Maine Residential Market Overview
I am sure we are all tired of the overused phrase "soft landing," but I am going to say that is what we have seen here in the Maine real estate market. After a sluggish start in the first quarter, the Maine residential real estate market experienced a welcome upturn during the Spring months of Q2. While unit sales remained somewhat suppressed compared to the previous two years of covid crazy, prices remain very strong, showing growth in nearly all Maine markets. Well-priced homes attracted swift buyer interest, often leading to multiple bids. In general, however, the housing market continues to be challenged by a severe lack of inventory and a declining number of new listings available for sale.
Looking nationally, a recently published Redfin report revealed that just 14 of every 1,000 U.S. homes changed hands in the first half of 2023, compared to 19 per 1,000 during the same period in 2019; the housing market is experiencing a substantial decline in turnover rates. Such a decrease highlights the challenges that prospective buyers and sellers currently face.
Prospective homebuyers now face 28% fewer housing options compared to pre-pandemic levels. For reference, a typical modern housing market has a 20/1,000 turnover rate, while at the peak of the Covid market we saw rates closer to 40 or 50 per 1,000 homes.
The median price for single-family homes in Maine experienced a solid increase of 6.8%, reaching $375,000. However, the number of homes sold dropped by 29.1%. We haven’t seen these few homes sell during a spring in Maine since 2014. With so few homes available for sale, the ones that came to market continued to fly off the market, with an average selling time of just 7 days (compared to 6 days in the same period last year). Single family homes selling slightly above the list price was the norm in Q2.
Condos demonstrated a significant median price surge of 10.7%, amounting to $415,000. Even more pronounced than the decline of single family homes, condos saw a drop of 21.6% in the number of condos sold, and the average time required to sell a condo increased by 11 days. Sellers received over their asking price, but less than they did in 2022.
Seasonal Pick Up
Prices and the number of sales both had a nice increase over the slog that was Q1. We rounded out Q2 with the highest home prices ever in the state of Maine’s history, even though the amount trading was back at 2014 numbers.
Homebuyers are gearing up for a hot summer housing market as demand starts to surge. At the beginning of 2023, nobody thought it possible that we’d be in the position we’re in today.
Multi-family buyers are remaining on the sidelines due to the impact of higher interest rates and leveling off rents, leading to a decline in sales activity in this segment.
Maine Residential Market Forecast: Q3 and Q4 2023
Intense Summer: As we enter the summer months, the Maine residential market is expected to remain robust. The market will likely experience high activity, characterized by a brisk pace, multiple offers on properties, and buyers willing to waive contingencies to secure their desired homes.
Seasonal Shift: However, as the year progresses into Q4, a shift towards a more suppressed market is anticipated. Traditionally, the demand tends to soften during the colder months, leading to a slower pace of sales and reduced buyer activity.
Continued Escalating Prices in Hot Markets: Despite the seasonal shift, hot markets within Maine are expected to see continued price escalation. Cream puffs and properties in high-demand locations will likely experience notable price pushes due to strong buyer competition.
Price Sensitivity: Price sensitivity is likely to become more prevalent in the market. Overpriced properties will face longer listing periods and require multiple price reductions to align with market expectations.
More Cancellations, Expired Listings, and Price Reductions: As the market becomes more price-sensitive, there may be an increase in cancellations, expired listings, and price reductions.
Steady Stream of Out-of-State Buyers: Maine is likely to continue attracting a steady stream of out-of-state buyers, accounting for approximately 30% of the market. These buyers, seeking a change in lifestyle and favorable Maine quality of life will contribute to the overall demand.
But what about Portside? We're happy to report that we did exceptionally well, maintaining our ranking as the #3 brokerage in Maine for sales volume, and even growing when others didn't. We have dedicated full-time career agents who work tirelessly to provide the best service to our clients, a strong in-house database of listings, and a culture of collaboration that sets us apart.
What to expect in Q3 + Q4
As the Maine residential market progresses into Q3 and Q4 2023, the summer is expected to bring an intense and competitive market with multiple offers and waived contingencies. However, as the seasons shift towards Q4, a more suppressed market is anticipated. Hot markets will likely continue experiencing price escalation, but overall price sensitivity may increase. Sellers may face more cancellations, expired listings, and price reductions.
The Maine residential market in Q3 and Q4 2023 could see some interesting contradictions in the market. Updated and show ready homes in hot locations will likely experience notable price pushes due to strong buyer competition. Simultaneously, overpriced properties may face longer listing periods and require multiple price reductions to align with market expectations.
So, there you have it - the latest scoop on the Maine real estate market!
If are curious about your home's current value or are in need of any real estate services, we're here to help! Don't hesitate to reach out, and be sure to sign up for our newsletter or follow us on social media for more updates on the Maine real estate market.
Founder + CEO