The Maine housing market is experiencing a dynamic shift, a confluence of factors shaping its present and future. From the prices that define the market to the emerging trends steering the course, understanding the Maine housing market is vital for prospective buyers and sellers alike. As we step into the last quarter of 2023, we explore the price dynamics, analyze ongoing trends, and peering into the crystal ball to forecast what lies ahead in the real estate landscape of Maine.
Maine Housing Market Trends
The Maine housing market experienced significant shifts in September 2023, marked by a notable increase in home values and a simultaneous decrease in sales volume. Delving into data and trends, sourced from the Maine Association of REALTORS®, offers insights into the dynamic landscape of the housing market in Maine.
Sales Performance
Realtors across the state reported a total of 1,410 homes sold in September, reflecting a 25.4 percent decrease compared to the same period in 2022.
Median Sales Price
The statewide median sales price (MSP) surged by 14.17 percent, reaching $376,750. This statistic indicates that half of the homes were sold for more, highlighting the robustness of the real estate market in terms of property values.
Inventory Challenges
The availability of single-family existing homes in Maine remains tighter-than-normal, with only a marginal increase in inventory. In September 2023, Maine had 3,855 homes for sale statewide—a two percent increase from August 2023 and a slight uptick from the previous year. However, this number is still 57 percent below the pre-pandemic levels of September 2019.
Carmen McPhail, the 2023 President of the Maine Association of REALTORS® and Associate Broker at United Country Lifestyle Properties of Maine, emphasizes the need for additional housing units. Advocacy efforts at both the Maine State House and local Town Halls are underway to address the housing supply shortage, aiming to create a more balanced market.
National Context
Comparatively, the National Association of Realtors reported a 15.8 percent decrease in sales across the country in the past year, accompanied by a 2.5 percent increase in prices. The national MSP reached $399,200. In the Northeast region, which includes Maine, sales eased by 16.7 percent, while the regional MSP rose by 5.2 percent to $439,900.
Buyer Strategies in a Competitive Market
As the number of buyers continues to outpace the number of sellers, McPhail advises potential buyers to consult early with a knowledgeable REALTOR® for the best strategy. Patience, persistence, and the ability to act quickly when opportunities arise are key in navigating the current market dynamics in Maine.
County-wise Analysis: Maine Housing Market
The county-wise analysis provides a detailed examination of the Maine housing market trends during the rolling quarter from July 1, 2022, to September 30, 2023. This comprehensive breakdown includes the number of units sold and the median sales price for each county, allowing for a nuanced understanding of the real estate landscape.
County-specific Insights
1. Androscoggin: The county saw a 22.95% reduction in the number of units sold, coupled with a notable 12.28% increase in MSP, reaching $320,000.
2. Aroostook: Experiencing a 19.69% decrease in units sold, Aroostook county demonstrated a 9.97% increase in MSP, settling at $159,450.
3. Cumberland: With a 23.08% decline in sales, Cumberland county observed a 10% rise in MSP, reaching $550,000.
4. Franklin: The county faced a significant 30.77% drop in units sold, accompanied by a modest 5.81% increase in MSP, reaching $255,000.
5. Hancock: Experiencing a 17.23% decrease in units sold, Hancock county saw a substantial 15.10% increase in MSP, reaching $425,000.
6. Kennebec: The county recorded a 20.36% reduction in units sold and a 6.60% increase in MSP, settling at $307,000.
7. Knox: Knox county showed a 6.83% decrease in units sold, coupled with an 11.04% increase in MSP, reaching $452,500.
8. Lincoln: Experiencing a 15.57% decline in units sold, Lincoln county demonstrated a 10.43% increase in MSP, settling at $450,000.
9. Oxford: The county faced a 19.42% decrease in units sold, coupled with a substantial 14.55% increase in MSP, reaching $315,000.
10. Penobscot: With a 23.04% reduction in units sold, Penobscot county observed a 10.85% increase in MSP, settling at $262,500.
11. Piscataquis: The county maintained the same number of units sold, and the MSP increased by 2.24%, reaching $207,500.
12. Sagadahoc: Experiencing a 7.19% decrease in units sold, Sagadahoc county demonstrated an 11.11% increase in MSP, reaching $400,000.
13. Somerset: The county faced a significant 30.52% drop in units sold, accompanied by a 4.75% increase in MSP, settling at $209,500.
14. Waldo: Experiencing a 26.38% reduction in units sold, Waldo county saw a substantial 16.50% increase in MSP, reaching $349,500.
15. Washington: The county faced a 24.03% decrease in units sold, and the MSP remained unchanged at $220,000.
16. York: With a 26.02% decline in sales, York county observed a 5.43% rise in MSP, reaching $485,000.
Are Home Prices Dropping in Maine?
Despite an anticipated slowdown in price growth, the Maine housing market maintains its strength in 2023. As of the current trends, there is no indication of a drop in home prices in Maine. The housing market is expected to maintain its strength throughout 2023, with demand remaining notably high due to various factors such as a strong economy and a desirable lifestyle in the state.
