Has COVID made a permanent shift to Maine’s real estate market?
By Dava Davin, Founder + CEO, Portside Real Estate Group
Maine’s residential real estate market (condos + single family homes) was a $8.7 billion market in 2021, a 22% increase over 2020. Units traded remained mostly the same, but the price increases were staggering. Will these prices stay at this level, will they continue to increase at this rate? If we look back at Maine’s history we see that the median home price was $100,000 in 1998, it took 19 years, until 2017, to hit $200,000. And then just five years later in 2021 the median price topped out at $299,000. So what once took 19 years to accomplish (home prices to rise $100,000), most recently took just five years! In the last 10 years home prices rose 76%, the previous decade there was still a solid increase but at 22% it paled in comparison to what we have seen in recent years. Real estate prices will always go up over time, however the most recent rate of acceleration will moderate.
Seasonality + Market Expansion
Before the pandemic we always saw a very seasonal Maine market peaking with the most units selling in August and the lowest amount of units selling in February. During the last two years we saw a longer selling season and the most units selling in October resulting in a two month extension of the peak selling season from June until October.
The median home price in Southern Maine (Cumberland + York County) in 2021 was $419,000 and in the other 14 counties it was only $235, 000. 35% of the units sold in Maine were in Cumberland + York County and that translated to 49% of the volume, basically half of the $8.7 billion is being transacted in Southern Maine
What we see across the board in Maine is over asking selling prices and very low days on market. This shows a strong market throughout the state and opportunities in areas outside of Southern Maine.
Sky High Prices
I mentioned above that the medium single family home price in Southern Maine is $419,000. What is a buyer getting for that median price? They are purchasing a 3 bedroom home with 1.5 baths, depending on the location, they will get more or less land and potentially a garage!
In the last year home prices rose 20% and the year before they rose at almost 14% statewide. As Southern Maine prices get out of reach for Mainers, folks will move to more rural areas which will help build communities and businesses, this could turn out to be a great side effect of the pandemic for Maine!
More Realtors
This hot market has driven more agents as well! There are A LOT more realtors!
The National Association of Realtors reported a record number of agents in 2021. 180,000 new agents entered the industry with virtually no increase in listings nationwide.
We have more real estate agents in Maine as well, but it has not affected our veteran agents’ careers. They are selling more than ever even with the enhanced competition. Since pre pandemic days, Maine has 14% more agents in the mix but 58% more agents are selling $4 million or more a year, 120% more agents selling $10 million or more and almost triple the amount of agents selling $20 million or more annually.
The market is tricky as each property is bound to have several bids, the seasoned and well trained agents are able to navigate that to ensure both buyers and sellers are being represented in the best way possible.
Looking Forward
2021 has been a wild ride for the real estate industry and these trends will no doubt carry over into 2022. As we continue into this broader, more expensive market, I am inspired by the hard work and dedication of Maine’s realtors, the Mainers that are committed to Maine and the fresh faces that are choosing Maine!
