{"id":12683,"date":"2017-03-23T18:49:35","date_gmt":"2017-03-23T22:49:35","guid":{"rendered":"http:\/\/www.portlandmonthly.com\/portmag\/?p=12683"},"modified":"2017-03-31T10:18:20","modified_gmt":"2017-03-31T14:18:20","slug":"us-versus-the-property-market","status":"publish","type":"post","link":"https:\/\/www.portlandmonthly.com\/portmag\/us-versus-the-property-market\/","title":{"rendered":"Us Versus The Property Market"},"content":{"rendered":"

April 2017 | view this story as a .pdf<\/a><\/p>\n

Buying a home can be a defining step towards independence. But with Portland\u2019s popularity pushing house prices sky high, how do first-time buyers<\/b> turn dreams into bricks and mortar? <\/span><\/h3>\n

By Olivia Gunn<\/b><\/span><\/p>\n

\"APR17-House-story\"Everyone makes big moves in the spring. U-Haul trucks block side streets on Munjoy Hill. \u201cFREE\u201d signs are taped to forlorn futon frames left curbside. Facebook posts promise \u2018a clean, responsible roommate who works mostly nights.\u2019 In the four years we\u2019ve lived in Portland, my fianc\u00e9 and I have moved twice. Our frantic search usually ends in less space for more rent. Each time, our parents ask, \u201cHave you talked about buying?\u201d Well, if you mean pointing out dream houses while headed to Higgins Beach or coveting cabins on Instagram, then, yeah, we\u2019ve thought about buying.<\/span><\/p>\n

\u201cI have two daughters, both in their late twenties,\u201d says Bruce Ocko<\/b>, 56, Senior Vice President of Mortgage Lending <\/b>at Bangor Savings Bank<\/b>. \u201cWhen I was their age, the biggest goal was to own my own house. That was the first step into adulthood. That\u2019s not necessarily the driving factor for younger generations. They\u2019re more concerned with cultural and societal issues and being in an area that\u2019s culturally thriving. It\u2019s less important for them to have the white picket fence.\u201d <\/span><\/p>\n

On top of this, many of Generation Y, myself included\u2013I\u2019m 27\u2013are still trying to figure out the next steps of our five-year plans. Budgeting for next month\u2019s rent is enough of a challenge. But as Maine already has the oldest residents of any state in the country, Ocko believes it\u2019s important that the \u2018youth\u2019 know there are options for buying a home should we consider settling down here. Because, for all the cultural camouflage, there really still is an inside track.<\/span><\/p>\n

Dollars & Sense<\/b><\/span><\/p>\n

Since the formation of MaineHousing<\/b> in 1969, the program has offered a First Home Loan<\/b> for \u201cindividuals and families who cannot afford decent, safe, sanitary housing without financial assistance.\u201d For first-time homebuyers in Portland and surrounding areas, there\u2019s an income limit of $76,800 for a household of one to two members and a limit of $88,320 for three or more. Combined with a Federal Housing Authority Loan<\/b> and private mortgage insurance through United Guaranty<\/b>, a homebuyer could potentially get a first mortgage with no down payment after meeting the criteria.<\/span><\/p>\n

Daring to take on a mortgage is the first step, according to Debbie King-Johnson<\/b>, Consumer Education and Outreach Officer <\/b>at MaineHousing<\/b>. \u201cSome lenders will qualify you,\u201d but beyond that, in the comfort of your own financial privacy, \u201cyou need to do your own housing budget.\u201d That is, even if someone else qualifies you, you need to square it with yourself. <\/span><\/p>\n

The First Home Loan<\/b> combined with a Federal Housing Authority Loan<\/b> or a Rural Development Loan<\/b> is a great trifecta for first-home buyers to consider in Maine. To qualify for a $3,500 bonus towards a down payment, prospective first-time buyers will have to take a homebuyer education course online through MaineHousing\u2019s website or at hoMEworks<\/b>, a Maine non-profit established in 1998 that offers homebuyer\/owner education. <\/span><\/p>\n

Taking the Plunge <\/b><\/span><\/p>\n

Paige Button<\/b> and fianc\u00e9 Jeff Hochmuth<\/b>, both 26, confess that missing out on a crash course in home buying \u201cis one of our biggest regrets. Being able to understand the market and the process really changes the way you approach the entire thing and the level of stress involved,\u201d The couple just closed on a first home in Waterboro after renting in Maine for several years. <\/span><\/p>\n

This first purchase was prompted when their most recent lease came to an end and the landlord decided to sell the property. What to do? \u201cWe were used to paying around $1,300 a month for a two bedroom rental in Lyman,\u201d says Button, a vet technician. But try and find that at the exact moment you, your fianc\u00e9, and two Siberian huskies need it. \u201cFinding places to rent that were geographically suitable was a challenge, so we did a little research and concluded that the market is only supposed to become harder for buyers in the future. It seemed like the ideal time to jump in with both feet.\u201d<\/span><\/p>\n

Home Buying 101<\/b><\/span><\/p>\n

If you\u2019re getting the urge to take the plunge and start hunting for homes online, be prepared. You\u2019re likely not going to see many single-family homes under $300K in the Portland area. \u201cThe market has a lot to do with affordability,\u201d King-Johnson says. \u201cThe Portland market has property prices increasing at a rapid rate. There are multiple buyers, bidding wars, and people making offers on homes greater than the asking price. You have every reason to be nervous because it feels like what we saw happening before the housing crisis.\u201d <\/span><\/p>\n

