Michelle Flaherty

There has been a lot of chatter in Maine lately surrounding first-time homebuying, and legitimately so. The federal government has implemented an $8,000 tax credit to all first-timers who purchase before December 1, 2009, and MaineHousing has upped the ante, offering an additional $5,500 "Gift of Green" for first timers who use their mortgage products - a $5,000 grant at closing plus a $500 certificate toward an energy audit. Spend some of that money on energy improvements, and you can rack up another $1500 tax credit come April, bringing the grand total to a whopping $15,000 to buy a home in Maine this year.

Yesterday I was asked by an acquaintance who had never bought a home whether she would qualify as a first time homebuyer, and the answer wasn't quite clear. Her situation: Her husband owned a home, which he had purchased before they got married. She wasn't on the deed or the note for the home. The were thinking about making a move, and she wondered if she could qualify for some of the programs out there. The answer was yes and no.

In Maine, she would qualify for the Gift of Green program (and a MaineHousing mortgage) IF she purchased the new home on her own and didn't need any of her husband's income to qualify.

However, she woudn't qualify for the $8,000 tax credit, even though she had never bought a home before. According to the IRS's explanation below, her marriage to a homeowner would disqualify her for the program, even if she was on neither the note nor the mortgage, and she and her husband filed taxes separately.

From the IRS website:

S4. If husband and wife wanted to sell the home that the wife owned when they got married, and the husband had not owned a home within the past three years, could he qualify as a first-time homebuyer for the credit even though the wife would not qualify?

A. No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since the wife had ownership interest in a principal residence within the prior three years, neither taxpayer may take the first-time homebuyer credit. Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the prior three years from the date of purchase. The husband may not take the credit even if he filed on a separate return.

A lot of states are implementing new first-time homebuyer incentive programs to piggyback on the $8,000 federal tax credit, so it's important to check in with a local lender and accountant to see what your particular situation would be.

When natives think of the landscape immediately surrounding Portland, Maine the images that come to mind are typically of paved streets, Cape-style rooftops, sidewalk trees and corner stores. Although Portland is perched on the coast, it's a working waterfront and most of the area's popular beaches are miles south in Scarborough or Cape Elizabeth--destinations on summer weekends, but hard to get to on a whim.

However, one little gem is right across the bridge from downtown - South Portland's Willard Beach. Hidden beyond a quaint residential neighborhood with just a few walkable shops and an ice cream parlor, the beach offers plenty of parking, restrooms and a snack bar. And best of all, its often-overlooked location keeps the crowds quiet. And September through May, dogs are allowed on the beach!

It's really the locals who benefit most, the residents of the beachy cottages and condos that cover the four or five blocks between Broadway and the beach.

One such condo, located at 450 Preble Street, is currently for sale - just in time for summer. The unit is priced as low as any have sold in the building, and is a prime third-floor walkup with a custom kitchen and bath, and plenty of room to roam. Granite countertops and stainless steel appliances give the kitchen a sophisticated polish, appropriately balanced by warm tones in the cabinetry and some gold hues in the stone. The floors are graced with inlaid hardwood, and the walls feature plenty of functional built-in shelves. The association is one of the few pet-friendly ones in the area, and the building and surrounding landscape show the care of its proud homeowners.

Can you see yourself enjoying the beach-town lifestyle just minutes from Portland's downtown? If so, pack up that sunscreen and call me to schedule a showing! You will thank yourself all summer long.

Last week, it was announced that Maine would be receiving a 19.6 million dollar portion of a $4 billion dollar federal foreclosure bailout/neighborhood stabilization package.

According to a release in Mainebiz ( http://www.mainebiz.biz/news44028.html ), most of the money would be going to Lewiston-Auburn, Sanford, and Portland.

This package allows local governments to directly buy up distressed homes, rehabilitate them, and, as the article alludes, sell them to families that may not otherwise be able to afford homes, through responsible, low-cost loans and homeownership counseling.

However, looking more closeley at the actual plan, it looks like a majority of the homes that are purchased by the state will not be rehabilitated for the purpose of selling, but rather for rental purposes, with an emphasis on housing the severely low-income population.

