OLD ORCHARD BEACH — On the inside, April Massey’s condominium in The Village at Cider Hill is much larger than it appears, thanks to a full daylight basement. The unit is for sale, and the hardwood floors, gas fireplace and private deck helped put the two-bedroom home under contract within a week.
But this is an exception in York County’s condominium market. Based on last year’s activity, figures show that it would take two years to sell all the condos that are for sale or under contract in this beachfront resort town. Listed at $269,000, Massey’s home also is at a price point with bloated inventory and weak sales.
Additional Photos
The health of southern Maine’s single-family home market is a closely watched indicator of the economy. But the widely publicized, monthly status reports from the Maine Association of Realtors don’t include condominiums, and they can be even harder to sell these days.
Unlike typical homes, condominiums are burdened with maintenance fees, special assessments and, recently, tougher lending regulations. Higher-end condo purchases often rely on cash, or people selling larger homes.
To make matters worse, uncertainty about pending changes in federal flood plain maps and government insurance is complicating efforts to get financing along the coast.
These factors are making sales more challenging in places such as Old Orchard Beach, which has 2,068 condo units in a town with fewer than 9,000 residents.
Massey, a real estate agent at Coldwell Banker Residential Brokerage who’s moving out of state, helped sell the initial condos when Cider Hill was developed, in 2004. She remembers people waiting in line to purchase the new homes.
“People had disposable income then,” she said, “but now they’ve disposed of it.”
EVEN GOOD DEALS SIT IDLE
Recent figures from the Maine Real Estate Information System show 148 condominiums for sale or under contract in town. The biggest glut is in the $250,000 to $300,000 price range, where 32 are on the market and only five sold last year.
As in all real estate, prices draw a finer distinction, and the market in Old Orchard Beach is highly segmented. There’s little relation between beachfront high-rises, like the recently built Grand Victorian resort condos, and lower-income projects on Smithwheel Road and Cider Hill, an adult community with 176 units in a rural setting.
One thing they have in common, according to Marianne Mosesso, a Coldwell Banker agent listing Massey’s home, is that there are too many for sale, at prices that are too high. Some sellers still can’t accept that values have fallen over the past few years, she said. They’re asking prices that, even if they attract buyers, will be hard to close because lenders will balk when appraisals come in too low.
“If people don’t absolutely have to sell, they should be off the market,” Mosesso said. “They’re flooding the market.”
The low end of the condo market was moving earlier this year before the federal first-time home buyer credit expired, agents say, but now it has stalled.
A one-bedroom condo in Smithwheel Court is listed at $71,900. Across from a mobile home park, it’s a bank-owned short sale, meaning it’s listed for less than the owner owes on the mortgage. Another bank-owned property, a two-bedroom townhouse with all appliances, is sitting at $114,000.
“There are still good deals, but they’re staying on the market,” said Paul Weinstein, an associate broker at King Real Estate.
Some owners are selling, Weinstein said, because they’re having trouble paying maintenance fees, which range from $100 to more than $450 a month. Low condo fees feel good, but if they don’t cover the cost of replacing roofs or other big-ticket repairs, associations often need special assessments that can run into the thousands. That forces some owners to sell, Weinstein said.
At the higher end of the market, tighter regulations that increase the ratio of owner-occupied units needed to gain financing are hurting properties that attract investors and second-home owners. Many of the Canadians who vacation here are buying in Florida, agents say, where the housing bust has created historic bargains.
On the beach here, desirable high-rise units listed in the $500,000 range are awaiting buyers. Only seven oceanfront condos have sold in the past 12 months.
“It’s a second-home market,” said Nancy Z. Moreshead, a broker who specializes in oceanfront property at The Real Estate Store/Applebee Commercial. “People don’t treat themselves to an oceanfront home when they’re worried about the economy.”
Moreshead has more than 20 listings, which she said is above normal. But it’s all relative, she said, recalling the huge inventory of oceanfront units after the deep recession of the early 1990s.
“I’ve seen much worse,” she said. “I remember when these buildings were going to auction.”
The current market also has dampened enthusiasm for the Grand Victorian, the beachfront, hotel-style complex located next to the pier. The project opened to great fanfare in 2006 and was considered a sign of rebirth in the downtown.
But 10 of the 51 luxury units remain unsold, and some investors have been forced to sell short. Investors paid $550,000 or so for a unit when the project opened, said Mary Desjardin, who runs the local office of Weichert Realtors-Waterglen Group. Today, a three-bedroom, multi-level is on the market for $395,000.
FEMA ADDS COMPLICATIONS
Desjardin, who handled most of the original sales and owns a unit in the building, said some potential deals are falling apart as the town waits to clarify revised flood plain maps from the Federal Emergency Management Agency.
The proposed maps put many waterfront properties in a stricter flood zone. The town is disputing FEMA’s calculations, and the agency has offered to withdraw some of the maps. But the uncertainty has led some lenders to hold off making loans until the matter is settled, Desjardin said.
The Grand Victorian has an indoor pool and fitness center, and the association fee is a steep $457 a month. But for investors who can swing it, the complex offers a good cash flow, with units renting in mid-summer for $3,000 a week.
“We had a great summer,” said Christa Kelley of The Maine Real Estate Network, who manages 15 units as rentals. “In the long run, it will be a good investment for people who can hold on.”
Back at Cider Hill, the dozen homes on the market are probably the most since the project was built, Mosesso said. And even though Massey’s unit is under contract, the sale is not a slam dunk — the hopeful buyer needs to sell an existing home first.
“Condos,” Mosesso said, “are the last thing to be purchased and the first thing to fall.”
Staff Writer Tux Turkel can be contacted at 791-6462 or at:
tturkel@pressherald.com
Copy the Story Link
Send questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.