Maine Insider Newsletter

February - March 2024

First, we would like to thank all of you who took the time and heart felt effort to give us the feedback we requested on our first edition last month. We received a lot of great ideas and tried to incorporate some this month! This monthly newsletter is a living, breathing creation and we hope that it will be fun and different each month. Please keep the recommendations and feedback coming!

This month we introduce our “Pet Photo contest” which I am pretty pumped about (Roo and Oscar have been submitted, don’t worry) 😎

In our first “business spotlight” I am very happy to feature my dear friend, Haley McGovern “The Lender Lady”. If you have a business or idea you think would fit well in future months please send it my way. Hope you enjoy!

Much love,

Michael

📸 The Maine Shot

The cute little Rottweiler puppy, Teeka, you see above just got a new ‘home sweet home’ with our agent, Kylie! 🥹

This got us thinking - we want to see your pets! So, in order to get our monthly dose of cuteness, we’re starting a new contest!

We’d love to see your pets and share them with the rest of the Home Sweet Maine family. We’ll share the pictures on our Facebook page (please ‘like’ if you haven’t already!)

Before the next month’s newsletter, we will post the all the adorable pics on our Facebook page for them to be voted on!

Winners will be contacted and will win a small prize. At the end of the year, we’ll do something special with the winning pictures. Maybe a calendar with all of the winners? 🤔

things to do:

february - March

Historically, Maine’s real estate market has been very seasonal. As you can see in the graph, inventory (homes actively for sale) typically climbs as we head into the Spring Market and peaks in August. Days on market (the number of days for a listing to go under contract) typically behaves in the opposite manner - mid-summer has fewest days from listing to sold and February has the longest duration from listing to sold.

COVID-era Real Estate

The last 4 years have been anything but typical! Early in 2020, as we entered the COVID-19 era (marked by the red dot on the graphs), things started to get weird. Days on market dropped below 2 weeks and for the majority of COVID-19 the days on market stayed under a week and inventory went to less than half the typical volume. As we emerged from the COVID-19 era in January 2023 (marked by the green dot), we finally started to see a little of the typical cycle return.

However, COVID-19 came with ripple effects in the form of rising inflation and the following interest rate hikes.

In March 2022, the writing was on the wall, inflation was going to be a problem and the Federal Reserve started raising rates to address the problem. Rates had been lowest at 2.6% in January 2021. In the June 2022 inflation peaked at 9.1% (marked by the yellow dot). The Federal Reserve’s target is 2% for inflation - so not good. 

Historic Rate Hikes

This rise in inflation motivated the federal reserve to do the most aggressive rate hike campaign in history (as pictured below). This unprecedented move decimated prospective buyers’ buying power and created seller "lock in." It became foolish for sellers to sell and buy - even if the new property was a better fit. The interest rate they had was so much better than the one they would get, so why sell?

Rates Hit The Top

In October 2023, rates peaked at just over 8% (marked by blue dot) and finally both inflation and interest rates seemed to stabilize.  Currently, mortgage interest rates sit near 7% (historical average is 7%) and inflation sits at 3.2% (target is 2%).

These numbers are closer to historical averages and targets and are MORE STEADY than they have been in quite some time.

For this reason, I think we Mainers may be about to head into the first "normal" real estate market cycle in years. In a post-COVID-19 world and post-interest rate madness world, we are poised for a bit of stability.

What does this all mean?

Well, if we look into past years to inform our path forward it means: peak days on market this month (February) along with lowest inventory then spring market ramp up to peak inventory toward the end of summer and days on market will decrease toward mid summer.

This inventory boom and days on market drop may be intensified if the Federal Reserve delivers on their mid-late 2024 interest rate drops which would translate into lower mortgage rates. A move toward 5% would improve buying power and may release some of the “locked up” sellers that were reluctant to make a move.

For Southern Maine, summer brings ‘people from away’, coming here and dreaming of making this their new home . This summer will be particularly important as it's the first post-covid and post-interest rate madness summer, where buyers will feel a bit more ease and the market a little more familiar.

However, Maine real estate does not live in a vacuum. One variable to be aware of is the election looming in November. It remains to be seen how that will impact the Maine and national real estate markets. A few other important factors effecting the real estate outlook are: 1) increased consumer credit card debt and late payments, would effect buyer power in 2024 and 2) a precarious job market, particularly related to changes in the AI space.

