It took Eden Martin a year of navigating an increasingly competitive housing market to find a home.
Her list of requirements was short. She and her partner, Jack Lindamood, were tired of commuting from their apartment in Westbrook to Brunswick, where they both work, so they wanted something in the Midcoast.
Ideally, it would have at least 2 acres of land, but even that was negotiable. It just had to be within their $227,000 budget.
The pair saw roughly 30 houses before falling in love with the little three-bedroom Wiscasset house with the blue door and the brook in the backyard.
Martin and Lindamood threw “every cent” they had at the house, offering a short 15-day closing window and more than $15,000 over the asking price. Theirs was one of seven offers and while it wasn’t the highest bid, the seller wanted the house to go to a Maine couple looking to stay in the state.
Martin and Lindamood’s home search – one that lasted months with dozens of showings, high competition, several bids and a stretched budget – would have been unheard of a few years ago, but has now become the norm.
Experts say the trend will likely continue as a statewide inventory squeeze, high buyer demand and rising interest rates keep the pressure on an already hot housing market.
Just over 1,300 Maine homes changed hands in July, a decline of more than 20% from the total in July 2022, according to data from the Maine Association of Realtors.
However, the statewide median sales price for homes sold last month was $380,000, a 7.3% increase over the price in July 2022, and a slight decline from the $385,000 median in June 2023. The median is the price at which half the homes sold for more money and half sold for less.
HOMES WON’T LINGER
Before the coronavirus threw the housing market into pandemonium, Derek Goff used to tell prospective homebuyers to put on their best poker face before a showing. Don’t let the sellers know how much you love the house.
Now, Goff, co-founder of Portland-based Tomazin Goff Realty, gives the opposite advice: Be overtly friendly, tell them how amazing the house is and the life you can see there.
That advice isn’t likely to change for a while.
“I don’t see prices going anywhere because the supply and demand issue is still plaguing the market right now,” Goff said.
First-time home buyers are having a hard time breaking into the market, especially in Greater Portland. Goff said he’s guiding those buyers toward towns farther afield, where the prices are lower and the demand may be slightly less. He’s driving to showings and open houses all over the state, something he hasn’t done since he first started in the business.
Some real estate agents are reporting more price decreases, but Goff said that’s more often the result of sellers being too ambitious.
Houses that are priced appropriately won’t linger for long.
Maine houses were on the market for an average of just seven days last month, up from six days in June.
Michael Thomas, a Kennebunk-based real estate agent with Keller Williams, said little will change unless more inventory hits the market or interest rates jump so high that the market screeches to a halt.
Experts were predicting a cooling market a few months ago, but Thomas isn’t seeing that yet. Houses may not be receiving 30 offers with $100,000 over asking, but they’re still receiving multiple bids, often in the double digits, and still significantly over the asking price.
“The only reason I think that is is because there are (fewer) buyers than there were because of the interest rates,” he said. “In York County, anything priced under $700,000 is flying off the market. Anything under $400,000 is nonexistent except a little in Sanford or a little in Waterboro,” he said.
Tom Landry, broker/owner of Benchmark Real Estate in Portland, is a little more optimistic. He painted a picture of two markets.
Like Goff, Landry said that appropriately priced homes will sell in a blink, but “if you list over you’re dead in the water.”
One house in Westbrook recently sold for $50,000 over the asking price and had eight offers. On the other hand, one in Gorham went for $75,000 below the asking price.
Landry said he expects to see a more buyer-friendly market in the fall and winter.
“Is it a leveling? Yes. A bit of a correction? Yes. But it’s not a bubble burst,” he said.
PENT-UP DEMAND
Inventory is slowly starting to creep up.
The number of homes for sale in July was 9% higher than in June, and 6% higher than July of last year, according to Carmen McPhail, president of the Maine Association of Realtors.
“There are still plenty of buyers seeking homes across Maine and they are facing a sustained tight supply of for-sale inventory, though we’re seeing some improvement,” said McPhail, who is also an associate broker at United Country Lifestyle Properties of Maine.
“As move-in ready homes become available for sale, they are quickly met with pent-up buyer demand,” she said. McPhail recommended patience and flexibility in the fast-moving market.
Nationally, sales fell 16.3% from July 2022, and prices rose by 1.6% to a median of $412,300, according to the National Association of Realtors. It’s just the fourth time that the average national sales price has exceeded $400,000.
In New England, home sales fell roughly 24% last month from the year before, but prices rose 5.5% to $467,500.
According to mortgage buyer Freddie Mac, the 30-year fixed-rate mortgage averaged 7.09% as of Aug. 17, the highest level in over 20 years.
Properties across the country remained on the market for much longer in July than those in Maine – 20 days, an increase from 18 days in June and 14 days in July 2022.
The Maine Association of Realtors also looks at three-month data in county-by-county comparisons to get a larger sample size of sale transactions, and both the number of sales and the sale price were virtually identical to the July numbers, with a 20.07% sales decrease and a 7.04% price increase.
Sagadahoc County saw the biggest decrease in sales, with just 95 homes selling between May 1 and July 31, an almost 27% decline from the same period a year before. Cumberland County remains the most expensive of Maine’s 16 counties, with an average price of $550,000. Oxford County saw the biggest price increase, up 17.9% from $279,950 in the three-month span last year to $330,000 this year. Piscataquis and Franklin counties saw overall price decreases, while prices in Sagadahoc County were nearly flat.
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