4 Facts About Maine Real Estate

The Maine Association of Realtors has prepared a “4 Facts about Maine Real Estate” to respond to common consumer questions or concerns about buying real estate.

1. All Markets are local

2. Another word for real estate is home

3. There is available mortgage money

4. It’s still the greatest source of wealth-building

1. All Markets are local. Yes, there is national, regional, state and county statistical data, but each will not clearly or fully explain market conditions in a town or neighborhood. Market conditions can also vary based on types of property or whether waterfront or not, for example. What happens with California or

Las Vegas real estate sales is not going to mirror real estate sales conditions in your area of interest. Please get local market information from a local REALTOR®.

As general information, the chart below shows what has happened with median real estate home sales prices statewide in Maine over the past nine years.

2. Another word for real estate is home. Don’t forget the real estate you buy may be where you live or where you vacation. Many buyers are finding properties in Maine that are larger or more affordable than the last time they checked. Don’t miss the opportunity to move into your dream house while there are so many affordable and desirable options.

3. There is available mortgage money. There’s so much press about predatory lending that the story there is money to lend by local and reputable lenders can get lost. Don’t be discouraged by negative press – instead check with a local reputable lender to get the real facts on what you may be able to afford and what your monthly payments may be. Find out if you can pay less monthly by owning than renting.

The fact that predatory lending practices have been halted is great for consumers, not bad.

4. It’s still the greatest source of wealth-building. Real estate like everything else may fluctuate with economic cycles, but over the long term is consistently the asset that provides the greatest wealth to Americans. If you’re renting, check to see what tax opportunities or long-term wealth may be created if you invest in real estate now. If you’ve always wanted to trade up, any loss you may take on a first home may be more than made up by the value added in the second home. Do the math.

Is Commercial Real Estate Still Profitable in Today’s Market – YES!

Daily Real Estate News  |  November 27, 2007Commercial Real Estate Still Profitable Investment
So far, the softening in the real estate market hasn’t been felt in commercial property. There appears to be only a slight decline in 2007 vs. 2006.

Apartments have benefited from the still-high home prices and tightened mortgage-lending standards, although the increases have slackened slightly from 5 percent to 4 percent. Office properties are up 1 percentage point to 10 percent. Shopping centers are down 0.5 percent. Warehouses are up 4 percent and still in demand.

Over the past 12 months commercial real estate has returned an average 13 percent (property appreciation plus rental income), says commercial brokerage house Marcus & Millichap. That tops the 8.4 percent total return from the S&P 500 and the approximately 3 percent return from single-family homes.

Forbes magazine suggests that anyone interested in becoming a commercial landlord should ask the following questions before deciding how to go about it:

  • Do you want to invest on your own or in a group?
  • How much work do you want to put into your property?
  • Is a 1031 exchange worthwhile, or will fees eat up the delayed tax benefits?
  • Would you make more money buying a publicly traded REIT?

Source: Forbes, Dorothy Pomerantz (12/10/07)

Is Now A Great Time To Invest In Maine Real Estate?

YES!!!  However many would-be buyers are scared off and the media is fueling that fear. Talk of foreclosures, short sales, subprime loans this and Mortgage that, and blah, blah, blah…It’s no wonder consumers are shaking in their boots. Maine has held her own compared to most other states in that we have not seen the prices drop so severly. That’s great news for Maine property owners. Let’s look at Maine Real Estate investment indicators:

  1. Mortgage rates are still at an all time low
  2. Prices are down
  3. Inventory is UP
  4. The economy is still growing; although not a fast as some would like
  5. Sellers are offering incentives, in some cases
  6. Maine is known as VACATIONLAND

Everybody loves to vacation and Maine is a desireable location to put up one’s feet. So if your still thinking of investing, think of Maine as a place to invest in real estate. There is a pay-off…and it’s not just emotional!

Copywite: Michael Meservier – Meservier & Associates

1031 Exchanges For Second And Vacation Homes, Eyed By IRS

This article came into focus through my email and the words that caught my eye were Vacation and Second Homes.  Maine is know as VactionLand and we have our share of out- of- state home owners. 1031 Exchanger’s please read on…

IRS Plans to Take Hard Look at 1031 Exchanges
The Internal Revenue Service is stepping up its oversight of 1031 like-kind exchanges after a report by the U.S. Department of Treasury Inspector General for Tax Administration pointed out that its use has doubled since 1998.

The IRS will be providing guidance on the issue of 1031 exchanges for second and vacation homes that aren’t used exclusively by the owner.

The report said some “may see this as an opportunity to invest in second and vacation homes at reasonable prices.” Given the lack of regulations, statutes and court cases in this area, taxpayers and promoters “may mistakenly take the position that any transaction not specifically prohibited by IRS guidance would be entitled” to like-kind exchange treatment, the report said. “Unscrupulous or uninformed promoters” already are taking advantage of the IRS’s “silence” on this subject. “For example, one promoter advised that taxpayers could sell their vacation homes using like-kind exchanges even though the homes were never rented.”

Bruce Friedland, an IRS spokesman, said the agency “urges taxpayers to keep documentation on hand to substantiate 1031 exchanges.” That documentation “is critical if the IRS has questions,” he said.

Source: The Wall Street Journal, Tom Herman (10/10/2007)

Yes In-DEED… Use your IRA to invest in Real Estate!

First start off with a self-directed IRA. You may be able to take funds from other accounts such as 401(k)s or SEP IRA’s, etc., to initiate your new self-directed plan. Yes, the IRS allows us to invest in traditional or alternative investments that are not publicly traded. News has it that the real estate market may have hit bottom. You can read it here at Realty Times. Buy low and sell high has been the investors motto and what better time to buy real estate, than now. Interest rates have also started to rise, yet another indication of perfect timing to buy. The hard part is determining what is low and what is high and with all the on-line and print news reflecting the current Real Estate conditions, I don’t think anyone willing to venture onto this investment strategy would be misinformed.

The catch to using your self-directed IRA to invest in real estate is that it cannot be your primary residence. It must be for investment purposes only. If you owned a rental property somewhere you’d like to vacation to, let’s say a condo in Maine, you would not be able to use that condo in Maine for even one day of the year.

There are multiple benefits to investing in this type of IRA. You should seek the assistance from one of several custodial companies, such as Guidant Financial, if you’re not comfortable making this venture on your own. Visit http://www.iraaa.org/ for more information on using your IRA to invest in real estate.

While you’re mulling this over, think of investing in Maine! Visit us at meservier.com to search for over 25,000 Maine properties.

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