- Maine's Strong Economy: Maine boasts an unemployment rate below the national average, coupled with a growing economy. These factors attract new residents, consequently driving up the demand for housing.
- Maine's Desirable Lifestyle: Renowned for its stunning landscapes, superior quality of life, and cost-effectiveness, Maine stands as an attractive location for individuals across various age groups and life stages.
- Limited Housing Supply: The housing supply in Maine is constrained, exerting upward pressure on prices due to the demand surpassing the available options.
However, the Maine housing market does face certain challenges that warrant attention:
- Rising Mortgage Rates: In recent months, mortgage rates have been on the rise, rendering home purchases more costly. This increase might dampen the demand for housing in Maine, particularly among first-time homebuyers.
- Lack of Affordable Housing: Maine grapples with a shortage of affordable housing, posing a significant hurdle for low- and middle-income residents in their search for suitable accommodation.
Maine Housing Market Forecast 2023-2024
Key Metrics
1. Average Maine Home Value: Zillow reports that the average home value in Maine is $386,588, reflecting a significant 7.4% increase over the past year. This data underscores the appreciation of property values, highlighting a positive trend in the state's real estate market.
2. Days on Market: Homes in Maine are going to pending status in approximately 11 days, indicating a swift and competitive market. This quick turnaround time suggests a high demand for properties, potentially driven by a combination of factors such as limited inventory and strong buyer interest.
Inventory and New Listings
3. For Sale Inventory (October 31, 2023): Zillow reports a total of 5,039 homes available for sale as of October 31, 2023. This figure provides an overview of the current housing supply in the market.
4. New Listings (October 31, 2023): There were 1,857 new listings in October 2023, contributing to the overall inventory. The influx of new listings is a crucial factor in meeting the demand and maintaining a balanced market.
Sale Price Metrics
5. Median Sale to List Ratio (September 30, 2023): The median sale to list ratio, standing at 1.001, suggests that, on average, homes in Maine are selling very close to their list prices. This ratio provides insights into the negotiation dynamics between sellers and buyers in the market.
6. Median Sale Price (September 30, 2023): The median sale price in Maine is reported to be $365,000 as of September 30, 2023. This figure represents the middle point of all sale prices, showcasing the central tendency of the market.
7. Median List Price (October 31, 2023): Zillow indicates a median list price of $401,612 as of October 31, 2023. This figure provides an insight into the pricing expectations of sellers in the current market.
Sales Performance
8. Percent of Sales Over and Under List Price (September 30, 2023): Zillow reports that 47.4% of sales in September 2023 were over the list price, while 37.7% were under the list price. These percentages reveal the competitive nature of the market, with a significant portion of sales surpassing the initial listing prices.
Housing Market Forecasts for Maine Metropolitan Statistical Areas (MSAs)
Zillow also provides detailed forecasts for specific Metropolitan Statistical Areas (MSAs) in Maine. The data, covering key regions including Portland, Bangor, Augusta, and Lewiston, offers valuable insights into the expected trajectory of these housing markets over the coming months.
Portland, ME MSA
Portland, a vibrant city in Maine, is a focal point for real estate activity. Zillow's forecasts for the Portland, ME MSA are as follows:
- Base Date: October 31, 2023
- November 30, 2023: 0.5% increase
- January 31, 2024: 0.6% increase
- October 31, 2024: 1.8% increase
These figures indicate a positive growth trend in home values, with an expected acceleration over the forecast period.
Bangor, ME MSA
Bangor, a significant city in Maine, also sees projections for its housing market by Zillow:
- Base Date: October 31, 2023
- November 30, 2023: 0.2% increase
- January 31, 2024: 0.3% increase
- October 31, 2024: 1.5% increase
While the growth percentages are slightly lower compared to Portland, Bangor is anticipated to experience a steady rise in home values according to Zillow's forecasts.
Augusta, ME MSA
Augusta, the state capital, is a key area of interest for real estate. Zillow's projections for the Augusta, ME MSA are as follows:
- Base Date: October 31, 2023
- November 30, 2023: 0.7% increase
- January 31, 2024: 1.2% increase
- October 31, 2024: 4.1% increase
Augusta is expected to undergo substantial growth in home values, showcasing a positive outlook for the real estate market in the capital region.
Lewiston, ME MSA
Lewiston, a thriving city in Maine, has its own set of forecasts by Zillow:
- Base Date: October 31, 2023
- November 30, 2023: 0.5% increase
- January 31, 2024: 1% increase
- October 31, 2024: 3.4% increase
Similar to Augusta, Lewiston is projected to experience notable growth in home values, making it a region of interest for both buyers and sellers.
These forecasts provide valuable insights into the expected trajectory of Maine's housing market across different regions. It's important to note that these projections are subject to change as the market responds to various economic and environmental factors.
References:
- https://www.zillow.com/home-values/28/me/
- https://www.mainerealtors.com/
