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Maine Real Estate Industry Downsizes

January 07, 2009 - PORTLAND -- Mike LePage, a Realtor with Re/Max Heritage in Yarmouth, sold 23 houses in 2007. In 2008, he sold 15.

"It has been a different year, certainly," said LePage, who has been selling real estate for a decade and is first vice president of the Maine Association of Realtors.

The past year has been rough for just about everyone in the real estate industry. The number of people working as mortgage loan officers, real estate agents and appraisers dropped by one-quarter or more.

Home inspectors say the phones stopped ringing weeks ago. And although people are looking at houses and condominiums, relatively few of them are buying, real estate brokers say.

That situation is in stark contrast to two years ago, when the real estate market was still humming, and sales volume and prices were on the rise. All of that has changed because of the mortgage and foreclosure crisis that triggered a recession that's expected to last deep into this year.

From November 2007 to November 2008, the median home sale price in Maine declined 8.3 percent, and sales of existing homes fell 23 percent, according to the latest figures from the Maine Real Estate Information System, an industry group that tracks real estate statistics. The median is the point where half the houses sold for more and half sold for less.

Two years ago, a median-priced house in York County stayed on the market for an average of 74 days. Today, it lingers on the market three weeks longer.

All that means less business for the thousands of people who work in Maine's real estate industry.

Many are deciding to get out of the business. The number of people licensed to sell real estate in Maine declined 13.5 percent in the past year, and the number of people getting entry-level licenses fell 70 percent.

"(Some) people make the decision this isn't for them, and (then) there are the people who will weather this," said Carol Leighton, director of the Maine Real Estate Commission, which oversees licensing of real estate agents and agencies.

Cornelia Stockman of Coldwell Banker Residential Brokerage in Kennebunk said she plans to be among those who weather the storm. She knows it will take hard work, creativity and an ability to try new approaches to get customers to commit.

"The last house I sold was in October," said Stockman, president of the York County Board of Realtors.

Stockman said she was surprised by how quickly the market soured and how widely the effects spread. Today, she regularly bumps into real estate friends who have second jobs to help make ends meet.

Those who remain in the trade full time say they have to work longer and harder to clinch a sale.

Debrah Yale, an agent with Bay Realty in Portland, said buyers are taking their time, shopping around and looking for the market to bottom out.

"Buyers are expecting a lot, and sellers are holding firm," Yale said.

The ranks of mortgage lenders also are dwindling. The number of licensed lending offices is down 60 percent across the state, and the number of licensed loan brokers is down 25 percent in the past year, according to the state Office of Licensing and Registration.

"It is a business now for serious entrepreneurs," said Melinda Boehm, president of the Mortgage Bankers Association of Maine.

Home inspectors, who are not regulated by the state, say their work has nearly evaporated.

"I am probably doing 40 percent of what I used to," said Jim Dye of JD Home and building inspections in Gorham.

William A. Roberts Jr. of Southern Maine Home Inspections in Biddeford said he hadn't done an inspection in three weeks.

Some seasoned real estate agents, ever the optimists, see signs of change and reasons to hope for better times.

Boehm said the recent drop in mortgage rates has boosted applications for refinancing at MetLife Home Loans in South Portland, where she works.

"My pending files have tripled from what I usually have this time of year," she said.

At Bay Realty in Portland, Rita Yarnold said she was busier than ever in December because of a brisk condominium market in Portland.

Last week, she was helping show condominium units to Liz McMahon of Portland, who has been looking for the right bargain for the past 11 months.

Many real estate agents are pinning their hopes on this month's change in presidential administrations.

LePage, of Re/Max Heritage, thinks there's pent-up demand among first-time home buyers.

He said many buyers have been sitting on the sidelines because of the economic uncertainty. LePage predicted that the change of administrations will create a new sense of optimism that finally turns the market around.

"It is not going to be a quick solve, but it will be a solve that starts in 2009," he said.

By BETH QUIMBY, Staff Writer, Portland Press Herald, January 5, 2009


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