Dear Friends,

According to the most recent Maine Association of Realtors press release the number of homes sold in Maine declined more than 20% in June when compared to June 2010. Although this is an alarming and precipitous drop in home sale activity, it belies the fact that June 2011 was the strongest month of sales reported since the June 2010 spike. With nearly 1,000 single family homes sold, Unit Volume improved 25% versus May 2011 and more than doubled since the weak February sales report.

Interesting to note, June 2010 was the strongest sales month in the past 2-years due to the "First Time Homebuyers" tax credit program expiring. We are pleased to report that we should see the Maine real estate statistics start to settle into a more normal pattern as the government incentive programs fall farther into the past.

While we continue to battle global tumult on a daily basis, it is easy to forget that the Dow Jones average at 12,500 reflects a nearly 20% return in the past year. We should also remind you that 10-year US Treasury note yields at 3.0%, Conforming 30-mortgages at 4.65% and Jumbo loans at 5.15%, are representative of an extraordinary real estate financing opportunity. A Jumbo Mortgage at 5.15% is 2.5% lower than it was 3-years ago and within .05% of the lowest rates in the past 52 weeks.

Crude oil hovering around $100 a barrel is not ideal for gas prices or for tourism. Travelling the highways this summer, it is clear that many travelers from all over the country have chosen to drive to Maine for their vacation. Gold prices at $1,600 an ounce remind us that there are some serious issues facing the world in terms of possible European credit defaults and US debt ceiling debates. Foreign exchange rates for the major participants in Maine real estate appear to be strong and strengthening. The UK Pound, Canadian Dollar, Swiss Franc and the Euro make up the vast majority of international clientelle . The US Dollar weakness provides more incentive for foreign buyers to invest in Maine. We have clearly seen an expanding foreign component for our luxury summer vacation rental business which should feed into our prospective home buyer base in pursuant months

In the luxury property segment, there have been some interesting activity and improving market dynamics. There were 42 homes sold over $1 million in Maine this year of which 32 homes are in the six counties serviced by Legacy Properties Sotheby's International Realty. We are pleased to report the we were involved in 8 of the luxury homes sales in our markets. In addition we represented both the buyer and the seller for nearly half of those sales. Three of our $1 million plus sales fell into a rare category in that they were not ocean front homes. This is truly a positive sign demonstrating a recovery in buyer confidence.

Lastly, we continue to be encouraged by the "Under Contract" unit volume which has been steadily growing from a recent low in December 2010. Improving 36% from this time last year, "Under Contract" properties will lead our sales out of the sea of negative headlines for Maine real estate. I, for one, am looking forward it. Stay tuned.