to obtain financing.”

Interesting–and it makes sense. Those who are crying that these new requirements will “kill” the real estate market, are actually contributing to the depression?

What’s actually needed right now is concrete, objective information. Yes, underwriting standards are higher, but at the same time rates are at historic lows. Those lows mean lower payments and lower payments mean more people can qualify based on debt ratios. Prices are lower. There’s a lot going on that makes it feasible for many more people to buy and “low down payment” mortgages are not going to cease to exist.

The best advice for potential real estate buyers is “turn off the television and put down the newspaper and contact a real estate and/or mortgaging professional and get some credible information regarding your specific situation.”

Aug 242011

Ultimately, it's about decisions!

In an article titled “The Emergence of a New Real Estate Industry” Greg Rand offers some interesting statistics from a number of sources.  One that I found particularly interesting was the observation that according to the U.S. Census 34% of households are renters–and that number is growing at a significant rate. He also quotes a survey conducted by Move, Inc. suggesting that investors (as differentiated from home owners) are three times more likely to buy a house in the next three years.

He uses this statistics to support his conclusion that a new industry is emerging. While it’s not clear to me what he thinks that industry is, he seems to be suggesting it’s about a lot more than home ownership.

I’m not sure if I take issue with him, but I would opine that one of the problems with this business has been the narrow view the industry has taken. We’ve tended to think that “real estate” is all about owning a home and that’s something everybody should strive to do. (We’ve acknowledged that there are investors, but have tended to put them into the commercial segment.) In short, we’ve never even pretended to offer “full service” because we still think the real estate business is about selling properties.

This is a short term outlook in an industry that thrives on the long term. If all we do is decide we should be serving investors as well as homebuyers (I would think we’d benefit from clearly identifying the difference between them), we’re still going to miss the boat.

Our ads need to stop reading, “If you want to buy or sell, call me!” What they need to say instead is “If you want to make an intelligent decision about real estate, call me.”


Sales Statistics Released

 Posted by at 7:06 am
Aug 212011

The Maine Real Estate Information System (MREIS) recently released sales figures for July showing that statewide unit sales were up 23% this year over last year–a fairly impressive number. Personally, I think this is a “blip” that may continue into August and possible September, but I do not think it will stay at that level much longer.

Regular subscribers/readers know that I enjoy looking at the statistics by county and the three month “rolling average.” Pistcataquis County is a relative bright spot!  Well, maybe.  Let’s play with those numbers a bit. A comparison of this year (May through July) over last yields a 23% increase in unit sales. Before you get too excited, remember that this county’s numbers are always relatively small: sales for 2011 were 43, for 2010 35.  Eight more homes sold this year over last year.

You may also know that I’m not a big fan of the “median price” statistic–unless you’re dealing with really big numbers (unit sales) the median price is a relatively meaningless number.  (The median price is the “halfway” price; NOT the average price.) However, it’s the number we are given, so lets work with it. During those two periods, the median price decreased by 17.86%, from $85,100 to $69,900.

In case you don’t have your calculator handy:

  • 35 sales x $85,100 = $2,978,500 in 2010.
  • 43 sales x $69,900 = $2,446,500 in 2011.

Again, I know the median price isn’t a good measure, but applying it shows us that things aren’t so much better this year. Now please don’t call me a prophet of doom. I’m merely suggesting some critical thinking needs to be applied whenever statistics are released. I’m also fond of pointing out that you do not have to be the victim of statistics; your decisions actually help create them.



 Permalink  Posted by at 7:00 am
Aug 062011

The PinchME Promotion is underway… the fundamental idea behind it to make it easy for folks who are interested in a second home. You can try out the search routine here.  Contrary to the slogan, not every one can afford a second home. But if you can afford one,  it is a great time to buy. You might want to check with your bank or mortgage lender before you get too deep into shopping… if you are seriously interested, let me know–I’ll be glad to “hook you up” with a lender and we’ll see if we can make your dream come true.

Aug 022011

Here’s an apology to those who’ve tried to reach me by cell phone today… or have tried to have a conversation that lasted more than a few minutes. According to my carrier, the last cell phone call I made was “dropped” eight times! A couple of factors:

  • I’m typically in a “fringe” signal area even on a good day.  (The current problem is less severe in other areas).
  • Beginning last night, we’ve had some rather violent weather that included lightening strikes, power outages, and downed trees. (The good news is the river looks better and the grass is really green.)

I’m told that some eight cell phone towers in my service area suffered some damage starting last night… and the engineers expect to have everything “back to normal” within 24 hours. Your continued patience is appreciated.


Adult Ed Class Schedule Announced!

 Posted by at 10:30 am
Aug 012011

I’ll be teaching two courses this fall for the Piscataquis Valley Adult Education Cooperative:

No News is NOT Good News

Media Relations for Nonprofessionals

You may be making news, but is it news if nobody knows about it? This class will explore the basics of “getting the word out” through approaches that work for small businesses and non-profit organizations. Participants will learn the hows and whys of getting a story in print or on television, and take home samples of formats as well as a number of tips for maximizing their business or organization’s exposure in the press.

Class will be held on Tuesday, September 20th from 6:30 to8:30 pm at SeDoMoCha in Dover Foxcroft. As a service to businesses and non-profits in the area, class fee is only $10!

Stand Up, Speak Up, Shut Up!

Public Speaking Doesn’t Have To Be Difficult

Do you get sweaty palms and shaky knees when called upon to speak in front of a group? This brief course doesn’t promise to turn you into a great orator, but it will help you get the butterflies in your stomach to fly in formation when you stand in front of a group by having what is called and “enlarged conversation.” Come prepared to participate and have a lot of fun! Bring your butterflies!

Class will be held on Thursday, September 22nd and continues on Thursday, September 29th from 6:30-8:30 pm at SeDoMoCha in Dover Foxcroft. Fee for class is $20.

 You can register for either or both of these classes by calling PVAEC at 207 564-6525 or visiting the Maine Adult Ed Website.