In realistic terms, you may want to look beyond Portland\u2019s pricey neighborhoods. Gena <\/b>and Matt Lamontagne<\/b>, of the The Matt and Gena Team of The Maine Real Estate Network<\/b>, say buyers are sometimes astonished to learn that areas as close to Portland as Westbrook, Gorham, and Windham are all eligible for the USDA\u2019s Rural Development Single Family Housing Loan Program<\/b>. \u201cThey\u2019re also the most popular areas I\u2019m seeing for first-time home buyers,\u201d Gena says. The couple offers regular Home Buying 101<\/b> events in order to warm the waters for prospective first-time buyers who \u201cjust don\u2019t know where to start.\u201d <\/span><\/p>\n

If you\u2019re set on buying in Portland, don\u2019t count yourself out. Why not consider investing in a multi-unit property? Yes, that means you\u2019d be a landlord, but it also means you\u2019d have a paying lodger. A two-unit property at 204 Auburn Street in Portland is listed on Zillow for $329,900. Seeing as this price falls below the Maine Housing Authority\u2019s two-unit listing price maximum, I got in touch with Debra Abbondanza<\/b> at Bangor Savings Bank<\/b> for advice. Assuming a combined income of $76,109 (below the MHA\u2019s First Home Buyer Loan limit of $76,300 for a two-person household), Abbonanza explains how a first-time home buyer can go about purchasing this property. See the graphic below.<\/span><\/p>\n

\"APR17<\/p>\n

She made it look easy, didn\u2019t she? So why aren\u2019t more of us investing in multi-unit properties? The answer might be as simple as a lack of financial education. Katie Brunelle<\/b>, co-founder of the Adulting School<\/b> in Portland, tells us, \u201cOne of the most requested courses is simply money management. Millennials don\u2019t even know where to begin. We start off with budgeting and move onto advice on how to pay off debt (credit cards and student loans) while still saving money.\u201d<\/span><\/p>\n

John Hatcher<\/b> of The Hatcher Group of Keller Williams Realty<\/b> laments the lack of financial guidance available to young people. \u201cIn this country, we don\u2019t teach people these skills. It\u2019s not engrained into us. When did you learn to balance a checkbook?\u201d No comment. \u201cYoung people simply aren\u2019t taught how to grow personal wealth.\u201d <\/span><\/p>\n

According to the Washington Post<\/i>,
\nhomeownership rates among those of us under 35 are at an all time low\u2013a mere 34.1%, half the national average. While baby boomers are anxious to offer their theories on so-called \u2018lazy, entitled millennials,\u2019 the figure has more to do with the aftermath of boomer home buying habits through the early 2000s and eye-watering student debts than a lack of ambition or \u201cbuying too much avocado toast\u201d as Australian columnist Bernard Salt recently claimed.<\/span><\/p>\n

Feeling overwhelmed myself, though at least vaguely intrigued, I ask Gena to walk me through a typical 101 class over coffee. \u201cPeople think you can\u2019t talk to anyone before you\u2019re ready, but the ideal time to start planning is a year or two before you\u2019re ready to buy. The first step is pre-approval, a 20-minute process that tells you what you can afford. Once you have that number, you can break it down into a monthly budget. Many young buyers may be concerned that student debts affect their loan approvals, but you\u2019ll find many lenders are willing to work with you to get around this issue.<\/span><\/p>\n

After all this, you\u2019ll likely be left asking, \u201cWhen is a good time to buy?\u201d According to Gena, the time is now. \u201cInterest rates are low, and prices are staying steady. No one can predict if there will be another housing crisis.\u201d On the other hand,\u201clenders are being more strict, which is good for buyers\u2019 protection.\u201d<\/p>\n

While I\u2019m still trying to convince my fianc\u00e9 to get pre-approved, Button and Hochmuth are in the final stages of buying their first home\u2013and they couldn\u2019t be more excited. After getting outbid on a place earlier this year, the two weren\u2019t about to let it happen again when they found a gambrel-style house that was just right. To ensure they\u2019d come out first in the bidding war, \u201cWe had to think outside of the box,\u201d says Button. \u201cWe wrote a very sincere letter to the sellers with photos (including the huskies) and links to videos to show them how we\u2019d appreciate the home they\u2019d spent 15 years in. That letter made all the difference.\u201d <\/span><\/p>\n

The couple moved in at the end of March. \u201cNo one thought we stood a chance at ending up with this house! Even if they\u2019d declined our offer, we could walk away knowing we dared to try everything.\u201d <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

April 2017
\nBuying a home can be a defining step towards independence. But with Portland\u2019s popularity pushing house prices sky high, how do first-time buyers turn dreams into bricks and mortar?<\/p>\n","protected":false},"author":1,"featured_media":12686,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[8],"tags":[122],"class_list":["post-12683","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","tag-april-2017"],"_links":{"self":[{"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/posts\/12683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/comments?post=12683"}],"version-history":[{"count":9,"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/posts\/12683\/revisions"}],"predecessor-version":[{"id":12771,"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/posts\/12683\/revisions\/12771"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/media\/12686"}],"wp:attachment":[{"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/media?parent=12683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/categories?post=12683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portlandmonthly.com\/portmag\/wp-json\/wp\/v2\/tags?post=12683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}