Maine’s Property Market is Booming

For most, Maine is a location that you whole-heatedly choose to live in. With its beautiful coastline, fresh mountain air, stunning landscapes, lakes and kind people, it provides its residents with a truly magical quality of life. So, it’s no wonder that, despite the pandemic, Maine’s property market has continued to flourish as it welcomes buyers looking for a change.

City dwellers and those with work-from-home options have been fleeing from their pokey apartments to the suburbs and beyond. With the quality of lifestyle it offers, added to its relatively low incidence of COVID-19 compared with nation-wide statistics, Maine has been drawing buyers in from far and wide. 

Thanks in part to increased interest from out-of-state buyers, Maine’s residential real estate market soared through 2020 amidst the chaos and uncertainty of COVID-19 and is showing no signs of slowing down.

According to a report released by Maine Listings, a subsidiary of the Maine Association of Realtors, in the first nine months of 2020, single family home sales were running 2.6 percent ahead of the record pace set the year before.

In September 2020, the median price of Maine homes was sitting at $273,500 – a staggering 19.5 percent higher from the previous year. Additionally, sales volumes saw an increase of 22.8 percent from the previous September, going up by 425 homes in September 2020 alone. 

According to Tom Cole, president of the Maine Association of Realtors, demand has been driven by the combination of Maine’s lifestyle appeal, the country’s COVID-19 response, and the historically low interest rate of mortgages and listings in the area.

Cole says, ‘’with more buyers than sellers in most markets, we are seeing strong competition, faster sales and increasing pricing.’’ 

And it certainly seems to ring true that Americans are looking for a lifestyle change in the wake of a pandemic that has caused so many to rethink their priorities. Out-of-town buyers have typically accounted for approximately one in four property purchases in Maine, but that ratio has risen to almost a third of late. Out-of-towners purchased 445 homes in September 2019, with this figure rising to 735 in September 2020. 

According to a recent study published by Redfin, Portland, Maine, has been named one of the most competitive areas to purchase a home – the only New England city included in the top ten list.

Portland and surrounding areas offer an appealing mix of big city culture and New England charm. Homes in Portland are receiving an average of 5 offers and are selling within 9 days. Last month, Portland’s average home sale price was $408K, up 21.8 percent from the year before.

Maine’s largest town of Brunswick is also performing very competitively. Average home sale prices reached $318K last month, up over 7 percent year-on-year.

Despite Maine’s overall property market stability thus far, the forecast for 2021 nation-wide is full of wildcards. The U.S.’s ability to manage the spread of COVID-19 whilst successfully distributing the vaccine will prove the most impactful. Further quarantines and lockdowns would inevitably put a dent in sales and housing inventory, slowing the market and increasing the pressure for buyers. 

Equally, a double-dip recession is still a possibility as we head into 2021. Less consumer spending could more broadly impact economic growth and see housing market ‘would-be’ buyers disappear, lowering demand and consequently driving down property prices. 

As for 2021, industry experts seem to be in firm agreement that prices will continue to rise. Fortunately, however, their rise is likely to slow. The Mortgage Bankers Association (MBA) predict that 2021 home price growth will fall in the range of 2 percent, with CoreLogic expecting a far more conservative growth of just 0.2 percent. Largely, these predictions are the result of delayed listings flooding the market and driving down the imbalance of supply and demand that buyers have endured through the pandemic thus far.

Maine is not immune to the country-wide volatility that could still lay ahead. However, thus far, it has certainly demonstrated itself to be a significantly resilient market, and an attractive option for out-of-state buyers able to facilitate the lifestyle change that the pandemic has caused them to seek.