Specifically, $5,000,000 of the funding for would go toward housing individuals or families whose incomes do not exceed 50% of area median income (that would be less than $25,000 or $30,000, depending on the area in Maine), and would be essentialy to create and administer rental housing. The following was copied and pasted from the plan, viewable at the link below:(http://www.meocd.org/forms/Maine%20NSP%20Substantial%20Amendment%20Final.pdf)

The state will "Issue an RFP for the Regional Homeless Council housing development program. This program will provide grant money for the acquisition and rehabilitation of foreclosed upon properties to develop permanent housing for people that are homeless... In addition to the $5,000,000 set aside for the MaineHousing activities above there is a strong possibility that additional housing units purchased and rehabilitated with NSP funds will be occupied by individuals or families whose incomes do not exceed 50% of area median income."

Should foreclosed properties be bought by the state, rehabbed and used to house the homeless? Will this help or hurt our communities and property values? Would we be better off letting the private sector buy and redevelop these properties?

I am torn here. I belive on a moral/humane level that helping the homeless is a good idea, but I'm not sold on the idea that this is the kind of economic stimulus we need - the kind that will increase home sales, stabilize housing values, and help pull up the housing industry and with it the rest of the economy. I would LOVE some input from other Realtors (good or bad) as to how this money is being used in their states!

This blog post a little overdue, but worth posting for anyone tracking the Portland area housing market.

Last Thursday, Lawrence Yun, the Chief Economist of the National Association of Realtors, visited Portland to give a presentation at our local board meeting. The purpose of inviting him to town was to hear his perspective on the Portland market and where it stands in relation to the rest of the country.

Like the chief economists who came before him, Dr. Yun has been up against a lot of criticism from people who feel that his forecasts are rosier than reality, and that he intentionally makes them that way to create a false sense of confidence with consumers. As I learned last week, that couldn't be further from the truth.

Leading up to his visit, I was chosen to write an article for Press Herald's real estate section announcing his arrival. I was also lucky enough to go to a dinner with him and a few other Portland Realtors the night before his presentation, at which we got talk to him on a more personal level and hear about what he does day to day.

Through my research for the article, I learned that Dr. Yun was extremely well-esteemed within the economic community and ranked the fifth most accurate economic forecaster in the U.S. last year by USA Today. And at dinner, I learned why. He told us that he actually has a staff of 17 economists that work with him, just collecting data on home sales. No other economist has that big of a staff. He also said that other economists constantly look to him for guidance as to where the housing market is going, since he is the only one who has access to the kind of data he's able to collect. And, contrary to what some say, his forecasts aren't always positive. In his words, "the facts are the facts."

That's why I was incredibly relieved when, in the midst of some huge government initiatives in the housing sector and the corresponding trouble in the stock market, he gave a relatively optimistic forecast on the Portland market, projecting price stabilization and maybe even some modest gains in mid-2009. The write-up from the Press Herald is below. http://pressherald.mainetoday.com/story.php?id=211039&ac=PHnws

He also made his PowerPoint presentation available on the Greater Portland Board of Realtors Website. www.portlandboardofrealtors.com

Imagine a Friday afternoon. You get out of work early, and park your car in the garage of your brand new home. The paint smells fresh, the countertops sparkle, and light pours in from the Palladian windows, reflecting on your hardwood floors. You walk out your sliding glass door and play a quick nine holes of golf in your backyard, for free.

Around six o'clock, you grab a companion and go for a short stroll around the corner to a building filled with artists' studios, all open for your perusal and enjoyment. You take in the colors, chat with the artists, and enjoy a complimentary glass of wine. Feeling refreshed, you walk across the street to a trendy restaurant to enjoy its delicious food and atmosphere.

Full and happy, you walk outside, just as the sun is setting over a well-manicured walking trail with views of a clean, fast river. You watch the water fall over the dam, and as the air cools off you stroll home and warm up next to your gas fireplace. Fully relaxed, you rest up for the next morning's walk to one of the area's best spinning classes.

This is the life at Rivermeadow Commons. Tucked into a quiet corner of Westbrook, owners enjoy large, high-end condominiums with open floor plans, great curb appeal, and walkable access to the city's newest and hippest amenities. Each comes with a free one-year golf membership to the abutting Rivermeadow Golf course, and the floorplan is customizable depending on each buyer's needs.

Are you ready to drive less and enjoy life more? If you're anything like me (see previous blog post), that sounds like a VERY attractive proposition. Contact me for a private tour of the model unit at Rivermeadow, and for more information on neighborhood amenities.