Bangor region singled out after escaping worst of housing hangover

A home for sale sits on the corner of Graham Avenue and Boutelle Road in Bangor in June, 2011. A new economic index put out by the National Association of Home Builders lists the Bangor metro region among 12 areas nationwide showing sustained improvement in new housing permits, employment and housing prices.
A home for sale sits on the corner of Graham Avenue and Boutelle Road in Bangor in June, 2011. A new economic index put out by the National Association of Home Builders lists the Bangor metro region among 12 areas nationwide showing sustained improvement in new housing permits, employment and housing prices.
Posted Sept. 20, 2011, at 5:32 p.m.
Last modified Sept. 22, 2011, at 5:39 a.m.

BANGOR, Maine — A new economic index put out by the National Association of Home Builders lists the Bangor metro region among 12 areas nationwide showing sustained improvement in new housing permits, employment and housing prices.

The Improving Markets Index measures growth in those three areas since their respective troughs, or low points, during the latest economic downturn. In the case of the Bangor metro region, the number of building permits has grown by 2.1 percent since its Sept. 30, 2010, trough. Housing prices have increased by 2.8 percent since the May 31, 2010, trough. And employment has grown by 2.6 percent since the Sept. 30, 2010, trough.

The group used employment data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau.

The test is whether metro areas have seen six months of consistent improvement since a relative trough, said Robert Denk, senior economist at the National Association of Home Builders.

“If you do that in all three of the categories, than you get into the index,” said Denk. “That’s where Bangor is.”

Last year at this time, according to the group, no markets in the country showed improvement under the criteria.

Denk said his group decided to start measuring these factors and releasing the information as a comparative index to illustrate that while national housing numbers may be dismal, there are local markets that are improving.

“Speculation and psychology have been a big part of the housing boom-and-bust cycle that we’ve seen, and it’s based more on a national frenzy, rather than the fundamental conditions in the housing markets,” said Denk.

The group will release the index monthly as new data comes out.

The national numbers are heavily influenced by very poor housing market conditions in large states such as California, Florida and Michigan, said Denk.

“The drumbeat of bad news is basically focused on national numbers, or horror stories that come out of particularly hard-hit markets — for example, Las Vegas or anywhere in southern Florida,” said Denk. “Kansas, Iowa, Bangor are not in lockstep with what’s going on [there].”

Denk said he has likened the housing boom and subsequent bust to the “party and the hangover.”

“The more restrained you were at the party, the less your level of distress the day after,” he added.

That, he said, is the situation many areas around the country — including Bangor — now find themselves in.

“One of the things in Bangor’s favor is they were nothing like the extreme. Bangor, Maine, was very moderate in the boom-and-bust cycle, and those markets are coming back the earliest and the strongest,” said Denk.

Gary Jordan, manager of engineering at Northeastern Log Homes in Kenduskeag, said he definitely has seen an increase in walk-in customers and phone calls over the past year from Bangor-area customers. People have been using Northeastern’s services to put additions on traditional, stick-built homes, he said.

And while some customers are ordering new homes for this year, many are making concrete plans for next year, he said.

“You see people more confident in the area businesses for area employment. You just heard about the paper mill starting back up, the new civic center being built — that does boost your confidence, and that’s a great thing,” said Jordan.

And growth in the home building market ripples through the local economy, said Jordan.

“People build houses, they need refrigerators, carpeting, electrical work, plumbing,” said Jordan.

Angelia Levesque, president of the Bangor Board of Realtors, said she has seen a lot of buyers out in the market taking advantage of the still-low interest rates. There are housing starts in the area as well, said Levesque, who was meeting Tuesday with someone involved in a new condo development.

Levesque said she also thinks the banks seem to be getting “a little more of a handle on how they handle foreclosures.”

“What’s in foreclosure is now moving — it’s not sitting in the inventory,” said Levesque.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in Business