Michael’s Advice

My advice for Mainers is look at your needs. If you have a need to buy or sell right now, I wouldn't wait. Though we may nearing a more typical real estate cycle for Maine - there's plenty that remains unpredictable.

On the other hand, if your motivation is speculation and gain, I would be cautious with 2024 (and perhaps 2025) as the overall appreciation may be disappointing to those addicted to the insane returns of that last several years.

Final Takeaways

Do your research, consult a local professional and at the end of the day have as balanced an approach as possible to your particular situation. 

Lender Puts Roots Down in Windham

This month we are introducing the feature "The Best Kept Secrets of Maine.“ We will be visiting and sharing places that are relatively unknown to Mainers and visitors alike. 

The first stop is in Lisbon, at what used to be called "Buildings Materials Exchange" (BME) at 102 Lisbon Street. I first heard about BME from a contractor who did work on my old house. 

At the time, BME's mission was to provide low-income Mainers with affordable building materials to maintain their homes and stay warm. BME received donations from construction supply stores, as well as salvaged material from local tear-downs of mills and large estates. They stored all of this in their large, minimally heated warehouse/store along route 196 on the Lewiston/Lisbon line. 

The sliding-scale cost of materials was determined by income. However, shopping wasn’t limited to low-income customers. Anyone could shop and pay "regular" prices (which were also insanely affordable). 

In past trips to BME, I enjoyed searching through barn wood, antique knobs, cast iron piping, and other treasures that I used in my sign painting and furniture refinishing hobby. It was a chaotic mess in there (kind of like Marden's for old building materials), but it was very fun to pick through and find hidden antique and architectural gems.

This past year, BME changed hands. I dropped in this week and spoke with the new director, Gregory Keeney, to find out what had changed.

The original BME organization had become too unwieldy and disorganized for the previous owners, and they decided sell and move on. In mid 2023, Mr. Keeney explained, a group of local churches, supported by a larger consortium of churches from PA, purchased the property and the organization. Following the sale, many volunteers from local churches have spent hundreds of hours repairing the warehouse and organizing the sprawling collection of doors and construction materials inside. 

On November 29th, 2023 the doors re-opened under the new name "Last Sheaf Building Materials Exchange",  reflecting the faith-based nature of their mission.  The group is continuing the original mission of BME of supporting low-income Mainers. However, they have expanded that mission by offering home maintenance education and training opportunities to those who need it, while providing a message of faith and hope. 

Their guiding principle is summed up in the acronym "REAP" - Recycle, Empower/Educate, Assist, and Proclaim. Last Sheaf BME aims to recycle materials whenever possible, empower and educate home owners to maintain their homes and do their own repairs when possible, assist with repairs when able, and share the love and truth of Jesus.

The largest change (aside from improved organization and education opportunities) is that Last Sheaf BME is moving away from dealing with salvaged materials. The previous organization provided tear-down services from which they would salvage material and stock the warehouse, alongside donations of new material. 

In contrast, Last Sheaf BME is taking that energy and shifting it into home repair education and training, and will no longer be offering tear-down services. As a result, most of their inventory will be new, scratch & dent, or relatively new materials with a smattering of salvaged goods, all still at exceptionally reduced prices. 

The organization may accept donations of tear-down materials and items, but will require an appointment and case-by-case approval before anything can be dropped off. They ask that you call director Gregory Keeney to set up an appointment to discuss donation options (see contact info below). 

Now that the space is more organized, and they have a significantly larger volunteer base, Last Sheaf  BME will be able to help a growing number of Mainers maintain and heat their homes. Through this education and outreach, they hope that others will take the knowledge and good will they received and pass it along to others who may be in similarly difficult positions. 

If you are anywhere near Last Sheaf BME, it is definitely worth checking out before going to big-box stores. If they have what you are looking for (or you can find a suitable substitute), the savings will be significant, and you will be supporting a group that is actively giving back to our local community.

To visit Last Sheaf BME or inquire about donations, please see their contact information below.

Maine Trivia

No bones about it - this was surprising! 😂

Did you know mammoth bones were discovered in 1959 in Scarborough and were incorrectly identified as circus elephant bones? And a mammoth tooth was found in the last three years off the coast?

Read more here and here!

Homes for Sale & local trends

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