Housing bubble on MDI shows no signs of bursting

BAR HARBOR – Are you looking for a house on Mount Desert Island? Do you have an extra $7.5 million kicking around?

If so, you could be the next owner of the Atlantique, an oceanside mansion that boasts 16 bedrooms and a spot on the National Register of Historic Places.

It’s no fixer-upper – but it does have more than its share of location, location, location.

“There’s a lot of houses in the area that are pretty big,” real estate agent John Golden conceded. “But this, I think, is one of the finest houses in Maine.”

But the stately Tudor home – now listed through Sotheby’s division of international realty – has been on its quest for a moneyed buyer for several years, and the narrow streets of the resort community seem to be sprouting a crop of “For Sale” signs alongside the crocuses.

However, local Realtors say that MDI has proved resistant to the recent slowdown in the New England housing market.

“It’s actually strong and consistent,” Janet Moore of the Swan Agency said Saturday. “The market’s healthy. I think this area’s isolated regarding the economy … The demand continues to be greater than the supply.”

Cathy Minehan, the head of the Federal Reserve Bank of Boston, said last week that the New England market’s housing slump has been more pronounced than the nation’s as a whole.

“Massachusetts and New England will experience some sustained cooling in real estate markets, and some flattening of prices,” she said.

Despite that bad news for sellers, economists don’t predict a repeat of the early 1990s recession and sharp downturn in the housing market, according to Minehan.

But there’s no sign of any “sustained cooling” in the Mount Desert Island market, according to Moore. On the island, it’s been a repeat of the California gold rush – even for properties as humble as a two-bedroom mobile home.

Moore checked the property listings and found that on the whole island, there are just five properties listed between $149,000 and $169,000, and those are the least expensive there are.

“Two are single-wides,” Moore said of the lower-priced listings. “The best deal right now is actually a trailer on Norway Drive. It’s $169,000, but it’s on a 1-acre lot.”

The tight market means that there’s no relief in sight for young families or members of the working class who would like to settle on the island but can’t afford to buy property there.

“Today, an affordable home on the island, for a family, is $300,000, $350,000,” Moore said. “It’s really sad, but it’s true … many of the local people can’t begin to afford the houses.”

The Realtor said that she generally works with “cash buyers,” well-to-do folks who don’t need to finance their housing purchases.

“Today I’m working on one, it’s close to $4 million and they have the cash,” she said.

Those buyers are from out of state, she said, as are most of the folks who have looked at Atlantique.

According to Golden, a few dot-com millionaires and one “oil person” have trekked to Bar Harbor to investigate the home’s features including a Beatrix Farrand-designed garden gate and extensive landscaping.

“They’re well-to-do people who look at these houses,” he said. “But the price of Maine real estate, coastal real estate, is still much below what it would be elsewhere. A house like this would be worth $100 million in the Hamptons, or in Nantucket, or Martha’s Vineyard … So we’re still a bargain.”

Moore disagreed with that notion, saying that there is such a strong seller’s market on the island that fair-priced properties get snapped up fast.

“Anything that doesn’t sell on the island, it’s just because it’s overpriced,” she said. “If the price is right, it’ll sell faster and for more than if you overprice it. And so many people overprice.”

But bargain shoppers shouldn’t hold their breath waiting for Atlantique owners Cathy and Bob Barrett to slash the home’s $7.5 million price tag.

According to a house biography on the Sotheby’s Web site, Cathy Barrett is a former model and fashion editor of Town & Country Magazine and a member of the Croquet Hall of Fame. Bob Barrett is a retired investment banker on Wall Street.

The well-heeled couple has been busy remodeling their home in the last few years, Golden said, even bumping the price up a million dollars recently.

“They’re always improving it,” he said. “It’s a terrific house … I think that good houses always sell.”